UnitInsurance.pptVIP

Unit 13Insurance Text A It is customary to insure goods sold for export against the risks 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 process it is quite possible that the goods will encounter various kinds of risks and sometimes suffer losses. In order to protect the goods against possible loss in case of such risks, the buyer or seller before the transportation of the goods usually applies to an insurance company for insurance covering the goods in transit. The premium charged for the insurance policy is calculated according to the risks involved. A policy which protects the holder against limited risks charges a low premium, and policy which protects against a large number of risks charges a high premium. The insurance value is calculated as: cost of goods + amount of freight + insurance premium + a percentage of the total sum to represent a reasonable profit on sale of the goods. For CIF transactions, we usually effect insurance for 110% of the invoice value against … (risks), that is to say 100% is for CIF invoice value and 10% is to cover a reasonable profit and some expenses. Sometimes, buyers may request insurances to cover more than 110%. In such circumstances, the extra premium will be for buyer’s account. Text B (A) Dear Sirs, In reply to your letter of November 13 enquiring about the insurance on our CIF offer for Traveling Scissors made to you on the 20 October, we wish to give you the following information: For transactions concluded on CIF basis, we usually effect insurance with PICC against All Risks, as per Ocean Marine Cargo Clauses of PICC dated the 1 January, 1981. Should you require the insurance to be covered as per Institute Cargo Clauses (ICC) we would be glad to comply but if there is any difference in premium between the