There are also eleven types of General Additional Risk. Neither of them can be insured against alone. The insured is allowed to insure against one or several of them on the basis that he has already chosen FPA or WPA. The insured choosing AR does not need to consider them as AR has naturally covered all of them. The eleven types of General Additional Risk are (1)Theft, Pilferage and Non-Delivery (TPND), (2)Fresh Water &/or Rain Damage (FWRD), (3)Risk of Shortage (4)Risk of Intermixture and Contamination, (5)Risk of Leakage (6)Risk of Clash & Breakage, (7)Risk of Odour, (8)Heating & Sweating Risk (9)Hook Damage Risk, (10)Risk of Rust, (11)Breakage of Packing Risk.
Under CIF term and under payment method of Letter of Credit (L/C), after shipping the goods the exporter will go to the negotiating bank requesting the payment of the shipped cargo by submitting several required documents, among which the insurance policy is a must together with the Bill of Lading(B/L), commercial invoice and draft, etc.
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Part One
3. The Role of the Insurance Policy If the damage or loss of the consignment, which has been insured, occurs
during the period of transportation and discharge, the insured will certainly lodge a claim asking for indemnity from the insurer. Under such circumstances the insurance policy of the cargo becomes an indispensable document to be presented.
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Part One
2. The Coverage of Insurance
Usually, there are three kinds of basic risks package. They are FPA (Free from Particular Average), WA/WPA (With Particular Average) and AR (All Risks). The insured needs to choose one of them to insure against. In terms of the range of risks coverage, FPA is included in WA/WPA, and WA/WPA is included in AR.
世纪商务英语-外贸函电unit 11 Insurance
Contents
▪ Part One
Basic Knowledge Concerned
▪ Part Two
Letter-writing Guide
Other Commonly Used Expressions and Sentences ▪ Part Three
▪ Part Four
Sample Letters
▪ Part Five
Practical Training
2020/12/13
Part One
1. The Significance of Insurance Insurance is an essential procedure in international trade. The insured can
obtain the guarantee from the insurance company (the insurer) to get compensation of the cargo damaged or lost in transit at a relatively small cost namely the insurance premium.
Other than the above risks there are another eight kinds of Special Additional Risk, against one or several of which the insured can insure the cargo.
Almost every international transaction by sea gets involved in insurance because the risks in the sea voyage are unexpected and varied. Therefore it now has become the common sense that insurance should be bought in an international transaction, either by the exporter or the importer.