Lesson Thirteen

A Brief in Introduction to Marine Insurance

Banking and insurance are sometimes referred to as “the handmaidens of industry and commerce”, as the services they provide are vital to the smooth running of the economic system.

Insurance provides a pool or fund into which the many contribute and out of which the few who suffer loss are compensated. Insurers frequently re-insure a portion of the “risk” they have accepted. The insurance of large “risks” is spread directly or indirectly over a large number of insurance or re-insurance companies or underwriters.

Insurance has become a vast subject and now enters into almost every activity of man. The  idea of insurance is to obtain some indemnity in the event of any happenings that cause loss of money; insurance is against risk. For instance, dancers insure their legs, singers their voices, musicians their hands. It is posible in these days to insure against almost any eventuality that may cause loss of one kind or another.

Insurance is distinguished from gambling, because the gambler desires the event to occur on which he gambles . He stands to gain if it does so. In insurance no one desires the event to occur; if it does so, the insured person receives an indemnity for the loss sustained.

The following are the chief branches of insurance:

1.       Fire

2.       Accident

3.       Life

4.       Marine

It is customary to insure goods sold for export against the perils of the journey. In international trade, the transportation of goods from the seller to the buyer is generally over a long distance by air, by land or by sea and has to go through the procedures of loading, unloading and storing. During this prcess it is quite possible that the goods will encounter various kinds of perils and sometimes suffer losses. In order to protect the goods against possible loss in case of such perils, the buyer or seller before the transportation of the goods usually applies to an insurance company for insurance covering the goods in transit.

The transportation insurance covering goods in import and export trade means:

1.       The insured or assured (either the exporter or importer) applies to an insurance company for insurance to cover a lot or several lots of goods to be transported by declaring the sum to be insured, the kinds of insurance cover and by paying the insurance premium.

2.       The insurance company, after agreeing to cover the insurance, will pay the assured any financial loss eventually suffered by the goods during transportation according to the terms of the insurance agreement, which is called an insurance policy or certificate.

The term “marine insurance” is somewhat misleading because the contract of marine insurance can, by agreement of the parties or custom of the trade, be extended so as to protect the insured against losses on inland waters or land which are incidental to the sea voyage. In the export trade it is usual to arrange an extended marine insurance under the “warehouse to warehouse” clause in order to cover the transportation of goods from the warehouse of the seller to the port of dispatch, and from the port of arrival to the warehouse of the overseas buyer.

In China, the People’s Insurance Company of China takes care of the country’s insurance. The People’s Insurance Company of China is a state-run insurance company who, in one of its lines, protects the interests of the insured ---- Chinese and foreign importers and exporters and helps in the development of our country’s foreign trade. The Company accepts transportaton insurance, such as marine insurance, land transportation insurance, aviation transportation insurance and parcel post insurance. Of course, marine insurance is the biggest item, which we are going to study in the following Chapters.

Notes:

1.       marine insurance 海上保险

2.       marine insurer              水险保险人

3.       reinsurance     再保险，分保

4.       underwriter    保险业者，承保人

5.       indemnity       赔偿，补偿

6.       fire insurance         火灾保险，火险

7.       accident insurance  意外险，事故保险

8.       life insurance  人身保险，人寿保险

9.       transportation of goods  货物运输，货运

10.   transit     转运，转口

11.   transportation insurance        运输保险

12.   declare    申报

13.   insurance cover      保险范围，保险总额

14.   insurance premium        保险费，保费

15.   insurance policy     保险单

16.   insurance certificate       保险凭证

17.   custom of trade（custom of foreign trade）（对外）贸易惯例

18.   inland waters  内河

19.   extended insurance 延展保险

20.   warehouse to warehouse clause     仓库至仓库条款

21.   warehouse-to-warehouse cover“仓至仓”保险