1. When is the best time to arrange the insurance ,especially the P&I and H&M cover?
Generally, it is better to arrange the insurance a month before purchase or delivery of the ship. The first reason is that you can have sufficient time to bargain with the insurer and second, there will be more time left for a condition survey and its report to be issued if a survey is required by the insurer. What’s more, it will take some time to prepare the insurance certificate and blue card, as well as applying for a BCC.
2. Important information for P&I Insurance inquiry.
Ship's Name / Shipowners details / Shipmanager’s details / Bareboat Charterer details(if any) / Type / Flag / Class / Built Year / Built place / GRT / IMO No. / Crew Number / Crew Notionality / Cargo usually carried / Trading Area / Loss record of fleet for last 3-5 years / Details for former insurer
3. Important information for H&M Insurance inquiry.
Ship's Name / Shipowners details / Shipmanagers details / Bareboat Charterer details(if any) / Type / Flag / Class / Built Year / Built place / GRT / IMO No. / Crew Number / Crew Nationality / Cargo usually carried / Trading Area / Loss record of fleet for last 3-5 years / Details for former insurer / Hull value / Insured value
4. P&I insurance liability.
1）Injury， Illness and Death of Seamen;
2）Injury， Illness and Death of Persons other than Seamen;
3）Repatriation and Substitute Expenses;
4）Loss or Damage to Personal Effects;
5）Shipwreck Unemployment Indemnity;
6）Liability arising under Certain Indemnities and Contracts;
8）Loss or Damage to Property;
10）Stowaways and Refugees;
17）Property on the entered Ship;
18）Unrecoverable General Average Contributions;
19）Ship’s Proportion of General Average;
21）Special Compensation to salvors;
23）Expenses incidental to the Operation of ships;
24）Sue and Labor and Legal Costs;
25）Expenses incurred by direction of the Association;
5. Some important concepts of P&I insurance (IG club)
1）Policy year and Closed policy year
- From Noon GMT 20th February of a certain year until Noon GMT 20th February next year.
- The board close account, Catastrophe notice
- To calculate according to the The International Maritime Claim Liability Limitation Clause 1976
- This is for emergency and catastrophe claims
4）Tonnage and Entered tonnage
- Refers to the tonnage stated on the Certificate of Registry
- For calculation of the estimate call
- Advance Call (calculated by vessel’s tonnage/age/type/technical condition/operating characteristics/risk/claim record, etc.)
- Supplementary Call/Additional Call (calculated by the claims of the club)
- Over-spill Call
- Releases Call (When terminate or cease or cancel the cover, Releases Call should be paid for the outstanding supplementary call and Catastrophe call.
*A General Increase, which was accounted according to the business condition of the club, will be place on rate at renewal. In addition, the club might give an additional increase based on the claim record.
6. List of 13 IG Clubs
1) American Steamship Owners Mutual Protection and Indemnity Association, Inc
2) The Britannia Steam Ship Insurance Association Limited
3) Gard P&I (Bermuda) Ltd
4) The London Steam Ship Owners’ Mutual Insurance Association Limited
5) The North of England P&I Association Limited
6) The Shipowners’ Mutual Protection & Indemnity Association (Luxembourg)
7) Assuranceforeningen SKULD
8) The Steamship Mutual Underwriting Association (Bermuda) Limited
9) The Standard Steamship Owners’ P&I Association (Bermuda) Limited
10) The Japan Ship Owners’ Mutual Protection & Indemnity Association
11) The Swedish club
12) United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited
13) West of England Insurance Services (Luxembourg) S.A.
7. The 13 major classification societies.
8. The main factors that affect the P&I estimated call/premium
Age of the vessel / class / cargo usually carried / management of the management company / claim record
9. The required information for applying BCC
2）Certificate of nationality
10. Condition survey
Generally, the insurer will require a condition survey for vessel over 10 years before inception. But the owners can provide a copy of the of the lated condition survey report and the insurer may waive the condition survey requirement if they consider the vessel in an acceptable condition or, the insurer will insist on the condition survey. If the vessel can not arrange the survey in time according to its schedule, some insurer will postpone the survey for a certain period of time but some will not because of the potential risks.
