inCotermS 2010Who should or shall take out Marine Cargo Insurance
marine Cargo insurance covers your goods at the times when they are most vulnerable, namely when they are in transit. therefore there are a range of factors that you should consider in order to maximize safety and to reduce the risk of loss. remember that you own the goods during transport – both products that are not delivered and goods shipped from your address, according to the agreed delivery terms between you and your customer/supplier.
Avoid lossesYou can budget for insurance, but never for a loss or damage during transport. Therefore, it is important that you insure the goods.
Carrier liabilityUsually you assume that the carrier has the liability for damage and loss when goods are delivered into their custody. This is not always the case.
The carrier has only a limited liability for damage or loss, typically regulated by international laws and regulations.
The carriers liability varies depending on the means of transport,
CArrier liABilitY VeSSel trUCK rAil AirCrAFt
BASiS oF liABilitY Denmark Danish maritime law. reversed burden of proof § 275
Danish court general bond law, culpa with reversed burden of proof. objective liability if the road traffic Act rules apply, eg. by road accidents
law on railway undertaking.strict liability § 17 paragraph.6, section 1, cf. Cim Art. 36, § 1
Aviation Act of 1994.strict liability by damage / loss § 108reversed burden of proofby delay § 109
international marine insurance Act. reversed burden of proof § 275 (HAAG / ViSBY)
Cmr Act. reversed burden of proof § 24
Cim Convention.strict liability art. 36
Aviation Act of 1985.reversed burden of proof§ 107 - § 109(Warsaw Convention)
PerioD oF limitAtion Denmark 1 year from delivery § 501 3 years. 1 year from delivery. DSB Carriage of Goods regulations (Gr)
2 years from arrival § 118
international 1 year from delivery § 501 1 year from delivery. Cmr § 41
1 year from delivery.Cim Art. 58
2 years from arrival § 118
limitAtion oF liABilitY Denmark Damage / loss. SDr 2.00 per. kg. or SDr 667.00 per. unit. Delay max. freight amount
not regulated is typically limited by various business conditions
Damage / loss. Full load: SDr 17. Part load SDr 8.33 per. kg. gross weight. Delay 4 x freight amount
17 SDr § 111
international Damage / loss. SDr 2.00 per. kg. or SDr 667.00 per. unit. Delay max. freight amount
8.33 SDr per kg. plus duties, freight etc. § 29 Cmr. Delay. Freight amount § 32
17 SDr per kg. gross weight. Delay 4 x freight amount
17 SDr § 111
mArine CArGo inSUrAnCe – For YoUr oWn SAKe!but whatever means of transport, the losses or damages arising during transport are unfortunately seldom fully covered. Therefore, it is a good idea to take out marine cargo insurance, covering the full value of the goods.
Always remember:· That the carrier is relieved of liability if the loss or damage
occurs due to circumstances which the carrier was unable to prevent – eg. errors/omissions from the sender or receiver, loading or unloading by sender/receiver, and a variety of other things, including of course, force majeure such as war, strikes and natural disasters.
· That the carrier is free from liability if deadlines for objection and limitation rules are not respected.
· Without Marine Cargo Insurance, there is only one to take the matter up with the carrier. In this context one often learns, that there is a difference between being right and getting the right result!
In the form below you can see what you can get in compensation from the carrier, which is the basis for liability that applies and what deadlines to be respected.
CoSt AnD FreiGHt (CFr) the risk is transferred as by FoB, when the cargo is loaded aboard (released by loading device) at the vessel appointed by the seller in the named port of loading.
CArriAGe PAiD to (CPt) the risk is transferred with the seller’s delivery of goods to the first carrier.
CArriAGe AnD inSUrAnCe PAiD to (CiP) the risk is transferred as by CPt, by the seller’s delivery of the cargo to the first carrier. marine Cargo insurance is taken out by the seller to cover the buyer’s risk from the risk transfers to the point of destination.
DeliVereD At terminAl (DAt) the risk is transferred when the cargo is unloaded from the arriving means of transport in the specified terminal.
DeliVereD At PlACe (DAP) the risk is transferred when the cargo is made available for unloading from the arriving means of transport at the destination.
DeliVereD DUtY PAiD (DDP) the risk is transferred when goods are made available for unloading from the arriving means of transport at the destination (duty paid).
Free on BoArD (FoB) the risk is transferred when the cargo is loaded on board (released by loading device) the vessel appointed by the buyer in the named port of loading.
CoSt inSUrAnCe AnD FreiGHt (CiF) the risk is transferred as by FoB, when the cargo is loaded on board (released by the loading device) the vessel appointed by the seller in the named port of loading. marine Cargo insurance is taken out by the seller to cover the buyer’s risk from risk crossing point to unloading in the port of destination.
Buyer should take out insurance from when the cargo is loaded onboard the vessel designated by the seller at the named port of loading. (Seller should take out insurance for any pre-transport and loading).
the buyer should take out insurance from when the cargo is handed over to the first carrier.
Seller has an obligation to provide insurance for the buyer’s risk from delivery to the first carrier to the point of destination.
the seller should provide insurance for transportation until delivery (unloaded) at the specified terminal.
the seller should provide insurance for the shipment until cargo is made available for unloading at the destination.
the seller should provide insurance for the shipment until cargo is made available for unloading at the destination.
Buyer should take out insurance from when the cargo is loaded onboard the appointed vessel at the named port. (the seller should take out insurance for any pre-transport and loading).
Seller has an obligation to provide insurance for the buyer’s risk until the goods are unloaded at the port of destination. Buyer should take out his own insurance for transport (if any) from the port of arrival to final destination.
InsUrAnCe
InsUrAnCe
inCotermS – A Common lAnGUAGeWho has the risk during transport – the buyer or the seller?In particular when a trade occurs across national borders and cultures, there is a great difference in how people perceive things. Therefore there has been many disputes in this area when something has gone wrong – no matter who finally obtained the right, both parties have spent unnecessary time, effort and money.
These problems can be avoided altogether. The International Chamber of Commerce in Paris (ICC) has developed a set of international terms of delivery – INCOTERMS 2010 – a common ”language” which is recognized worldwide. The schedule here provides an overview of the allocation of risk and cost and the insurance consequences of the various delivery terms.
eX WorKS (eXW) the risk is transferred when the seller makes the cargo available to the buyer at the place agreed upon. (eg. factory, warehouse, etc.).
Buyer should take out insurance from when the cargo will be made available for pickup by the seller at the place agreed upon.
fAsFree AlonGSiDe SHiP (FAS) the risk is transferred when the cargo is delivered at ship side or associated loading place on the quay in the named port of shipment appointed by the buyer.
Buyer should take out insurance from when the cargo will is delivered by the seller at the place agreed upon. (the seller should take out insurance for any pre-transport).
fCAFree CArrier (FCA) the risk is transferred when the seller delivers the goods to the carrier, designated by the buyer, at the named place (loaded on means of transport).
Buyer should take out insurance from when the cargo is delivered to the carrier, designated by the buyer.
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