Consequence | Loss of benefits whose is it, he bears it | There is a contribution to the loss of all parties |
Insurance liability dangerous | Depending on the conditions, insurance is available. | All insurance conditions are covered. |
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Law on general average settlement.
When there is a general average, the interests in the journey are responsible for contributing to the general average. But how to allocate and contribute, according to what standards and rules, the parties must agree in the transport contract. Up to now, most of the bills of lading and charter contracts have stipulated (in the general average clause) that when a general average occurs, it will be resolved according to the York-Antwerp rules 1974, which were later amended in 1990 and 1994.
The allocation of general average is carried out in the following steps:
Step 1 : Determine the general loss value (Gt)
The general average value includes the value of the property sacrificed in general average and the general average expense.
Step 2 : Determine the general loss allocation ratio (t)
The general average allocation ratio is the ratio (%) between the general average value and the value subject to general average allocation (Gb).
We have: t = Gt *100 / Gb
In which the value subject to general average allocation (Gb) is the value of all
the interest present on board the vessel immediately before the general average act occurred.
Formula to determine Gb:
Gb =
Value of ship, cargo
-
The value of the individual loss occurred
when there is no general average
Or:
Gb = Value of ship, cargo - Loss value - Particular loss value
When you arrive
wharf
common
occurring after loss
shared
Step 3 : Determine the amount of each party's general loss contribution.
Recipe :
Amount of contribution
Allocated value
=
Loss distribution ratio
*
Common loss on each side Common loss on each side Common loss
In which the value subject to general average allocation of each party is determined similarly to the formula in step 2, but only these values are determined separately for each shipowner or cargo owner's interests.
Since the general average value is allocated in proportion to the interests of each party, after allocating the general average, the total amount of general average contributions of the shipowner and cargo owner is exactly equal to the general average value.
3. Insurance contract
3.1 Definition and nature of insurance contract
* Definition: An insurance contract is a document in which the insurer commits to indemnify the insured for losses and damages to the insured caused by insured risks, and the insured commits to pay the insurance premium.
Nature: An insurance contract is a contract of indemnity and a contract of trust.
Compensation is expressed in the commitment in the contract.
Credibility is shown in:
+ Must have insurance benefits to sign insurance contract. Benefits
Not required when entering into a contract but required when a loss occurs.
+ The insured must notify the insurer of all details of the goods and any changes in risks that he knows about.
+ When signing an insurance contract, if the goods have been damaged and the insured person knows, the insurance contract will be invalid. On the contrary, if the insured person
If the insured person does not know, the insurance contract is still valid and compensation is still paid.
An insurance contract is deemed to be concluded when the insurer accepts it in writing. That document is the insurance policy or insurance certificate.
3.2 Types of insurance contracts.
There are two types of insurance contracts: voyage insurance contracts and life insurance contracts.
insurance
Voyage policy: A voyage policy is an insurance contract for a shipment from one place to another stated on the insurance contract. The insurer's liability under a voyage policy begins and ends under the "warehouse to warehouse" clause.
A voyage insurance contract is presented in the form of an insurance policy or insurance certificate issued by the insurer. The insurance policy is a complete voyage insurance contract. The content consists of two parts: the front and the back of the insurance policy. The front usually contains details about the goods, ship, and itinerary. The back usually contains the insurance regulations or rules of the insurance company.
The main contents of the Insurance Contract include:
- Name and address of the insurer and the insured.
- Goods name, quantity, weight, bill of lading number, contract number.
- Ship name, departure date.
- Departure port, arrival port, transit port.
- Insurance value, insurance amount.
- Insurance conditions (clearly state which rules, of which country).
- Insurance rate, insurance premium.
- Place and method of compensation.
- Date, signature of the Insurance Company.
The second side is pre-printed with the Insurance Rules and Regulations of the relevant Insurance Company. The Insurance Certificate only has the same content as the first side of the insurance application.
Comprehensive insurance contract.
A blanket insurance contract is an insurance contract in which the insurer accepts insurance for a volume of goods transported in many consecutive trips within a certain period of time (usually one year) or accepts insurance for a certain quantity of goods transported (regardless of time).
The content of the insurance contract includes the most general and principled issues such as: general principles, scope of responsibility, packaging, type of means of transport, insurance value and insurance amount, insurance premium and insurance premium payment, appraisal, claims, contract validity, dispute settlement...
The Insurance Contract must have the following three basic conditions:
- Conditions for rating the vessel hired to transport insured goods.
The ship must be of normal seaworthiness and of low age (under 15 years old).
- Conditions on insurance value: The insured must declare the value of goods for each shipment in terms of number of packages, CIF or FOB price, sales contract number, letter of credit number, bill of lading number...
- Condition on good faith relationship: This means that once the insurance has been purchased from an insurer, during that time the insurer cannot purchase insurance for the goods from another insurance company.
After issuing an insurance policy or insurance contract, if the insured finds it necessary to supplement or amend certain provisions and the insurer agrees, the insurer will issue a supplementary insurance certificate. This certificate is also valid as an insurance policy and is an attached and inseparable part of the original insurance policy (or insurance contract).
In addition, the insurance policy can be transferred from the person named in the policy to another person who is entitled to the benefits of the policy. The insured person only needs to sign the policy and return the policy and other related documents to the assignee.
