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Marine Cargo Insurance Coverage

Scope of Basenton Marine Cargo Insurance Coverage

Scope of Basenton Marine Cargo Insurance Coverage

The risks covered by the insurer
(1) Perils of the Sea
Generally, it refers to the risks arising from the ship’s voyage at sea and/or the risks arising from the goods that are transported by sea.
1. Natural disasters refer to disasters caused by the forces of nature.
2. Accidents

(2) External risks
1. General external risks
2. Special external risks
Risks and losses due to national policies, laws, wars, strikes, etc.
The loss covered by the insurer
Average loss: the loss of the insured goods due to marine risks and external risks during the shipping process.
According to the degree of loss of the goods, the average loss is divided into: actual total loss, total loss (Total Loss)
Constructive Total Loss, General Average, Partial Loss, Individual Average
(1) Total Loss
referred to as “total loss”
It refers to the total loss or deemed total loss of the entire batch of goods in transit due to the insured risk.

Total loss is further divided into actual total loss and constructive total loss.

1. Actual Total Loss (ATL)
Also called absolute total loss. Article 245 of China’s “Maritime Law” stipulates: “The insured object is lost after an insured event occurs, or is severely damaged and completely loses its original shape and function, or can no longer be owned by the insured, it is an actual total loss.”
The actual total loss can be divided into 4 situations:
All insured objects are lost
Loss of original use or value of the subject-matter insured
The insured loses title to the subject matter insured, irretrievably
The ship is missing for a certain period of time

2. Constructive Total Loss (CTL)
It refers to a state or degree in which the insured objects such as ships, goods and freight suffer partial losses in the event of an insured accident, but have not yet reached the actual total loss. Section 60(1) of the Marine Insurance Act 1906 states: “According to the express agreement of the insurance policy, the actual total loss of the subject-matter insured appears to be unavoidable, or in order to avoid the occurrence of the actual total loss, the cost of preserving the subject-matter will be When it exceeds its own value, it is a constructive total loss.” The constructive total loss can be divided into two situations:
① The actual total loss of the subject matter of insurance cannot be avoided
②In the case of serious damage to the subject matter insured
First, if the repair cost of the ship exceeds its repaired value, it constitutes a constructive total loss.
Second, if the goods are seriously damaged, and the repair costs and the continuing shipping costs are greater than the value of the goods themselves, it constitutes a constructive total loss.

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