Lesson 6 Lesson 6 Principles of InsurancePrinciples of Insurance

II ．． Teaching Points: Teaching Points:

1. The importance of understanding the basic 1. The importance of understanding the basic principles of insuranceprinciples of insurance

2. Insurable Interest2. Insurable Interest 3. Indemnity3. Indemnity 4. Uberrimae Fidei4. Uberrimae Fidei 5. Subrogation5. Subrogation 6. Contingency Insurance6. Contingency Insurance 7. Proximate Cause7. Proximate Cause 8. Claims Documents8. Claims Documents

II. Teaching Aim: II. Teaching Aim:

1. Understand the importance of understandin1. Understand the importance of understanding the basic principles of insuranceg the basic principles of insurance

2. Grasp the meanings of the basic principles o2. Grasp the meanings of the basic principles of insurance: Insurable Interest, Indemnity, Ubef insurance: Insurable Interest, Indemnity, Uberrimae Fidei, Subrogation, Contingency Insurarrimae Fidei, Subrogation, Contingency Insurance, and Proximate Causence, and Proximate Cause

3. Try to know the documents required in an in3. Try to know the documents required in an insurance claimsurance claim

III. Teaching ProcessIII. Teaching Process 1. Introduction to the Text1. Introduction to the Text Insurance plays an important part in international trade. As goInsurance plays an important part in international trade. As go

ods are being transported from the seller to the buyer, they are eods are being transported from the seller to the buyer, they are exposed to the risk of loss or damage due to the happenings of naxposed to the risk of loss or damage due to the happenings of natural calamities and other events. They should therefore be insurtural calamities and other events. They should therefore be insured so that claims can be made on the insurance company for coed so that claims can be made on the insurance company for compensation when loss or damage does occur. But who should armpensation when loss or damage does occur. But who should arrange and pay for insurance coverage? The seller or the buyer? Trange and pay for insurance coverage? The seller or the buyer? This is defined by trade terms in the trade contract. In this text, thhis is defined by trade terms in the trade contract. In this text, the author deals with some of the basic principles of insurance and e author deals with some of the basic principles of insurance and their implications to cargo insurance. The author discusses them their implications to cargo insurance. The author discusses them one by one following the subtitles of “Insurable Interest”, “Inone by one following the subtitles of “Insurable Interest”, “Indemnity”, “Uberrimae Fidei”, “Subrogation”, “Contingencdemnity”, “Uberrimae Fidei”, “Subrogation”, “Contingency Insurance”, “Proximate Cause”, and “Claims Documents”.y Insurance”, “Proximate Cause”, and “Claims Documents”.

2. Reading for gist2. Reading for gist Read the text with about 15 minutes, and then try to answer thRead the text with about 15 minutes, and then try to answer th

e following questions: e following questions: 11 ．． What is meant by“insurable interest”?How is this principle What is meant by“insurable interest”?How is this principle

applied when working out and claiming against a policy? applied when working out and claiming against a policy? 22 ．． What makes it possible for the buyer to make a claim on the sWhat makes it possible for the buyer to make a claim on the s

eller’Sopen pohcy? eller’Sopen pohcy? 33 ．． How is the amount of indemnity calculated on cargo insuranHow is the amount of indemnity calculated on cargo insuran

ce policies?ce policies? 44 ．． How does the principle of good faith work in the insurance bHow does the principle of good faith work in the insurance b

usiness?usiness? 55 ．． How is it that claims against the carrier turn out to be settled How is it that claims against the carrier turn out to be settled

between the two insurance companies of the exporter and the cabetween the two insurance companies of the exporter and the carrier?rrier?

66 ．． In what case is it necessary for the seller to have contingency In what case is it necessary for the seller to have contingency insurance?insurance?

77 ．． Why is it important to establish the Proximate Cause?Why is it important to establish the Proximate Cause? 88 ．． What documents are required for valid claims?What documents are required for valid claims?