4. Insurance conditions
Insurance conditions are the provisions that specify the scope of liability of the insurer for loss of goods. Goods insured under which conditions, only the risks of loss specified in those conditions will be compensated by the insurance.
Currently, the most widely used insurance conditions in international trade are the insurance conditions drafted by the Institute of London Underwriters (ILU).
On January 1, 1963, ILU drafted and published 4 cargo insurance conditions (ICC-1963): All Risks cargo insurance condition (AR); Particular Average cargo insurance condition (WA); Particular Average Free cargo insurance condition (FPA); and an accompanying cargo insurance condition which is the strike, riot and civil commotion insurance condition.
After a period of application, ICC-1963 has shown some shortcomings requiring innovation. On January 1, 1982, ILU published a number of new insurance conditions (ICC-1982) to replace the old insurance conditions (ICC-1963). ICC-1982 includes 3 main insurance conditions: insurance condition A (ICC-A); insurance condition B (ICC-B); insurance condition C (ICC-C) and two accompanying insurance conditions: IWC war insurance conditions and ISC strike insurance conditions. Compared to ICC-1963, ICC-1982 is presented more clearly, more easily understood and overcomes ambiguity in language.
In our country today, most non-life insurance companies use ICC -1982 to build general rules on insurance of import and export goods transported by sea for themselves. Vietnam Insurance Corporation (Bao Viet) issued "General rules on insurance of import and export goods transported by sea" - (QTCB - 1998) to replace QTC 1995
* Insurance Condition C (ICC C)
The risks covered under this condition include:
- Loss or damage to insured goods due to reasonable cause of fire, explosion, ship running aground, sinking, capsizing, collision, unloading at a port of refuge.
- General loss.
- The liability that the insured must bear under the clause of the two ships colliding is at fault.
Excluded risks include:
- Loss or damage caused by the insured's malicious or intentional act
- Leakage, ordinary loss in weight, volume or natural wear and tear of the insured object,
- Due to internal defects or the nature of the goods.
- Loss or damage due to inadequate packaging,
fit.
- Loss or damage directly caused by delay.
- Loss or damage due to insolvency or financial default of shipowners, managers, charterers or insurers.
- Loss or damage resulting from the use of any weapon of war
Which pictures use nuclear reactions, chemical reactions, radioactive substances...
- Intentional damage or intentional destruction of the insured object due to illegal acts of any person.
- Loss caused by war, civil war, riot, hostile act
confiscation, arrest…
- Losses caused by mines, torpedoes, bombs and other weapons of war.
- Losses caused by strikes, riots…
- Losses caused by political violence, political motives
* Insurance Condition B (ICC B)
Under this condition, in addition to the insured risks and excluded risks above, the insurer also compensates for loss or damage to the insured goods caused by earthquake, volcano, lightning, being swept away by water, sea water, water
River intrusion into the hold or cargo hold, loss of entire package due to falling
off the ship or during loading or unloading.
* Insurance Condition A (ICC A)
- This is the broadest insurance condition, covering all damage and loss of goods, except for risks excluded by regulations.
* War insurance conditions.
Under this insurance condition, the insurer must indemnify for
loss or damage of goods due to:
- Civil war, revolution, rebellion, insurrection or conflict
politics arises from incidents or any hostile action.
- Seize, capture, restrain or detain.
- Mines, torpedoes, bombs or other weapons of war.
- General average and salvage costs.
* Strike insurance conditions
Under this insurance condition, only loss and damage are covered.
of the insured goods due to:
- Strikers, locked-out workers or participants
labor disturbance, riot or insurrection.
- Acts of terrorism or for political purposes.
- General average and salvage costs
The insurer only covers losses caused directly by the strikers' actions and is not liable for damages resulting from the strike.
5. Loss assessment and compensation settlement
5.1. Loss assessment
Loss assessment is the work of the insurer's assessors or the assessment company authorized by the insurer, to determine the extent and cause of the loss as the basis for compensation.
Loss assessment is conducted when goods are damaged, broken, missing, degraded, rotten... at the port of destination or along the way as requested by the insured.
After the appraisal, the appraiser will issue an appraisal certificate, which includes two types: Appraisal report and appraisal certificate.
Compared with the certificate of appraisal, the appraisal report is a more complete document, including both Vietnamese and English.
The survey report is an important document in claiming compensation, so when the goods arrive at the port of destination, a survey must be requested immediately (no later than 60 days from the date the goods are unloaded from the ship). The survey agency must be the agency specified in the insurance contract or an agency authorized by the insurer.
5.2. Compensation settlement:
+ Compensation for losses must comply with the following principles:
- First principle: The insurance amount is the maximum limit of the insurer's compensation amount. However, the following amounts (in addition to the loss amount) are also compensated: costs spent to salvage the goods, salvage costs, appraisal costs, auction costs of damaged goods, and general average contributions even if the total compensation amount exceeds the insurance amount.
- Second principle: Compensation in cash, not in kind. Normally, insurance premiums paid in the same currency will be compensated in the same currency.
- Third principle: When paying compensation, the insurer will deduct
amounts recovered by the insured from third parties.
+ How to calculate compensation for losses.