Marine Cargo Claims Adjustments An Overview Welcome Namaste

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Marine Cargo Claims & Adjustments An Overview Welcome & Namaste Delegates to Pyongyang International

Marine Cargo Claims & Adjustments An Overview Welcome & Namaste Delegates to Pyongyang International Insurance Seminar - 2010 Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director) J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Presentation Objectives 1. Brief overview of the evolution of marine cargo Insurance 2. Brief

Presentation Objectives 1. Brief overview of the evolution of marine cargo Insurance 2. Brief discussion on salient features of marine cargo insurance cover 3. Marine cargo covers available and comparisons. 4. Marine Cargo claim processing and settlement. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)2 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Presentation Plan 1. Introduction to Cargo Insurance. 2. Marine Cargo Insurance covers. 3. Claims

Presentation Plan 1. Introduction to Cargo Insurance. 2. Marine Cargo Insurance covers. 3. Claims settlement – documentation. 4. Claims processing & settlement. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)3 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Classification of Marine Insurance Policies Liabilities Under common Law Under Admiralty Law Under Statutory

Classification of Marine Insurance Policies Liabilities Under common Law Under Admiralty Law Under Statutory Law Under various Contracts • Collision • Salvage • Carriage by Sea • Contact etc • General Average • Pollution etc • Agency etc Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)4 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Classification of Marine Insurance Policies Marine Policies Hull & Machinery Marine Cargo Other Marine

Classification of Marine Insurance Policies Marine Policies Hull & Machinery Marine Cargo Other Marine policies • Freight • Disbursement • Stevedores Marine Liabilities Wreck Removal • P&I • Charterers Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)5 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Cargo Insurance Policies Types of Cargo policies “All Risks” • Institute Cargo Clause “A”

Cargo Insurance Policies Types of Cargo policies “All Risks” • Institute Cargo Clause “A” “Named Perils” • Institute Cargo Clause “B” & “C” • Institute Trade Clauses Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)6 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Comparison – Marine Cargo Clauses – A, B & C Risks Covered Clause A

Comparison – Marine Cargo Clauses – A, B & C Risks Covered Clause A B C 01 Fire / Explosion √ √ √ 02 Stranding / Sinking √ √ √ 03 Barrantry / Jettison √ √ √ 04 Collision √ √ √ 05 Theft / Pilferage / Non-delivery √ X X 06 Shortage √ X X 07 Contamination / Heavy weather √ X X 08 Spontaneous combustion (self heating) X X X 09 War / Strikes / Civil instability √ X X 10 Terrorism / Piracy X X X 11 G. A. Sacrifice √ √ √ Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)7 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Comparison – Marine Cargo Clauses – A, B & C Risks Covered Clause A

Comparison – Marine Cargo Clauses – A, B & C Risks Covered Clause A B C 12 Earthquake / Volcanic eruptions / Lightning √ √ X 13 LOB (Sling-loss) / Washing overboard √ √ X 14 Discharge in Port of refuge / Distress √ √ √ Note: Under cover “A” – All risks, except exclusions (caused by or arising out of) Rough handling (Bursting of bags, Breakage, 01 Leakage, Sweat / Condensation, Rain water, Improper stowage, Contamination (Taint damage) √ X X Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)8 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Other Industry specific clauses: • • • Institute Strikes clauses (Cargo) Institute War clauses

Other Industry specific clauses: • • • Institute Strikes clauses (Cargo) Institute War clauses (Cargo) Institute Classification clause Timber Trade Federation clause Bulk oil FOSFA Clauses Rejection Cover with limited availability (expensive) cover provided on the basis that goods are provided, prepared and supplied in accordance with current government regulations of the country of import Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)9 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Standard Exclusions: • • • Delay Inherent Vice / Nature Insufficiency & unsuitability of

Standard Exclusions: • • • Delay Inherent Vice / Nature Insufficiency & unsuitability of Packing Ordinary leakage / Loss of weight/volume during transit Wilful Misconduct / Fraud Insolvency / Financial default Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)10 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Exclusions: Clause 4. 1: Wilful misconduct Clause 4. 2: Ordinary leakage, loss in weight

Exclusions: Clause 4. 1: Wilful misconduct Clause 4. 2: Ordinary leakage, loss in weight / volume Clause 4. 3: Insufficiency / Unsuitability of packing, ordinary wear and tear Clause 4. 4: Inherent vice or nature of subject matter Clause 4. 5: Delay, even if caused by an insured peril Clause 4. 6: Insolvency / financial default Clause 4. 7/4. 8: Weapon of war using atomic or nuclear fission/fusion radioactive force or matter (4. 7 in “A”, 4. 8 in “B” & “C”) Clause 4. 7: (in “B” & “C”) Deliberate damage to or deliberate destruction of subject matter. Clause 5. 0: Un-seaworthiness / Un-fitness of vessel, Conveyance, Container Clause 6. 0: War risks Clause 7. 0: Strikes, Lockouts, Civil commotion Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)11 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Risks: – Loss − Total − Constructive Total • Abandonment • Arranged / Compromised

