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ACQ 2016-1

Introduction of cargo Insurance

Coverage of goods in transit - during land transportation as well as transport by sea or air. Insured must have an insurable interest in the goods at the time of loss. The insurable interest or obligation to take out insurance is usually determined by a term of delivery, such as Incoterms.

The marine cargo insurance usually covers:

  • Loss of damage to cargo during transit
  • expected profit from sale of goods at place of destination
  • financial losses attributed to delay in start-up (for project cargo insurance) caused by loss or non-delivery of insured cargo

Coverage scope

Under normal circumstances, cargo underwriters offer Open Cover Insurance Policy covers shipments by any conveyance (by sea, by air, by truck, by rail) on annual basis. Coverage is worldwide and could be on “warehouse to warehouse” basis including overloading, transshipments and intermediate storage. Depending on the types of cargo, the cover would be on ICC (A) [All Risks] or ICC (C) [Named perils] basis.

However, shipments to, from or within countries under UN and/or US sanctions are usually excluded or limited.