Cargo insurance

All cargoes, moving through countries in transit, are not liable to compulsory insurance. In case of your willingness to have insurance with big coverage, you can either specially arrange it with seller or conclude additional insurance agreement by yourself.

Insurance of road transport (CMR):

In 1976 in Geneva, the convention on international road transport established carrier’s liability for cargo safety (CMR). Such kinds of security make up a liability for loss or damage of the cargo, transporting by a carrier due to convention CMR.  Insured risks:
1.    Legal liability before cargo’s owner for total loss or damage of the cargo who accepted goods for transportation. Expeditor’s legal liability is spread to the cargo, that was accepted for dispatch on the basis of expedition contract by condition that expeditor is not carrier;
2.    Legal liability before third parties (losses related to damage done to the third party by cargo/or vehicle during transportation);
3.    Responsibility for customs duties payments, fines and other penalties, that could be imposed due to the customs laws and regulations of relevant countries upon violations, related to foreign economic operations, including observance of cargo transporting procedure using TIR Carnet, established by TIR Carnet Convention in 1975.

The reimbursement. As far as CMR is an insurance of civil-law responsibility, the compensation will be received only by injured party – the cargo’s owner. The carrier’s liability is limited by the size of compulsory insurance of an international consignment note (CMR) and it is consists of:
а) during the cargo transportation without declaring its cost in CMR within 8.33 SDR units (Special Drawing Rights) per 1 kg of gross weight of the lost or damaged goods (Article 23 of CMR Convention);
б) during the cargo transportation with declared its cost in CMR within declared amount (Article 24 of CMR Convention)

Insurance of air transportation (Warsaw Convention):
In the international insurance operations and liability insurance: an international agreement, ratified in more than 40 countries in 1929 to which the majority of other world’s countries have joint after. The Convention sets air transportation liability to passengers in case of injuries and death during the international air transportation, during the flight in air spaces of other countries and over international waters. Under the Convention liability limitations won’t be applicable if it is proven that the accident occurred as a result of the air carrier deliberate actions or the aircraft crew.

The compensation amount is 20 USD per 1 kg of a cargo.

Ocean-sea freight insurance (United Nation Convention of the cargo sea shipping (Hamburg Regulations)

This Convention, adopted by Diplomatic Conference on the 31st of March 1978, establishes unified legal regime, regulating the rights and obligations of the shippers, carriers and consignees according to the ocean-sea freight contract. The Convention has come into force on the 1st of November, 1992.

Ocean-sea freight insurance – is the most optimum way to ensure safety of personal property and in case of damage to get compensation for cargo damaging. It depends not only on the fact that ocean-sea freight was fulfilled by a careless carrier who actually became a reason of goods damage or its’ total loss,  it happens quite often that the reason of damage are the circumstances which are not depending on the carrier.

The main types of ocean-sea freight insurance  are full insurance of all risks, insurance of liability for damaged cargo or for its total lost. These types of insurance differ from each other by main conditions, described in insurance contract, that represents liability level of the carrier for entrusted to him cargo.

The main conditions of insurance, due to which the main risks insurance is being made, are including into the terms of the contract the points of main risks insurance, based on which the estimated calculation of the liability level and the amount of damages could be done.  For example, the cargo could be insured against all risks, which could happen during the ocean-sea freight and which could bring losses to the insured.

The main types of the total insurance conditions are the insurance of actions, that intentionally injured by a carrier, an influence of a weather conditions and attendant conditions (mar by rodents or by vermin), so-called force majeure conditions – military operations or weather conditions that have spoiled the cargo as a result.  The main types of general terms of insurance are insurance of actions which are done by the carrier on intention, weather or other factors influencing on the cargo (such as damage made by rodents and other parasites), so-called force-majour circumstances – military actions or weather conditions due to which the cargo was spoiled.

There is also more narrow range of carrier’s cargo liability insurance, which could include only liability for cases which cannot be controlled by the carrier, such as fire or vessel’s leakage.

But during insurance the age of vessel should also be taken into account. For example from transportation of cargo in vessel which is 16 years old the insured make an additional payment of insurance bonus. This is done because when you organize the shipment on the 16 years old vessel the risk of cargo injury is increased.

That is why the insurance contract for ocean-sea freight is a guaranteed protection of a cargo from careless carrier and, of course, from the factors that are not depended on the insured and insurer.

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