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Basic Terms and Conditions (1) ICC (A)

A Study on the Institute Cargo Clauses(ICC) used in marine insurance transactions

2. Basic Terms and Conditions (1) ICC (A)

The ICC (A) is the largest coverage of insurers and is a former risk collateral condition in the Old Testament. This Agreement specifies the scope of liability covered by the insurer and covers all insurance accidents except in the case of insurer general liability risk, war and strike risk and non-intervention of the vessel.

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(2) ICC (B)

The ICC (B) is collateralized by the Old Testament. Like the existing insurance terms, the scope of the collateral risk was more easily understood by specifically listing the collateral risk to be compensated by insurers, supplementing that the previous security risk was unclear. In "B Clause", in addition to the risk covered by "C Clause",

[1] Disposal and damage of insurance purposes that are significantly related to earthquakes, volcanic eruptions, and lightning;

[2] Loss, damage to insurance purposes resulting from deck loss;

[3] insurance purposes resulting from the intrusion of seawater, lakes and rivers into the main line, substrates, potholes, transportation, containers, forklift trucks, or storage areas;

[4] The risk of all damages per pack unit falling to the sea or falling to the deck during shipment or loading as a main line or sub shipment is covered. The indemnification risk in "B Clause" is the same as in "C Clause

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(3) ICC (C)

The ICC (C) is the condition that the insurer has the narrowest coverage and is subject to the sole termination collateral of the Old Testament. It is important to note that under any exemption, an insurer will not compensate for any loss in any case for general immunity and non-compliance of Article 4. However, any additional matters that fall under Article 6 and 7 of the Alliance Strike Terms and Conditions can be compensated

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3. Additional Conditions

(1) TPND (Theft, Pilferage and Non-delivery)

Pilferage means the discharge of some of the packing contents by petty theft.

Non-Delivery is when a shipment of packing units has not arrived at its destination on a whim.

(2) RFWD (Rain and/or Fresh Water Damage)

[Sea Water Damage] is secured as a condition to compensate for damage caused by rain or fresh water, but [RFWD] is not covered by the nature of the cargo, even if it is attached under [WA] conditions. Rain damage can occur while in the buoyant line.

(3) Breakage

[A/R] or ICC(A) conditions take comprehensive accountability to compensate insurers for all risks, except for legal and liability risks specified in the terms of the terms and conditions. However, breakage may be an ordinary loss during transport, or a consequential loss of cargo-specific defects or properties.

Therefore, for goods subject to breakage, such as glass and ceramic products and precision instruments, the insurance premium must be paid after the listing of the risk of damage to achieve compensation, even if the collateral conditions are [A/R] or ICC (A)

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(4) Leakage/Shortage

[Shortage] refers to the loss of a liquid or gas discharge from a vessel, mainly due to weight loss or lack of quantity.

(5) Sweat and Heating

[Sweat Damage] is the damage caused by condensation of moisture in the vessel, and [Heating Damage] is an increase in the temperature of abnormal temperature or ventilation caused by moisture containing grains. These two losses are often difficult to distinguish because they are related.

(6) JWOB (Jettison and Washing Over Board)

Offshore freight is generally loaded onto the docks, but logs, vehicles, living things and animals are often loaded onto deck, such as when cargo is dropped or lost by a windward. Therefore, it is desirable to apply [FPA + JWOB] condition when applying for cargo insurance in the case of the origin.

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(7) COOC (Contact with Oil and/or Other Cargo)

Loss of water when contaminated in contact with oil and other cargo.

(8) Hook and Hole

The conditions attached when a cargo, such as textiles, is insured for damages caused by the use of hook during loading and unloading operations.

(9) Contamination

Loss of quality due to seawater or fresh water

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 What is a cargo insurance policy?

 An insurance cargo policy should specify the terms on which the indemnity cover has been provided by giving an express reference to one of above mentioned ICC cargo clauses.

 Furthermore, an insurance cargo policy may mention additional risks covered such as war risks and strike risks.

 Information that could be mentioned on cargo insurance polices are :

 Amount of insurance premium

 Shipment details such as port of loading, port of discharge, vessel name and voyage number, description of goods etc.

 Current of the insurance cover

 Insurance cover amount

 Insurance company’s agent at the port of destination

 Procedures for the claim and required documents

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 Important Aspects of Insurance Policies

 Insurance policies issued by the insurance companies for specific transactions.

 An insurance company gets the details of the shipment from the policy holder and prepares his/her insurance policy offer.

 If insurance holder agrees on the terms and conditions as well as insurance premium, then the insurance company or the underwriter issues the insurance policy.

 An insurance policy generally issued when the goods are loading and expires on completion of unloading from the carrying vessel at the port of destination.

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 What is a cargo insurance certificate?

 In some cases, exporters or importers do not prefer to make insurance for each shipment separately, but they sign an insurance cover for a certain period of time such as 1 year.

 During the insurance period, as illustrated 1 year on the above example, exporter’s all shipments will be covered with a cargo insurance. Periodic insurance contracts are also known as open cover.

 In case the exporter, whom uses an open cover insurance, needs an insurance document for a specific shipment, then insurance company issues an insurance certificate.

 Insurance certificates are not issued as a stand alone insurance document for a specific shipment, but they are issued under an open cover.

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 What is a cargo insurance certificate?

 Both insurance policy and insurance certificate should be issued by an insurance company or an underwriter.

 Both documents should state identical information such as:

 Insurance terms and additional risks covered

 Amount of insurance premium

 Shipment details such as port of loading, port of discharge, vessel name and voyage number, description of goods etc.

 Current of the insurance cover

 Insurance cover amount

 Insurance company’s agent at the port of destination

 Procedures for the claim and required documents

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 What is the difference between insurance policy and insurance certificate?

 May be the only difference between insurance policy and insurance certificate occurs under letter of credit payment.

 According to L/C rules, an insurance policy is acceptable in lieu of an insurance certificate or a declaration under an open cover. But reverse situation is not valid.

 If the seller presents documents under a letter of credit, then the seller should keep in mind that the seller can present insurance policy instead of an insurance certificate.

 But the seller cannot present an insurance certificate instead of an insurance policy under a letter of credit.

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Marine Insurance

2. Procedures of Marine Insurance

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