Export India Online Training Course - Just ₹4,999.00

Export Documentation and Procedure

  • Module 1: Chapter 1 - Understanding Incoterms 2020

    In this module, we cover: The Role of Incoterms 2020 in International Trade, Identifying the Buyer and Sellers Responsibilities Under Incoterms 2020, Choosing the Correct Incoterm 2020 For Your International Trade Transaction, Identifying the Eleven Incoterms 2020 Rules, Packing Implications Under Incoterms 2020

  • Module 1: Chapter 2 - Understanding Cargo Insurance Sea and Air

    In this module, we cover: Examination of Clause A, B and C (Sea Freight), Choosing the Correct Insurance Cover, Examination of Clause Air (Air Freight), Insurance Premiums, Examination of Insurance Certificate, Implications of Marine Insurance Under CIF CIP Incoterms 2020 Rules

  • Module 1: Document Library

    Document downloads included: Incoterms 2020 PDF Download, Insurance Certificate Example, Marine Insurance Certificate Example, Clause A, Clause B, Clause C, Clause Air

    • Lecture 1
  • Module 2: Chapter 1 - How To Import and Export From India

    In this module, we cover: How to import products into India and export products from India

    • Lecture 1
  • Module 3: Chapter 1 - Sea Freight Rates, Cost Centres Air & Sea

    In this module, we cover: Conference Line Rates, Independent Line Rates, Containerisation, Identifying Your Cost Centres From Sellers Warehouse to Buyers Warehouse via Sea and Air, The Role of the Freight Forwarder, Selecting Your Freight Forwarder

    • Lecture 1
  • Module 3: Chapter 2 - Carriage By Sea

    In this module, we cover: Liner Bills of Lading, The Characteristics of Liner Bills of Lading, The Characteristics of Seaway Bills of Lading, How Bills of Lading are Generated, Bill of Lading Instructions

    • Lecture 1
  • Module 3: Chapter 3 - Air Consolidation and Rates, Air Freight Documentation

    In this module, we cover: Master Air Waybill, Air Waybill Instructions, Issuing Flight Details, The Role of the Consolidator and Air Freight Rates, House Air Waybill

    • Lecture 1
  • Module 3: Document Library

    Document downloads included: Bill Of Lading Instructions, Bill Of Lading Example, House Air Waybill Example 1, House Air Waybill Example 2, House Air Waybill Example 3, Master Air Waybill

    • Lecture 1
  • Module 4: Chapter 1 - Methods of Payment in International Trade

    In this module, we cover: Cash against Documents, Documentary Letters of Credit, Why Trade Under a Letter of Credit?, Definition of a Letter of Credit, Types of Letters of Credit, Standby Letter of Credit, UCP 600 The Rules of the Game

    • Lecture 1
  • Module 4: Document Library

    Document downloads included: Letter of Credit Example, Cash Against Documents Example

    • Lecture 1
  • Module 5: Chapter 1 - Pre-Shipment Inspection & Market Research

    In this module, we cover: How Pre-Shipment Inspection Works, Clean Report of Findings, Who Will Buy Your Product?, Pricing My Product

    • Lecture 1
  • Module 5: Chapter 2 - Methods of Selling & Negotiation Skills

    In this module, we cover: Methods of Persuasion, Defining Objectives and Targets, Setting Your Negotiation Strategy, Negotiation Skills

    • Lecture 1
  • Module 5: Chapter 3 - International Sourcing

    In this module, we cover: Understanding the Five Key Ways of Sourcing Products or Services

    • Lecture 1
  • Final Exam
    • Lecture 1

Video Length: 27m 21s

The word marine insurance is often misunderstood. It is often thought that Marine Insurance covers your goods only when they are on the vessel at sea, hence the name MARINE insurance.

Not so!!

Marine insurance covers goods from the moment they leave the sellers warehouse until they arrive at the buyers warehouse. In other words, the cover is WAREHOUSE to WAREHOUSE, cover not just port of loading to port of discharge.

MULTI MODALITY

Marine insurance is “MULTI MODALITY” meaning it covers transport on many different forms of transport. Here is an example of MULTI MODALITY. A consignment leaves your warehouse in your country destined for a warehouse in another country. The main mode of transport is deep sea.

It starts its journey on a truck from your warehouse to the dock side; mode of transport TRUCK

It is loaded on the vessel and sails to the port of destination; mode of transport SEA

It is unloaded and loaded on a railway flat bed; mode of transport RAIL.

It is unloaded at the rail head and transferred to a river barge; mode of transport RIVER BARGE

If your goods are stolen or damaged as it transits on any of these modes of transport you can make a claim as your policy is multi-modality.

Like any form of insurance such as your house or car insurance, your cargo insurance has a termination date, a date your marine insurance ends. Quite simply, your marine insurance ends 60 days after the goods arrive at the port of FINAL destination. The importer (buyer) has 60 days to clear the consignment through customs at the port of final destination and arrange transport to final warehouse.

This 60 day clause is very important to remember if you are importing goods into a port where custom clearance takes a very long time or where the dock authorities cannot move the cargo off the dock side quickly due to lack of labour force or slow moving cranes. In this case, the seller under a CIF CIP contract would arrange for the 60 day clause to be changed to a 90 day clause or the amount of days needed. This change could result in a slight increase in the insurance premium.

Air freight insurance is very straight forward. You have only one cover: ALL RISKS. The EXEMPTIONS are similar to Marine Insurance but the DURATION clause states 30 days, unlike 60 days with marine insurance. Like marine insurance, air insurance has the same basic rules. It’s warehouse to warehouse cover, multi-modality.