11. What should be prepared before a condition survey?
Generally, the following tests and inspections may be concerned by the insurer,
1) All cargo tanks / holds entered as available for internal inspection.
2) A minimum of 50% of the DB / TST (ballast tanks) are to be entered / inspected during the survey and all ballast tanks are to be hydrostatically pressure tested to prove watertight integrity.
3) Cargo hold bilge suctions (where fitted) to be tested and proven satisfactory.
4) Cargo hold flooding alarms (where fitted) to be tested and proven satisfactory.
5) Hatch cover operation to be tested and proven satisfactory.
6) Hatch cover tightness test of all hatch covers to be tested.
7) Oily Water Separator (OWS) to be tested and proven satisfactory (beware of pollution regulations!).
In order to pass the survey as soon as possible, the master should do some maintenance in advance and the crew should try help the surveyor for below items,
1) Please have all manholes open to all cargo and / or ballast tanks which are to be presented for inspection (beware of safety of opened manhole! ). Those tanks to be well ventilated and tested per enclosed spaces entry procedures, including all tank entry papers filled out.
2) Please prepare the rigging / lighting for hold inspection.
3) Please have cargo handling equipment records prepared for inspection.
4) Please prepare for demonstration of steering gear (normal and emergency).
5) Please prepare for demonstration of emergency generators, under working conditions.
6) Please prepare for demonstration of emergency fire pump, under working conditions.
7) Please prepare for demonstration of launching davits of lifeboat and rescue boat (if feasible and subject to port’s regulation).
8) Please prepare copies of class and statutory certificates.
9) Please prepare for demonstration that nautical publications and charts.
10)Please have engine maintenance records available for our consideration.
11)Please prepare for demonstration of bilge alarms, quick closing devices (if feasible), ventilator dampers (if feasible) and other similar devices, etc.
12. The importance of condition survey
The insurer will require a condition survey before inception and admit the vessel with acceptable risk assessment based on the survey report. The insured should arrange the condition survey in due time or the efficacy of the cover will be prejudiced. Defect warranty, which means that the excludes all claims arising out of or in connection with the outstanding defects, will be attached to the cover. So the owners should rectify all defects in time according to surveyor’s recommendation and the insurer will delete the warranty after the surveyor’s confirmation. Otherwise, the insurer will refuse to pay when a claim arises or even terminate the cover if they consider the vessel is in poor condition.
13. What kind of insurance should be buy when the vessel enter into war zone or Pirate Latitudes
War risks including annul war risks and breach war risks, K&R, Loss of Hire and Armed Gard can be arranged before vessel entering into breach war risks zone or pirate zone.
14. The cover scope of the K&R
B、Loss or missing or stolen
C、Consultant fee of the insurer
D、Extra charge of the applicants or insureds (limited by 3000000 or 5000000 or 8000000):
1）the expenses of the independent negotiator who employed by the applicants and authorized by the insurer
2）the expenses of the independent public relations consultant and interpreter.
3）the travel expenses of the applicants and the insurer.
4）the travel expenses of the beneficiary coming back home and sending a replacement.
5）the medical and psychotic treatment expenses within 36 months.
6）the information fee for the kidnap incident,
7）personal property losses
8）the wages and bonus of the insured and his relatives who assisting the negotiation of the release in the 60 days after the kidnap.
9）the basic wages and special but reasonable expenses for the employee working on this negotiation.
10）the interests on load (the loan raised for the expenses that can be paid by the insurer). The loan should be return 7 days after receiving the compensation.
11）the security expenses that suggested by the insurer of the beneficiary in the accident country.
12）the expenses of the communication equipment, record equipment and bulletin that in relation to this incident.
13）the rational expenses for the forensic person that employed by the insurer.
14）the rational recovering costs of the beneficiary, his spouse and children 18 months after release.
15）the plastic fee for the disfigure during the incidence of the beneficiary
16）the rational port charges in the unexpected port that the vessel have to berth at because of the incident after 21 days of the vessel being released.