3. Detailed Study of the Text3. Detailed Study of the Text It is important that exporters have a basic understanding of some of tIt is important that exporters have a basic understanding of some of t

he underpinning he underpinning (basic)(basic) principles of insurance generally, and par ticula principles of insurance generally, and par ticularly their practical implications to cargo insurance rly their practical implications to cargo insurance (insurance of goods c(insurance of goods carried by ship or plane or other vehicle)arried by ship or plane or other vehicle)..

Insurable Interest Insurable Interest 可保权益可保权益 (financial or other interest that is insured against an insurable risk)(financial or other interest that is insured against an insurable risk) The principle of insurable interest is a vital one to all forms of insuranThe principle of insurable interest is a vital one to all forms of insuran

ce. In order to take out a policy the policy holder ce. In order to take out a policy the policy holder (the person who takes (the person who takes out a policy by paying an insurance premiumout a policy by paying an insurance premium 保险客户，保险单持有保险客户，保险单持有人人 )) must have an insurable interest in the insured matter. In the case of must have an insurable interest in the insured matter. In the case of cargo insurance this means that they must benefit from the safe arrival cargo insurance this means that they must benefit from the safe arrival of the goods or be prejudiced by of the goods or be prejudiced by (legal: be harmed by)(legal: be harmed by) their loss. Witho their loss. Without such a principle it would be possible for any individual to take out an iut such a principle it would be possible for any individual to take out an insurance policy on any eventuality nsurance policy on any eventuality (on any possible event, in which th(on any possible event, in which they have no interest)ey have no interest) they could think of. they could think of.

It is also necessary to prove insurable interest in order to make a claim against a It is also necessary to prove insurable interest in order to make a claim against a policy policy (( 凭保险单索赔凭保险单索赔 )) and this can pose a problem if the claim is ac tually made b and this can pose a problem if the claim is ac tually made by a non-policy holder. This situation can arise in contracts subject to CIP or CIF coy a non-policy holder. This situation can arise in contracts subject to CIP or CIF conditions nditions (contracts that are made on CIP or CIF terms)(contracts that are made on CIP or CIF terms). These terms mean that . These terms mean that the seller is responsible for arranging the insurance and this will invariably be donthe seller is responsible for arranging the insurance and this will invariably be done under an open policy e under an open policy (See note 3.(See note 3. 预约保险单预约保险单 )) in the seller's name. However th in the seller's name. However the "insurable interest" transfers either at ship's rail port of SHIPMENT e "insurable interest" transfers either at ship's rail port of SHIPMENT (( 在装运港船在装运港船舷舷 )) for CIF contracts for CIF contracts (When trade is made on CIF terms, ship's rail is taken as t(When trade is made on CIF terms, ship's rail is taken as the dividing line of delivery of goods and risk exposure. Once goods are loadehe dividing line of delivery of goods and risk exposure. Once goods are loaded across ship's rail, the seller finishes delivery of goods and shifts the risk expd across ship's rail, the seller finishes delivery of goods and shifts the risk exposure to the buyer, who bears the risk thereafter and has the legal right to mosure to the buyer, who bears the risk thereafter and has the legal right to make a claim on the insurance company for compensation should loss or damaake a claim on the insurance company for compensation should loss or damage occur.) ge occur.) or when the FIRST carrier or when the FIRST carrier (the person or company that transports go(the person or company that transports goods for others for payment ods for others for payment 承运人，承运公司承运人，承运公司 )) (Goods may be transported by (Goods may be transported by more than one carriers. When trade is made under CIP condition, delivery of more than one carriers. When trade is made under CIP condition, delivery of goods is finished and the risk exposure is shifted from the seller to the buyer goods is finished and the risk exposure is shifted from the seller to the buyer when the first carrier take over the goods. Under CIP condition, delivery of gowhen the first carrier take over the goods. Under CIP condition, delivery of goods may take place at the depot, the storehouse where goods are kept before ods may take place at the depot, the storehouse where goods are kept before shipment)shipment) takes over the goods under CIP. Thus the responsibility for loss or da takes over the goods under CIP. Thus the responsibility for loss or damage to the goods transfers to the buyer at the port or depot in the UK even thoumage to the goods transfers to the buyer at the port or depot in the UK even though the seller has insured right through to the final destination gh the seller has insured right through to the final destination (the port of destin(the port of destination)ation). It is possible for the buyer to make a claim on the seller's open policy beca. It is possible for the buyer to make a claim on the seller's open policy because of two clauses:use of two clauses:

* Claims Payable Abroad (CPA) * Claims Payable Abroad (CPA) 国外可支付索赔国外可支付索赔 The insurers will accept a claim either at the overseas destina tThe insurers will accept a claim either at the overseas destina t

ion, usually through the nearest Lloyd's ion, usually through the nearest Lloyd's (See note 4)(See note 4) or Compan or Company's agent, or here where the policy was issued, All they require is y's agent, or here where the policy was issued, All they require is that the claim is properly documented that the claim is properly documented (the claim is made with (the claim is made with proper documents)proper documents), and as the documents can only be in one pl, and as the documents can only be in one place then there is no possibility of dual claims. Thus it is perfectly ace then there is no possibility of dual claims. Thus it is perfectly possible for the buyer to pay the seller the full CIF or CIP value anpossible for the buyer to pay the seller the full CIF or CIP value and use the documents to make the insurance claim for the insured d use the documents to make the insurance claim for the insured value.value.

Just what claims documents are required we will examine latJust what claims documents are required we will examine later but we still have the problem of the buyer establishing an insuer but we still have the problem of the buyer establishing an insurable interest rable interest (making the insurance company accept his clai(making the insurance company accept his claim to have the insurable interest)m to have the insurable interest) in order to make the claim. Th in order to make the claim. This is solved by:is is solved by:

* Policy Proof of Interest (PPI) * Policy Proof of Interest (PPI) 凭保险单证明的保险利益凭保险单证明的保险利益

In simple terms this means that possession of the policy is suffi cient to In simple terms this means that possession of the policy is suffi cient to prove insurable interest. In reality it is the insurance certificate prove insurable interest. In reality it is the insurance certificate (( 保险凭保险凭证证 )), and supporting claims documents, which provides such proof. Such , and supporting claims documents, which provides such proof. Such certificates would be endorsed on the reverse side certificates would be endorsed on the reverse side (such certificates w(such certificates would have the seller's name written or signed on the back ould have the seller's name written or signed on the back 背签，背背签，背书书 ) ) to make such a transfer possible, in the same way that a bill of ladinto make such a transfer possible, in the same way that a bill of lading g (( 提单提单 . a receipt of a shipment issued by the carrier to the shipper . a receipt of a shipment issued by the carrier to the shipper (( 托运人 托运人 i.e. the seller). The original bill of lading (i.e. the seller). The original bill of lading ( 正本提单正本提单 ) is eviden) is evidence of liability of the carrier. The consignee (ce of liability of the carrier. The consignee ( 收货人 收货人 i.e. the buyer) geti.e. the buyer) gets it from the seller after payment, and uses it as the legal document ts it from the seller after payment, and uses it as the legal document to acquire possession of the goods at the destination.)o acquire possession of the goods at the destination.) may be endors may be endorsed to transfer title in the goods ed to transfer title in the goods (hand over the legal right to the posse(hand over the legal right to the possession of the goods)ssion of the goods)..

Indemnity Indemnity 赔偿投保人赔偿投保人(money paid as compensation for loss or damage to indemnify the in(money paid as compensation for loss or damage to indemnify the insured)sured)

Most insurance is based on the fact that the inMost insurance is based on the fact that the insurers promise to indemnify the insured. That surers promise to indemnify the insured. That is, they promise to put them back into the situis, they promise to put them back into the situation they were in before the loss. It is obviousation they were in before the loss. It is obviously not a principle of life insurance ly not a principle of life insurance (( 人寿保险 人寿保险 In In life insurance, the insurance company, obvilife insurance, the insurance company, obviously unable to put the dead person back to ously unable to put the dead person back to life, indemnifies the deceased's family)life, indemnifies the deceased's family). In p. In practice the indemnity on cargo insurance policractice the indemnity on cargo insurance policies is expressed as an amount of money, the inies is expressed as an amount of money, the insured value sured value (( 保险金额保险金额 )) of the goods. of the goods.

