1、Chapter 5 Insurance第1页，共21页。Learning ObjectivesnTo understand the functions of insurance in international sale transactionsnTo grasp main types of insurancenTo have a good knowledge of different types of insurance policiesnTo understand the relationships of the parties involved in insurance contract
2、第2页，共21页。Structure of the ChapternSection One:Functions of InsurancenSection Two:Basic Principles of InsurancenSection Three:Types of Risks,Losses and Expenses nSection Four:Main Types of InsurancenSection Five:Types of Insurance Policies nSection Six:The Insurance Contract 第3页，共21页。Section 1nProvid
3、e protection against future risks,accidents and uncertainty.nA device to share the financial loss of a few among many others.nPromote exports第4页，共21页。Section 2nInsurable interest:the assured must have an insurable interest in the subject matter insured at the time of the loss.nUtmost good faith:If a
4、ny fraud or deception is discovered,the other party has the right to avoid the contract and asks for compensation.This concept includes:1)disclosure 2)representation 3)warrantynPrinciple of indemnity:the insured cannot recover more than his or her actual loss from the insurer.第5页，共21页。第6页，共21页。第7页，共
5、21页。Section 3 external risks:1)general external risks:theft and pilferage,contamination,leakage,breakage,sweating and/or heating,taint of odor,rusting,hook damage,fresh and/or rain water damage,short-delivery and non-delivery,shortage in weight,clashing and so on 2)special external risks:war,strike
6、and failure to delivery due to some special laws or regulations.第8页，共21页。Section 3nTypes of loss:total loss,partial loss1)Total loss:actual total loss:There is an actual total loss of goods when they are destroyed,or so damaged as to cease to be the thing insured,or where the assured is irretrievabl
7、y deprived of them.第9页，共21页。Section 3 constructive total loss:Goods may be still in existence but must be considered from a commercial point of view as being totally lost either because an actual loss appears inevitable or because it would only be possible to save them at a cost greater than their v
8、alue after being saved.第10页，共21页。Section 32)partial loss:general average loss particular charges particular average loss第11页，共21页。Section 4Main types of insuranceBasic coverage:1)FPA:(Free from Particular Average)is a limited form of cargo insurance coverage under which no partial loss or damage is
9、recoverable.2)WPA:(With Particular Average),a wider cover than FPA.It provides extensive cover against all loss or damage due to marine perils throughout the duration of the policy.第12页，共21页。Section 43)All Risks:the most comprehensive of the three basic coverage under which the insurer is responsibl
10、e for all total or partial loss of,or damage to the goods insured either arising from sea perils or general external causes.第13页，共21页。Section 4nAdditional coverage1)General additional risks:TPND(Theft,Pilferage and Non-delivery),Fresh Water Rain Damage,Risk of storage,Risk of Intermixture and Contam
11、ination,Risk of Leakage,Risk of Clash and Breakage,Risk of Odor,Damage caused by Heating and Sweating,Hook Damage,Risk of Rust,Breakage of Packing,etc.第14页，共21页。Section 42)Special additional risks:War Risk,Strike Risks,Failure to delivery Risk,Import Duty risk,Rejection Risk,etc.第15页，共21页。Section 4M
12、ain exclusions of the insurers liability nLoss or damage attributable to willful misconduct of the assurednOrdinary leakage,loss of weight or wear and tearnDefects in packing.nInherent vice or nature of the cargo.nDelay.nInsolvency of financial default of carriers etc.第16页，共21页。Section 4nNuclear wea
13、pons of all kinds.This exclusion is separate from the normal war exclusions because such weapons create a risk of loss or damage far beyond any war zone.nUnseaworthiness if the assured or his servants are privy to it.If they are not,the insurers waive their rights under the warranty of seaworthiness
14、 implied in the contract by the Marine Insurance Act.nArrest,restraint and detention.第17页，共21页。Section 5nValued policy:a policy which specifies the agreed valued of the subject matter insurednUnvalued Policy:an unvalued policy states merely the maximum limit of the sum insured and leaves the insurab
15、le value to be ascertained subsequently.nVoyage policy:Under a voyage policy the subject matter is insured in transit from one point to another第18页，共21页。Section 5nTime policy:Under a time policy the subject matter is insured for a fixed time.nMixed Policy:Under a mixed policy the subject matter is i
16、nsured both for a particular journey and a certain period of time.nFloating Policy:The floating policy lays down the general conditions of insurance,but not the particulars of the individual consignments intended to be covered.第19页，共21页。Section 5nOpen cover:another method of effecting general insura
17、nce for recurring shipments,the details of which are unknown when the insurance is taken out.nBlanket policy:usually provides that the assured need not advise the insurer of the individual shipments and that a lump sum premiuminstead of a premium at several ratesshall cover all shipments.nThe Period of Cover第20页，共21页。Section 6 nThe assured,the insurer and the brokernSample of insurance policy第21页，共21页。