Risks: – Loss − Total − Constructive Total • Abandonment • Arranged / Compromised − Partial Loss • What proportions loss is partial loss • Deductibles Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)12 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Risks: (contd. ) Perils of the Sea − Stranding / Sinking / Collision /

Risks: (contd. ) Perils of the Sea − Stranding / Sinking / Collision / Heavy weather / Theft / Jettison / Barrantry Extraneous Risks − Non-delivery / Sweat / Spontaneous combustion(Self heating) Political − War − Strikes / Civil commotion − Terrorism / Piracy Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)13 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Risks: (contd. ) Fundamental characteristics of Marine Insurance contracts Marine Insurance Act, 1906 •

Risks: (contd. ) Fundamental characteristics of Marine Insurance contracts Marine Insurance Act, 1906 • Utmost good faith • Insurable interest • Proximate cause • Mitigation • Principle of Indemnity Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)14 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Cargo Common areas of Cargo claims • Loss of Cargo • Shortage of Cargo

Cargo Common areas of Cargo claims • Loss of Cargo • Shortage of Cargo • Damage of Cargo − Wetting − Fire − Breakage − Contamination Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)15 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

All Risks Assured has the burden of proving that some fortuitous loss or damage

All Risks Assured has the burden of proving that some fortuitous loss or damage has occurred during the time the policy was in effect. He does not have to show the exact cause of loss. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)16 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Edifice of a Cargo Insurance Policy • Proximate cause, Insured perils, Warranties, deductibles etc.

Edifice of a Cargo Insurance Policy • Proximate cause, Insured perils, Warranties, deductibles etc. • Principle of Indemnity • Principle of utmost good faith • Insurable Interest Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)17 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Loss Control / Loss Minimisation • • • Vessel selection Age Flag Type Class

Loss Control / Loss Minimisation • • • Vessel selection Age Flag Type Class / Management Cargo • • • Operations Type of Cargo Packing Method of loading / discharging Port Peculiarities Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)18 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Sue and Labour Expenses Fundamentally Sue & Labour expenses are expenses incurred to minimise

Sue and Labour Expenses Fundamentally Sue & Labour expenses are expenses incurred to minimise the loss. This provision or cover exists in H&M Insurance also. These include reconstitution charges, Legal expenses for recovery, Salvage charges, disposal of Salvage etc. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)19 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Cargo Claim Processing Documents • Insurance policy • Bill of Lading • Invoice &

Cargo Claim Processing Documents • Insurance policy • Bill of Lading • Invoice & Packing List • Survey Report – Joint Survey (if required) • Loss intimation Survey report contains among other things • • • The nature of loss or damage Possible cause of loss or damage When & where loss occurred Extent of loss or damage Delays attributed to the insured Whether Insured has preserved the Rights of Recoveries against carriers or Bailees (Port / warehouse authorities) Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)20 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Cargo Claim Processing • Whether the loss or damage occurred within the period of

Cargo Claim Processing • Whether the loss or damage occurred within the period of Insurance • Whether warranties complied with: • Under deck stowage • Packing • Loading / Discharge supervision by Surveyors • Delay in delivery Notes: Warranties are inserted in the Policy to minimise the risk of loss. Breach can lead to rejection of claim. In practice, Insurers may waive a breach of warranty if such breach is not a contributory factor to the loss. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)21 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Additional documents as required: • Certificate of “Non-delivery” or “Short-delivery”. • Note of protest

Additional documents as required: • Certificate of “Non-delivery” or “Short-delivery”. • Note of protest with casualty details in case ship suffered casualty (Heavy weather, Fire, Grounding, Collision etc) • “Landing” certificate of the Port / Inward receipt of warehouse • LOB (Loss overboard) Certificate for sling loss. Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)22 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

Thank you Delegates Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)23 J.

Thank you Delegates Marine Cargo Claims & Adjustments© by Capt. Satish Bhandary (Director)23 J. B. Boda Surveyors Pvt. Ltd. Mumbai (India)

WELCOME TO NEPAL NAMASTE DIDI NAMASTE BAHINI NAMASTEWELCOME TO NEPAL NAMASTE DIDI NAMASTE BAHINI NAMASTE
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Informal Claims And Inferred Claims Informal claims andInformal Claims And Inferred Claims Informal claims and
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Claims and Response to Claims Meaning of ClaimsClaims and Response to Claims Meaning of Claims
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MARINE CLAIMS Presentation by CLAIMS DEFINITION A demandMARINE CLAIMS Presentation by CLAIMS DEFINITION A demand
TEMPORARY ADJUSTMENTS setting up the instrument TEMPORARY ADJUSTMENTSTEMPORARY ADJUSTMENTS setting up the instrument TEMPORARY ADJUSTMENTS
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CARGO STOWAGE PLAN The Management of General CargoCARGO STOWAGE PLAN The Management of General Cargo
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