The Marine Insurance Act The Marine Insurance Act (( 海上保险法 海上保险法 Authority of this British act is iAuthority of this British act is internationally recognized)nternationally recognized) of 1906 specifies of 1906 specifies (( 明文规定明文规定 )) that the insure that the insured value of the goods must be the "prime cost d value of the goods must be the "prime cost (in trade: the cost of purc(in trade: the cost of purchase of goods hase of goods 进货成本，进货价格进货成本，进货价格 ; in production: the cost of labor an; in production: the cost of labor and materials d materials 主要成本，亦称直接成本主要成本，亦称直接成本 )) plus all expenses incidental to shi plus all expenses incidental to shipping pping (additional expenses that accompany shipping, expenses apar(additional expenses that accompany shipping, expenses apart from shipping expense t from shipping expense 各种运输附带费用各种运输附带费用 )) plus charges of insuranc plus charges of insurance”; in practice the typical insured value is CIF plus 10 %. The additional e”; in practice the typical insured value is CIF plus 10 %. The additional 10 % is there to represent the buyer's potential profit. After all, the sell10 % is there to represent the buyer's potential profit. After all, the seller's profit is in the ex-works price er's profit is in the ex-works price (See note 5)(See note 5) and if the goods had arriv and if the goods had arrived then the buyer would presumably have made a profit on top of the CIed then the buyer would presumably have made a profit on top of the CIF price they have agreed to pay. The insurance company are in fact indeF price they have agreed to pay. The insurance company are in fact indemnifying both parties. This seems even more logical when you consider mnifying both parties. This seems even more logical when you consider the situation in which the buyer is making the claim. They claim the full the situation in which the buyer is making the claim. They claim the full CIF they have paid the seller plus a percentage to cover their lost profits. CIF they have paid the seller plus a percentage to cover their lost profits. In this respect it is perfectly acceptable to the insurers to insure goods foIn this respect it is perfectly acceptable to the insurers to insure goods for CIF plus 20 % or CIF plus 30 % because the premiums are also calculater CIF plus 20 % or CIF plus 30 % because the premiums are also calculated on the insured values.d on the insured values.

Uberrimae Fidei (Utmost Good Faith) Uberrimae Fidei (Utmost Good Faith) 最诚信的最诚信的

Once again this is a principle which aOnce again this is a principle which applies to all forms of insu rance. The insupplies to all forms of insu rance. The insurers are almost totally dependent on the rers are almost totally dependent on the insured to disclose any relevant informainsured to disclose any relevant information regarding the insured risks.tion regarding the insured risks.