Again if you think it will take longer than 30 days to clear customs and deliver to the warehouse of final destination arrange for the thirty days to be changed accordingly.

TIP: Do not say from warehouse NAME PLACE to warehouse NAMED PLACE in case the locations change, be very broad in your definition and say warehouse named country of export to warehouse named country of import. We have been looking at the commonality in Insurance for sea and air, now we are going to address insurance Sea and Insurance air in more detail.

CHOOSING THE CORRECT INSURANCE COVER

Let’s start off with the declaration, there is no such thing as “marine insurance cover”. You would not ask a car insurance broker to “INSURE MY CAR” but be much more specific. You would ask for fully comprehensive, third party or limited mileage insurance and the premium you pay would reflect the type of insurance you require.

Likewise with marine/air insurance you would ask for a particular cover and your premium would be in line with the cover requested.

So let us look at the different types of insurance cover for sea freight.

There are three types of insurance cover:

  • Institute cargo clause A
  • Institute cargo clause B
  • Institute cargo clause C (Minimum cover referred to in Incoterms 2020 CIF)

Please refer to the document library for Insurance clause A, B, C for sea freight and clause Air for air freight.

Clause A, B and C are broken down into three main sub headings:

  • RISKS COVERED
  • EXCLUSIONS
  • DURATION

In Clause A, risks covered are ALL RISKS, in other words, this is the best cover available because you are covered for ALL risks except those detailed under EXCLUSIONS .

In EXCLUSIONS clause 4.3 covers insufficiency or unsuitability of packing as we discussed in module one Incoterms 2020 and packing implications.

In DURATION clause 8.1.4 covers the 60 day rule.

EXCLUSION and DURATION clauses never change they are the same for all three clauses A B C.

The only changes to clause A, B and C are under RISK COVERED.

In clause B the specific risks covered are:

  • Fire or explosion
  • Vessel or craft being stranded grounded sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • Earthquake volcanic eruption or lightning
  • General average sacrifice
  • Jettison or washing overboard
  • Entry of sea lake or river water into vessel craft hold conveyance container or place or storage
  • Total loss of any package lost overboard or dropped whilst loading on to,or unloading from, vessel or craft.

The risks covered In clause C which is referred to in Incoterms 2020 under CIF CIP and usually called Minimum cover and are as follows:

  • Fire or explosion
  • Vessel or craft being stranded grounded, sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • Loss or damage to the subject matter insured caused by
  • General average sacrifice
  • Jettison

EXAMINATION OF CLAUSE AIR (AIR FREIGHT)

The risks covered under Clause (AIR) are all risks

EXCLUSIONS.Clause 3.3 covers insufficiency or unsuitability of packing

DURATION Clause 6.1.4 covers the 30 day rule

INSURANCE PREMIUMS

Lets us now discuss insurance premiums or how much you pay for your insurance premium.

Every premium is different and depends on the following factors:

  • Description of goods
  • Value of goods,
  • Packing specifications and if cargo is containerised
  • Country and port of export
  • Country and port of import
  • Possible name of shipping line

A combination of these factors determines the premium paid.

How do I insure my cargo?

The most practical way is to ask your freight forwarder to insure the cargo on your behalf. Most freight forwarders have their own in house master policy from which they can issue you with insurance for your needs.

The freight forwarder will use the value of your commercial invoice to your buyer and add ten per cent. They will then calculate their premium based on 110% of the value of the goods.

For example, your commercial invoice reads:

Total: £2759.00

The freight forwarder adds 10% or £275.90 to give a total of £3034.90.

The total of £3034.90 is the basis for their premium calculation

The reason why an extra 10% is added to the invoice value is that in theory the additional 10% would cover the loss of the buyers potential profit.

EXAMINATION OF INSURANCE CERTIFICATE

The freight forwarder will then issue you with an Insurance certificate. It is important that you receive an Insurance certificate as the buyer will require proof from you that you insured the cargo under CIF or CIP for the correct value and cover.

Remember you can insure a cargo under any term of delivery, for example you may be purchasing goods under EXW, FCA, CPT, DAP, DPU, DDP, FAS, FOB, CFR and you want to insure them at your own expense. Marine Insurance is never restricted just to CIF/CIP.

Please refer to your document library for copy of Marine Insurance Certificate (sea)

Insurance Cover

Which clause should I insure my goods under, Clause A, B or C?

The answer depends on several factors such as:

Have the goods a high valued?

Are they very desirable, i.e. prone to robbery for example, iPhones, iPads and laptop computers.

Are they being shipped from a port with a high risk of robbery or being delivered to a port with a high risk of robbery. If the answer is YES to all or some of the above then Clause A all risks would be recommended.
For second hand goods, baulk goods such as robust machines, scrap cars, then Clause B or C could apply.
There are no definite rules only guide lines and common sense.

Air Freight Insurance

We are now going to look at Institute Clause Air. It is less complicated than sea Insurance because there is only one clause for air.

Institute Clause Air which covers:

  • Warehouse to warehouse
  • Multi Modality
  • 30 Days duration.

In Clause Air the risks covered are ALL RISKS

EXCLUSIONS are the same as in marine insurance sea, insufficiency or unsuitability of packing is addressed under 3.3

DURATION has the same clauses , as duration under Marine insurance sea with the 30 day clause under 6.1.4

Finally, when you request Insurance from the Seller under CIF, CIP, or insure your cargo under any other Incoterms 2020 it is most important that you obtain an Insurance Certificate or Policy.

The Certificate or Policy is proof of the following.

The insurable Interest (what you are insuring)

The cover given (Clause A, B,C or Air)

The Insured amount

Commencement of Insurance

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