17）the fuel consumption during the period of the kidnap.
18）the rational fees that the applicants paid for releasing of the vessel.
E、the compensation that the applicants paid for the victims of the kidnap on a sue.
15. The necessity of buying a breach war
Generally, war risks can be divided into annual war risks and breach war. The annual war risks means the loss of the vessel and owners liability(especially crew injuries) during the voyage out of the war risks zoon. At present, all the war risks zoon recognized by the insurers are based on the latest list issued by the JWC of LLOYDS. The breach war should be attached to the annul war risks a breach war should be brought on base of a breach war.
16. Important information for Cargo Insurance inquiry
The insured / name of the cargo / loading port / discharging port / amount of the cargo of the voyage or the year / unit price (on invoice) / information of the vessel (age, name, class, built year)
17. The main difference between the ICC and CIC of the Cargo Insurance Clause
A、ICC is short for INSTITUTE CARGO CLAUSES, which was draw up by the Lloyd's Market Association and is including ICC(A), ICC(B), ICC(C), war risks, strike risks, malicious damage clauses and so on. CIC is short for CHINA INSURANCE CLAUSE. It is the maritime cargo insurance clause of PICC and including Fpa, Wpa, all risks, war risks, strikes risks and on deck risks, etc.
B、 The scope of liability is different.
The liability scope of CIC Fpa, Wpa is wide than that of ICC(C) and ICC(B), while the liability of CIC all risks is smaller than ICC (A)’s. Because ICC(A) covers all except the certain risks but the risks of CIC all risks are listed and it will not cover the risks that are not listed in its clause.
C、 Applicable law for different law.
ICC is British clause which subject to the Anglo-American law system. CIC is Chinese clause which subject to Chinese law.
D、 The excluded liability is different.
ICC excluded the basic liability of the shipper such as unseaworthiness, uncargoworthiness, and unapplicable, etc. and there’s no total loss or partial loss. War risks and strike risks can be arranged separately. ICC(A) includes the liability of piracy but CIC will consider piracy as a part of War risks.
18. The conversion of FOB, CFR and CIF in cargo insurance and the computingmethod of the rate.
INSURED VALUE =CIF *(1+MARGIN OF INSURANCE）
RATE=BASIC RIKS RATE+ASSITIONAL RISKS RATE
BASIC RIKS includes: Fpa, Wpa, all risks
ASSITIONAL RISKS includes: war risks, strikes risks, etc.
PREMIUM=CIF *(1+MARGIN OF INSURANCE)*RATE
19. The different between the employer’s liability insurance and the group incident insurance.
A. The cover scope of the group accident insurance is: During the period of insurance, the insured died (within 180 days from the date of the accident), disabled, burned and scalded or treated in the hospital caused by suffering accident, the insurer should bear insurance liability according to the insurance contract.
B. The cover scope of employer’s liability insurance is: the insurance that employees of the insured, who engage in the work that relates to the business of the insured and is specified clearly in the insurance policy, and suffer from accident or the nation specified occupational disease that relates to work, resulting in injury, disability, death or occupation disease that relates to the business then the insurer will compensate within the specified compensation quota for the medical expenses, death compensation, medical bills, lost wages and lawsuit fee which shall be assumed by the insured according to the Labor Law and labor contract.
C、In the employer’s liability insurance and the liability of employment injury insurance, the insured is employer, but the insured in the group accident insurance is the employee. The object of the former is the compensation that employer should undertake for the employee and the object of the group accident insurance is the employee’s body and life.
D、In the employer’s liability insurance and the liability of employment injury insurance, the insurer should replace the insured(employer) responsible for part or total compensation. In the group accident insurance, the insurer should pay for the insured according to the clause, but the payment dose not alleviate or exempt the liability of the employer. By law, employee who got the insurance can still have the right to demand compensation from the employer in accordance with law or employment contract.
E、the insurance premiums of the employer’s liability insurance is more expensive than the group accident insurance because the former covers lost wages and lawsuit fee.
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