Imagine the situation in which an exporter makes a shipment by road Imagine the situation in which an exporter makes a shipment by road (send goo(send goods by truck or rail ds by truck or rail 陆运一批货物陆运一批货物 )) to Germany at the beginning of June, and it ar to Germany at the beginning of June, and it arrives intact rives intact (undamaged)(undamaged) during the second week of June. At the end of June the during the second week of June. At the end of June the seller must declare all the months shipments to the insurance company in order fseller must declare all the months shipments to the insurance company in order for them to calculate the premiums. However the safe arrival of the German consior them to calculate the premiums. However the safe arrival of the German consignment gnment (the goods sent to Germany)(the goods sent to Germany) could persuade the seller not to declare th could persuade the seller not to declare the shipment because, after all, the insurance is not actually required for that consie shipment because, after all, the insurance is not actually required for that consignment. This would be a clear and serious breach of good faith gnment. This would be a clear and serious breach of good faith (a violation of th(a violation of the principle of good faith.)e principle of good faith.) and, if deliberate, would almost certainly lead to the p and, if deliberate, would almost certainly lead to the policy being voided olicy being voided (cause the insurers to make the policy invalid)(cause the insurers to make the policy invalid) by the insurer by the insurers. It is obviously inequitable s. It is obviously inequitable (formal: unjust, unfair)(formal: unjust, unfair) for the insured to avoid payi for the insured to avoid paying premiums on goods which they already know have arrived safely. Goods are dng premiums on goods which they already know have arrived safely. Goods are declared "safe or not safe, lost or not lost". Good faith does work both ways. Imagieclared "safe or not safe, lost or not lost". Good faith does work both ways. Imagine the situation in which the goods are actually written off due to a collision ne the situation in which the goods are actually written off due to a collision (the (the goods are so damaged as to be valueless due to an accident in which the trucgoods are so damaged as to be valueless due to an accident in which the trucks collide with/run into other vehicles) ks collide with/run into other vehicles) on their way to Germany. The insurance on their way to Germany. The insurance company's good faith is that they accept the claim, at the end of June, even thoucompany's good faith is that they accept the claim, at the end of June, even though the loss occurred before declaration, that is, before they knew of the consignmgh the loss occurred before declaration, that is, before they knew of the consignment.ent.

shipment:shipment:(uncountable) shipping, loading goods on a ship, sending goods by ship, (uncountable) shipping, loading goods on a ship, sending goods by ship, rail, truck, or air.rail, truck, or air.(countable) the whole amount of goods sent at one time(countable) the whole amount of goods sent at one timeconsignment:consignment: goods that a goods that are consigned (re consigned ( 托运的货物托运的货物 ); consignor (); consignor ( 发货人发货人 ); consignee (); consignee ( 收货人收货人 ); co); consignment note (nsignment note ( 发货通知发货通知 ))breach:breach:a breach of duty (a breach of duty ( 不忠于职守不忠于职守 ); a breach of contract (); a breach of contract ( 违约违约 ); a breach of c); a breach of confidence (onfidence ( 泄密行为泄密行为 ); a breach of security (); a breach of security ( 违反安全的行为违反安全的行为 ))writeoff: writeoff:

cancel, give up, recognize as a loss, treat as if nonexistent. e.g.cancel, give up, recognize as a loss, treat as if nonexistent. e.g.The company wrote off the loss as a bad debt. (cancel)The company wrote off the loss as a bad debt. (cancel)He has just written off a new bicycle. (damage it beyond repair)He has just written off a new bicycle. (damage it beyond repair)The new blow came at a time when his classmates have, in effect, writteThe new blow came at a time when his classmates have, in effect, written him off and are looking for a way to dump him. (treat him as if he is non him off and are looking for a way to dump him. (treat him as if he is nonexistent)nexistent)

Subrogation Subrogation 代位求偿代位求偿(transfer of a legal right or claim to an(transfer of a legal right or claim to another person. Here it means the proceother person. Here it means the process in which the insurance company obss in which the insurance company obtains the right to claim on the carrier, tains the right to claim on the carrier, from the insured, after paying the claifrom the insured, after paying the claim, and then makes the claim on the cam, and then makes the claim on the carrier, or more often, on the carrier's inrrier, or more often, on the carrier's insurance company)surance company)

