Frequently Asked Questions
What is meant by " The Normal ( or Ordinary) Course of Transit? "
The "ordinary course of transit" is the normal period of transit from the seller's warehouse to the buyer's warehouse, including such necessary stops as: -
- awaiting arrival of carrying vessel at port of departure.
- awaiting customs inspection at port warehouse.
Any prolongation of the transit by the Insured's own choice takes the goods out of the ordinary course of transit. Thus if he chooses to prolong the stay in Customs because of shortage of funds to pay duty.
When does cover attach and end under the Institute Clauses (A)
Under the transit clause cover will attach from the time the goods leave the premises of the shipper for the commencement of transit and continues during the ordinary course of transit until delivered at destination or to a place of storage outside the ordinary course of transit prior to the destination or on expiry of 60 days following discharge from the vessel or 30 days from discharge for aircraft.
Is loading and unloading covered under the Clauses?
Not necessarily. It very much depends upon the circumstances of the loading and unloading. However, cover for the loading and unloading period is given a standard in the NUI Cargo Policy.
What is General Average?
There is a General Average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common marine adventure.
The following are General Average essentials:
- The whole adventure must be in peril
- The peril must be factual and imminent
- The act must be intentional and voluntary
- The act must be reasonable and prudent
- The act must be for the purpose of preserving the whole of the interests in the adventure from total loss
- The sacrifice or expenditure must be extraordinary in nature
- Only losses directly consequential on the act are general average
What do Strikes Clauses Cover?
- The Institute Strikes Clauses provide cover for physical loss or damage to the goods caused by persons taking part in strikes, riots, civil commotion and terrorism. These risks are not covered by any other Institute Clauses.
- Coverage is limited to physical loss or damage to the goods directly caused by the strikers etc.
There is no cover for a loss arising indirectly from the strikers' actions, e.g. fall in value of the goods or a loss of market due to delays caused by the strike or expenses. Such as additional warehousing costs or forwarding expenses.
What is meant by " FCL "?
When goods are shipped in containers they are either described as a full container load (FCL) or a less than container load (LCL). The FCL implies a complete load for one shipper whereas an LCL is the term used to describe several different consignments belonging to a number of shippers consolidated in one container.
An FCL can be delivered to a shipper's premises and loaded by in-house staff and if the contents are intended for one buyer then door to door transportation is possible. However, if the exporter decides to use an outside freight forwarder or individual consignments in the container are destined for different consignees, then some conventional handling is inevitable. All LCLs begin and end their journeys by conventional means as the goods must be delivered to a groupage depot for packing into the container and collected from a similar location at the destination. The packing and unpacking of containers is usually termed stuffing and unstuffing.
What is excluded from ICC (A,) (B) and (C)?
- Wilful misconduct of the Insured
- Ordinary leakage, loss in weight or volume, wear and tear
- Insufficiency or unsuitability of packing
- Inherent Vice
- Delay
- Insolvency/financial default of the vessels owners, managers, operators etc.
- Deliberate damage (not excluded in 'A' clauses)
- Nuclear weapons
- Unseaworthiness of any vessel craft etc if the Assured is aware of such unseaworthiness
- War Risks*
- Strikes Risks*
* Cover is provided under the Institute War clauses and Institute Strikes Clauses
What are INCOTERMS?
These terms of sale are compiled and published by the International Chamber of Commerce. There are 13 sets of " ready made " terms to suite a variety of circumstances. The parties to the International sale of goods can choose the most appropriate Incoterms for a particular contract. The terms set out the responsibilities and actions required from each party in regard to the movement of goods.
Some INCOTERMS :-
- Ex Works - The buyer has all the risk from the sellers premises and this usually includes from the time of commencement of loading onto the lorry. He must arrange the insurance and buys at the basic invoice cost. i.e. cost of production and manufacturers profit alone.
- FOB Free on Board - Under this term of sale the seller has agreed to deliver the goods over the ship's rail. This is the point when responsibility moves from the seller to the buyer.
- CIF Cost Insurance and Freight - The seller is responsible for arranging the delivery of the goods and insurance cover to the destination agreed in the contract or until arrival onto the quay at the discharging port. The freight and the Insurance premium is paid by the seller who passes these costs on to the buyer. The risk in the goods transfers to the seller at the time of loading onto the vessel.
- CFR Cost and Freight - The seller is responsible for loading the goods over the ship's rail. They then become the buyer's responsibility who must arrange freight and insurance. As a result goods sold FOB will be cheaper than those sold CIF (see below.)
" How easy is it to arrange cargo insurance "?
Very easy no proposal form is required just speak to one of our team who will guide you through the process.
Do we need to record every single shipment in detail?
No under an Annual policy we simply require the total value of goods insured under the policy during the 12 month period.
My customers overseas want us to produce a Certificate of insurance for every shipment is this normal?
When selling CIF or against a letter of credit it is usual for Certificates to be issued. This is not difficult and blank certificates are provided by us and can be competed by the insured or their freight forwarder at the same time as issuing other documents.
Why should an importer bother with arranging insurance in the U.K. when he can get the supplier overseas to do it?
It's probably cheaper plus economies can be obtained by insuring all imports and exports under one policy with NUI Marine rather than numerous overseas insurers. A first class Claims service is local with helpful support and advise freely available to customers on risk control etc. The Policy will be in English, with the security of the largest UK Insurer.