Basenton International Cargo Insurance
1. The meaning of insurance
It means that the insured pays a certain insurance premium to the insurer and insures certain risks. After the insurer underwrites the insurance, the insured object will be given financial compensation for the loss within the scope of insurance.
2. Insurance related parties
1. Insured person: a person who has concluded an insurance contract with the insurer and has the obligation to pay insurance premiums
2. The insured: refers to the person who has the right to claim insurance money after an insured event occurs according to the insurance contract.
3. The insurer (also called the underwriter) refers to an insurance company that has concluded an insurance contract with the insured and is liable for compensation or payment of insurance money.
4. Insurance agents, insurance intermediaries, insurance brokers.
3. Insurance principles
(1) Principle of insurable interest:
1. Definition: Refers to the economic benefits recognized by the law and insured by the insured or the insured for the insured subject’s interest.
2. Features of insurable interest
Insurable interests must be legitimate interests
Insurable benefits must be economic benefits that can be calculated in currency
Insurable benefits must be definite benefits
3. Application of insurable interests in international trade
Standards for the division of insurable interests between the buyer and the seller
(1) EXW: The seller places the goods under the control of the buyer at the designated place within the date or period specified in the contract, and the risk is transferred immediately, and the insurable interest in the goods is also transferred to the buyer at this time
(2) Group D terms
The seller places the goods under the buyer’s control on the ship at the destination port, the dock at the destination port, the border or the agreed place at the designated destination within the specified date or period, and the risk is transferred. The previous risk is borne by the seller, so the seller enjoys an insurable interest in the goods; after the goods are placed under the buyer’s control, the risk is immediately transferred to the buyer, so the buyer has an insurable interest in the goods.
The risk that the buyer is responsible for starts from the effective delivery of the goods to the side of the ship, and the buyer enjoys an insurable interest in the goods at this time.
(4) FOB and CFR
The seller shall bear the risks before the goods cross the ship’s rail at the port of shipment, which shall be borne by the seller and has an insurable interest in the goods, and the seller shall apply for insurance by himself. Therefore, after the goods have passed the ship’s rail at the port of shipment, the risk is transferred to the buyer, and the insurable interest in the goods is also transferred to the buyer.
The seller insures marine cargo insurance in his own name. When the goods pass the ship’s rail, the seller transfers the rights of the insurance policy to the buyer by way of endorsement. Therefore, the seller enjoys the insured benefits for this period of time before the goods cross the ship’s rail. After crossing the ship’s rail, the buyer enjoys insurable benefits with the insurance policy assigned by endorsement.