In the event that loss or damage occurs due to an insured risk theIn the event that loss or damage occurs due to an insured risk then a claim will be made on the insurance company. If we assume tn a claim will be made on the insurance company. If we assume that the claim is successful then the insured will regard the mattehat the claim is successful then the insured will regard the matter as closed. However, if nothing else happens but we have a carrir as closed. However, if nothing else happens but we have a carrier, who may well be liable for the loss or damage, who has apparer, who may well be liable for the loss or damage, who has apparently avoided any liability. It is the principle of subrogation whicently avoided any liability. It is the principle of subrogation which avoids this, in that it allows the insurance company to take actih avoids this, in that it allows the insurance company to take action against liable carriers in the name of the insured. The exporteon against liable carriers in the name of the insured. The exporter, or importer, must maintain any rights of action against carriers,r, or importer, must maintain any rights of action against carriers, by avoiding giving clean receipts by avoiding giving clean receipts (a receipt confirming that go(a receipt confirming that goods received are in good order and condition with the right aods received are in good order and condition with the right amount mount 清洁收据清洁收据 )) and advising and advising (commercial: inform, notify)(commercial: inform, notify) lo loss or damage as soon as possible, ideally within 3 days, but these ss or damage as soon as possible, ideally within 3 days, but these rights are subrogated to insurance company once the claim has rights are subrogated to insurance company once the claim has been paid. been paid.

It is very fair to the insured in that the claim must be paid first. TIt is very fair to the insured in that the claim must be paid first. The insurance company cannot make a claim on the carrier and ohe insurance company cannot make a claim on the carrier and only pay the insured if the action against the carrier is successful. nly pay the insured if the action against the carrier is successful. The insured will have a valid claim irrespective of the carrier's liaThe insured will have a valid claim irrespective of the carrier's liability. Also, in the unlikely event that the insurers actually receive bility. Also, in the unlikely event that the insurers actually receive more in their claim on the carrier than they have paid to the insurmore in their claim on the carrier than they have paid to the insured, then the insured receives the difference. The whole thing beced, then the insured receives the difference. The whole thing becomes somewhat more complicated because the carriers will ofteomes somewhat more complicated because the carriers will often have taken out insurance to cover their liability to the owners on have taken out insurance to cover their liability to the owners of the goods. This is known as a Goods in Transit (GIT) policy and vf the goods. This is known as a Goods in Transit (GIT) policy and valid claims will be met by the carrier's insurance company. What alid claims will be met by the carrier's insurance company. What this means is that claims against carriers are often made by insurthis means is that claims against carriers are often made by insurance companies and that disputes may well be settled between tance companies and that disputes may well be settled between the two insurance companies involved.he two insurance companies involved.

Contingency (Seller's Interest) Insurance Contingency (Seller's Interest) Insurance 意外事件保险意外事件保险(insurance against event that may unexpectedly happen to the sellers)(insurance against event that may unexpectedly happen to the sellers)

Many exporters find that there are situations where they are making export shMany exporters find that there are situations where they are making export shipments for which the buyer is responsible for cargo insurance. The most obvious ipments for which the buyer is responsible for cargo insurance. The most obvious would be CFR (C & F) shipments would be CFR (C & F) shipments (shipments made on CFR terms)(shipments made on CFR terms), although the s, although the same situation applies to FOB sales ame situation applies to FOB sales (sales made on FOB terms)(sales made on FOB terms). In some markets . In some markets CFR shipments are very common as the importer's country have a requirement thCFR shipments are very common as the importer's country have a requirement that cargo insurance is taken out with one of their na tional insurance companies, raat cargo insurance is taken out with one of their na tional insurance companies, rather than a foreign company in the seller's country. This is particularly common ither than a foreign company in the seller's country. This is particularly common in African markets. The risk here is that loss or damage can occur and the buyer ren African markets. The risk here is that loss or damage can occur and the buyer refuses to take up the goods or documents, it may even be that the buyer has not acfuses to take up the goods or documents, it may even be that the buyer has not actually insured the goods. If the buyer attempts to avoid liability, and legal action itually insured the goods. If the buyer attempts to avoid liability, and legal action is often pointless, it can lead to a substan tial loss to the exporter. Seller's interest is often pointless, it can lead to a substan tial loss to the exporter. Seller's interest insurance covers the contingency that the buyer is responsible for insurance, loss nsurance covers the contingency that the buyer is responsible for insurance, loss or damage occurs and the buyer has failed to insure. In such a case, and for a relaor damage occurs and the buyer has failed to insure. In such a case, and for a relatively small premium, the seller would be able to make a claim. It is often importatively small premium, the seller would be able to make a claim. It is often important that the existence of such cover is not revealed to the buyer. nt that the existence of such cover is not revealed to the buyer.

