2. Unit 9 Insurance  Introduction  Words and Expressions  Key points of writing letters  Specimen letters  Useful sentences  Exercises

3.  Basically, anyone who has insurable interest in a cargo shipment, i.e. anyone who would suffer a loss if the goods were damaged or destroyed or who would benefit from the safe arrival of the cargo, has a need for ocean cargo insurance. One of the reasons of this is the fact that ocean shipments are still exposed to a number of hazards. Damage or loss of cargo is, however, still a real possibility from such causes as heavy weather, tsunami, earthquake, fire, stranding, collision, moisture, theft, etc.

4. 9.1 Introduction  Questions 1.What is the purpose of insurance? 2. As far as foreign trade is concerned, what risks are covered under an insurance policy according to CIC by PICC? 3. Does “All Risks” covers all the risks? What is not included? Frustration of Voyage, War risk, Strikes, Riots and Civil Commotions, Inherent Vice or Nature, Ordinary Leakage or Breakage, Delay of Voyage.

5. 4. Are you clear about the parties of an insurance contract? the insurer 承保人，保险人，即保险 公司 the insured 投保人，即进出口交易中 为货载投保的买方或卖方 5.How is the insurance calculated?

6.  Risks covered under Marine Insurance are divided into the following two kinds: I.Perils of the Sea----Nature Calamities(Heavy weather, wing storms, lighting, tsunami, earthquake, or volcanic eruption) & Accidents(stranding, touch & go, sinking, collision, missing, fire,etc.) II. Extraneous Risks----General extraneous risks(theft, shortage, breakage, leakage, moisture, rust, fresh water, etc.) & Special Extraneous risks (war, strike, aflatoxin, failure to deliver)

7. Types of Coverage 1,The Principal Perils  FPA: Free From Particular Average  WPA: With Particular Average  All Risk 2. Additional Risks

8. 9.2 Words and Expressions insure v. make a contract that promises to pay money in case of accident, damage, loss, etc. 为 … 保险，投保  to insure the goods against…on…  Please insure the goods against all risks and war risk. 请将此货投保一切险和战争 险。

9. insurance  undertaking, by a company, to safeguard against loss 保险  (1) n. 保险  insurance agents 保险代理人  Insurance broker 保险经纪人  insurance company 保险公司  insurance amount 保险额  life / accident / accident life/ agricultural / hospitalization / jobless insurance 各类保险

10. (2)v. 投保，洽办  arrange/cover/effect/provide/take out insurance  说明保险情况时， insurance 后接介词的用 法有： effect insurance on … (goods) against (Risk) for/at (amount) with (insurer) e.g. We have covered insurance on the 100 metric tons of wool for 110% of the invoice value against All Risks with PICC. 我们已将 100 吨羊毛按发票金额的 110% 向中 国人民保险公司投保了一切险。

11. 1.I ’ d like to talk something about the insurance on our porcelain ware. 2.Please note that our insurance coverage is for 110% of the invoice value. 3.How about your covering the insurance against All Risks and War Risks for 120% of the invoice value with PIcc. 4.The insurance rate is at a premium of 5%. 5.We generally only issue insurance for the total loss only. 6.The buyer is usually required to bear the cost of insurance on FOB terms. 7.we shall cover breakage risk for these goods. 8.We would also like to cover with particular average on the cargo. 9.We will cover insurance on your goods for 110% of the invoice value against All Risks as usual. 10.We can provide such coverage at a slightly higher primium.

12. 9.3 Key points of writing letters

13. 9.3.1 Key points of Letters in which importer asks exporter to cover insurance  1. refer to the goods and order Eg 1. We wish to refer you to… (our order No.401 for 500 cases toys, from which you will see that this order was placed on CFR basis.) Eg 2. We are pleased to inform you that…

14.  2. specify the coverage and insurance amount Eg 1: Please see to it that the insurance is covered for (110%) of the invoice value against (All Risks.) Eg 2: As we now desire to have the consignment insured at your end, we shall be much pleased if you will kindly arrange to insure the goods on our behalf against (All Risks) at invoice value plus (10%), amounting to (USD 2,000).

15.  3. explain how to pay premium eg 1: We shall of refund the premium to you upon receipt of your debit note. Eg 2: As we understand that as per your customary practice, you only insure the shipment for 10% above the invoice value, the extra premium for additional coverage shall be for our account.  4. wish a favorable reply Eg : We sincerely hope that our request will meet with your approval.

16. 9.3.2 replying to above letter  1. acknowledge the letter received Eg : This is to acknowledge receipt of your letter (dated 20th July) requesting us to effect insurance on the shipment for your account.  2. tell the opposite party insurance clauses, insurance value, etc. Eg: We are pleased to inform you that we have covered the shipment with (the PICC) against (All Risks) for (USD 5500).

17.  3. state the refund of premium Eg 1: The policy is being prepared accordingly and will be forwarded to you by next Tuesday together with your debit note for the premium. Eg 2: The extra premium will be for your account.

18. 9.4 specimen letters

19. Specimen letter 1 Dear sir, We refer to your order no.545 for 100 cases toys.We shall be shipping your order per SS Ocean Chief, due to leave here at the end of this month. Unless you give contrary instructions, we will arrange an all risks insurance policy for the shipment. In our opinion this type of cover is necessary for a cargo of this nature. We look forward to your early reply.

20. Specimen letter 2 Dear sir, Thank you for your letter of 5 March referring to your order no.646 for 4,000 jute sacks. In your letter you ask us to insure the order for an amount 25% above the invoice value. Our normal practice is to insure shipments for the invoice value plus 10%.We are, however, prepared to comply with your request and obtain cover for 125% of the invoice value. In the circumstances, the extra premium will be for your account. We trust that you will find this arrangement acceptable.

21. 9.5 Useful sentences  We agree to your request to insure the shipment for 130% of the invoice value, but the premium for the difference between 130% and 110% should be for your account.

22. 9.6 Exercises 敬启者： 我们非常遗憾地通知你方，不能对你方 所订购的 1000 台计算机按发票金额 150% 投 保，因为我们的惯例是按发票金额 110% 投 保。另外，合同中规定保险由卖方按高出发票金 额 10% 向中国人民保险人民保险公司投保一切 险和战争险。如果你方坚持你们这个意见， 我们可以办理，但额外保费应由你方承担。 请早日告知你方决定。 谨启

23. Dear sirs, We are sorry to inform you that we cannot cover insurance on your order for 1000 computers for 150% of the invoice value, as it is our usual practice to take out insurance for 110% of the invoice value. In addition, it is stipulated in the S/C that insurance is to be covered by sellers for 10% above the invoice value against All Risks and War Risk with PICC. However, if you stick to your arrangement, we may manage on your behalf, but the extra premium should be for your account. We await your early reply. Yours faithfully,