Summary
Highlights
The speaker, Allan from ABTS Training Services, introduces the topic of marine insurance by referencing a recent incident where a Zim Line vessel experienced a fire and lost 40 containers overboard off the coast of British Columbia. This event raises questions about whether shippers had adequate insurance for their cargo.
Allan explains that there isn't a single 'Marine Insurance' policy but rather different levels of cover, similar to car insurance (e.g., fully comprehensive, third-party). He introduces Clause A, B, and C, with Clause A being the most comprehensive, covering 'all risks' with specific exceptions. Clause C offers minimal coverage.
Incoterms 2020, specifically CIP (Carriage and Insurance Paid To) and CIF (Cost, Insurance and Freight), dictate who is responsible for insuring the cargo and to what extent. Under CIP, the seller is obliged to provide Clause A insurance, while under CIF, only Clause C (minimum insurance) is required. This can significantly impact a shipper's coverage in an incident like the Zim Line one.
Allan discusses the concept of 'self-insuring,' which essentially means not insuring and taking a gamble. While some might assume they can sue the shipping line, contracts of carriage often include limited liability. Self-insuring can lead to significant losses, especially when dealing with incidents that are not covered by minimal insurance.
A crucial aspect of marine insurance is 'General Average.' This principle dictates that if cargo is deliberately sacrificed (jettisoned) to save the vessel or other cargo during a voyage, the owners of the saved cargo must contribute proportionally to cover the loss of the jettisoned cargo. If you are not insured, you could be liable for these contributions.
Allan advises shippers to always clarify the exact type of insurance they are getting (Clause A, B, or C) from their freight forwarder or insurance broker. He stresses the importance of not relying on 'rubbish insurance' and, even when self-insuring, to at least ensure coverage for General Average due to its potentially high costs.