Proximate Cause Proximate Cause 近因，直接原因近因，直接原因(the most direct cause of loss or damage)(the most direct cause of loss or damage)

It is perfectly reasonable for insurance companies to prefer that claims are mIt is perfectly reasonable for insurance companies to prefer that claims are made for loss or damage due to risks which are actually covered by the policy. In faade for loss or damage due to risks which are actually covered by the policy. In fact many claims fail simply because the cause of the loss is not an insured risk. Whct many claims fail simply because the cause of the loss is not an insured risk. When a loss occurs it is often the result of not one clear event but of a series of eventen a loss occurs it is often the result of not one clear event but of a series of events which, cumulatively s which, cumulatively (added together)(added together), lead to a loss. What the insurers must do , lead to a loss. What the insurers must do is to establish the actual cause of the loss, what they describe as the "active, efficiis to establish the actual cause of the loss, what they describe as the "active, efficient cause", that is the Proximate Cause. As an example of this in action consider a ent cause", that is the Proximate Cause. As an example of this in action consider a situation in which a road vehicle is in collision during transit. If goods are damagesituation in which a road vehicle is in collision during transit. If goods are damaged in the collision then there is a valid claim as collision is an obvious insured risk. d in the collision then there is a valid claim as collision is an obvious insured risk. However if the goods are not damaged but the vehicle is, and this results in a delaHowever if the goods are not damaged but the vehicle is, and this results in a delay of the journey for repairs, and your Christmas cards arrive at the wholesalers on y of the journey for repairs, and your Christmas cards arrive at the wholesalers on Boxing Day Boxing Day (a public holiday in Britain that falls on the first week day after Ch(a public holiday in Britain that falls on the first week day after Christmas day ristmas day 节礼日，圣诞礼馈赠日节礼日，圣诞礼馈赠日 )), then there is no claim because delay is not a, then there is no claim because delay is not an insured risk. It is therefore important to investigate the process or events leadinn insured risk. It is therefore important to investigate the process or events leading to a loss, and thus establish the Proximate Cause, and then ensure that this is ag to a loss, and thus establish the Proximate Cause, and then ensure that this is an insured risk.n insured risk.

Claims DocumentsClaims Documents Assuming the claim is actually being made for the consequenAssuming the claim is actually being made for the consequen

ces of an insured risk. The second reason that claims may fail is tces of an insured risk. The second reason that claims may fail is that they are not correctly documented. The insurance companiehat they are not correctly documented. The insurance companies do not require excessive documentation and ask for nothing ths do not require excessive documentation and ask for nothing that is not relevant to the claim. The documents typically requesteat is not relevant to the claim. The documents typically requested would include: d would include:

* original policy or certificate * original policy or certificate 正本保险单或正本保险凭证正本保险单或正本保险凭证 Bearing in mind that the policy is proof of insurable interest. Bearing in mind that the policy is proof of insurable interest.

This is essential. It also describes the subject matter This is essential. It also describes the subject matter (what is bei(what is being dealt with or discussed. Here it refers to the goods that arng dealt with or discussed. Here it refers to the goods that are insured)e insured), insured value and appropriate clauses., insured value and appropriate clauses.

