Chapter 9   Insurance

Section 1  Introduction
Section 2  Specimen letters
Section 3  Useful Expressions (Self study after class)
Section 4  Guide to Writing
Section 5  Exercises

Section 1  Introduction

China Insurance Clauses (CIC)

3 basic areas of coverage (3个基本险)：Free from Particular Average (FPA, 平安险) ，With Particular Average (WPA, 水渍险), and All Risks (AR, 一切险).

Additional risks (附加险)：Theft, Pilferage and Non-delivery (TPND), Fresh Water or Rain Damage ，Shortage Risk, Intermixture & Contamination Risks, Risk of Leakage, Clash & Breakage Risks, Risk of Taint or Odour, Sweating & Heating Damage, Hook Damage, Risk of Rust, Loss or Damage by Breakage of Packing, Strikes, Riots, Civil Commotions (SRCC), War Risk, Import Duty Risk, On Deck Risk, and Failure to Delivery Risk

Section 2  Specimen Documents

    Specimen 1: A reply concerning terms of insurance

With reference to …, we wish to say that for transactions concluded on a CIF basis, our usual practice is to cover All Risks and War Risk for the invoice value plus 10% in the absence of definite instructions from buyers. If you wish to cover additional risks, we will do so on your behalf, but this will involve extra premiums (保险费) to your account (由你方支付).

You may rest assured (放心) that the People’s Insurance Company of China is always prompt and equitable (公平的) in settling claims (理赔). However, you must take delivery (收货) of the goods in good time upon their arrival at the destination. If the insured goods are found to have sustained loss or damage, you should immediately apply for a survey (检查) as stipulated in the insurance policy in order to avoid subsequent (随后的) trouble.

We hope our message is helpful to you and look forward to your continuing custom (光顾).

    Specimen 2: Asking the seller to effect insurance

Please refer to our Order No. 200705 for 1000 bicycles, which is placed on a CFR basis. Now we would like to have the shipment insured at your end (在你处). Could you please arrange to have the goods insured on our behalf (代表我方) against All Risks for 120% of the invoice value, i.e. USD 6000? To settle the premium (保险费), you can choose to issue a debit note (索款通知) to our account or draw a sight draft on us.

We sincerely hope our request will meet with your approval (批准).

  Specimen 3: A possible reply to the above specimen

Further to your request for us to effect insurance on your behalf for the above order, we have covered the shipment against All Risks for USD 6000 with the People’s Insurance Company of China. The Policy (保险单) is being prepared accordingly and will be mailed to you today, together with our debit note (索款通知) for the premium and expenses.

We are making arrangements to ship the order by S.S. (steam ship) “Red Star”, sailing on or about 20 October.

Specimen 4: Advice of insurance arrangement

Thank you for your letter of May 20 asking us to cover (投保) the consignment of 100 cases of high-quality leather goods from Xingang, China to Singapore.

 

The premium for this cover is at the rate (保率) of 0.5% of the declared value of HK$35,000. The policy (保险单) is being prepared and will be mailed to you in a day or two.

Specimen 5: Asking the exporter (a foreign firm) for insurance claim arrangements

We enclose the surveyor’s report and shipping agent’s statement for you to approach the insurer (承保人, 保险公司) for our claim.

When the S.S. “Princess” arrived at Qingdao, China on 10 May, one side of case No.8 was found to have split. We therefore had the case opened and the contents examined by a local insurance surveyor in the presence of the shipping company’s agent. The case was invoiced (发票描述) as containing 120 electric toys, fifty of which were badly damaged.

As our order was placed on a CIF basis and you covered the insurance, we would be grateful if you could file (提出) the claim for us with the insurer.

We sincerely hope that no difficulty will arise concerning the insurance claim.

Section 3  Useful Expressions

Please insure the following goods for us against All Risks and War Risk for the full invoice value plus 10% based on warehouse to warehouse clause as per China Insurance Clauses of 1 January, 1981.

Insurance is to be effected by the seller at 110% of the invoice value covering WPA and War Risk as per Institute Cargo Clauses.

An insurance claim should be submitted to the insurance company or its agent as promptly as possible to provide the latter with ample time to pursue recovery from the relevant party at fault.

Should any damage be incurred, you may, within 30 days after the arrival of the consignment at the port of destination, approach the insurance agent at your end and file your claim with them supported by a survey report.

In case any damage to the goods occurs, a claim may be filed with the insurance agent at your end, who will undertake to compensate you for the loss sustained.