* invoices and packing specifications * invoices and packing specifications 发票和包装说明发票和包装说明(an invoice: a document supplied by the seller with a description of t(an invoice: a document supplied by the seller with a description of the goods being sole, the quantities, prices, payment terms, and methe goods being sole, the quantities, prices, payment terms, and method and time of shipment)hod and time of shipment)(packing specifications: instructions for the packing of goods to be t(packing specifications: instructions for the packing of goods to be transported, concerning packing materials (paper, wood, metal or plransported, concerning packing materials (paper, wood, metal or plastic), packing unit (number or weight for each unit), packing methoastic), packing unit (number or weight for each unit), packing method (full packed, part packed, soft packed or hard packed), packing styd (full packed, part packed, soft packed or hard packed), packing style (barrel, case, box, or bag), packing marks (shipping marks), indicale (barrel, case, box, or bag), packing marks (shipping marks), indicative marks and warning marks)tive marks and warning marks)

Needed to assess the percentage of a part loss and specifically wherNeeded to assess the percentage of a part loss and specifically where lost or damaged goods were packed within the consignment.e lost or damaged goods were packed within the consignment.

* original bill of lading or other transport document* original bill of lading or other transport document Proving the goods were in apparent good order and condition when Proving the goods were in apparent good order and condition when

shipped and evidences the contract of carriage shipped and evidences the contract of carriage (( 承运合同承运合同 )), should actio, should action later be taken against the carrier.n later be taken against the carrier.

* survey report * survey report (( 检验报告检验报告 ) ) or other evidence oor other evidence of loss or damagef loss or damage(survey report: a report made by the insure(survey report: a report made by the insurer's agent on the cause, nature and extent of r's agent on the cause, nature and extent of damage to goods. It is one of the documentdamage to goods. It is one of the documents that have to be presented when the consigs that have to be presented when the consignee makes a claim on the insurer.)nee makes a claim on the insurer.)

An independent report of the nature and eAn independent report of the nature and extent of the loss should ideally be produced by xtent of the loss should ideally be produced by an approved agency, for example, a Lloyd's Agan approved agency, for example, a Lloyd's Agent.ent.

* landing account/weight notes at destination* landing account/weight notes at destination(After goods are landed from a ship, they are usually stored in the st(After goods are landed from a ship, they are usually stored in the stowage, i.e. the dock warehouse (owage, i.e. the dock warehouse ( 货栈、货仓货栈、货仓 ). Then the stowage bro). Then the stowage broker, i.e. the dock warehousing company (ker, i.e. the dock warehousing company ( 货栈经纪人货栈经纪人 ) sends a lading ) sends a lading account (account ( 卸货报告卸货报告 ) to the owner of the goods showing the quality an) to the owner of the goods showing the quality and conditions of the goods and starting the date of warehouse rent. Td conditions of the goods and starting the date of warehouse rent. The landing account is usually accompanied by a weight note (he landing account is usually accompanied by a weight note ( 重量重量单单 ), which is a list of the marks and numbers of all the packages wit), which is a list of the marks and numbers of all the packages with the gross weight of each (h the gross weight of each ( 毛重毛重 ) and the average tare () and the average tare ( 皮重皮重 ))))..

The carrier’s or stowage broker's record of the out-turn of the goodThe carrier’s or stowage broker's record of the out-turn of the goods s (the total amount of goods landed ashore ((the total amount of goods landed ashore ( 卸货量卸货量 )))) at destination. at destination. Useful for identifying where damage took place in the container Useful for identifying where damage took place in the container (a large (a large packing case of standardized size for transportation of goods (packing case of standardized size for transportation of goods ( 集装集装箱箱 )) )) or in the vessel or haulage unit or in the vessel or haulage unit (the tool that transport the goods (the tool that transport the goods by road, referring to trucks or trains (by road, referring to trucks or trains ( 陆路运输工具陆路运输工具 ))))..

* any correspondence with the carrier or * any correspondence with the carrier or other partiesother parties

Obviously the insurers wish to maintain Obviously the insurers wish to maintain any legal rights against other parties anany legal rights against other parties and insist that the insured do not give thed insist that the insured do not give them away.m away.

HomeworkHomework

1. Exercise II, V.1. Exercise II, V. 2. Oral Work: ①. Retell the basic principl2. Oral Work: ①. Retell the basic principl

es of insurance; ②. How to take out insues of insurance; ②. How to take out insurance policy and make claim under CIF crance policy and make claim under CIF condition. ondition.