Insurance 

If a contract  of sale reflects terms of delivery CIF (cost, insurance and freight) or CIP  (Carriage and Insurance paid to.) we as the exporter are responsible for  insuring the goods for the journey.As  the seller, we must obtain at our own expense,cargo insurance as agreed in the contract, such that the buyer, or any  other person having and insurable interest in the goods, shall be entitled to  claim directly from the insurer and provide the buyer with an insurance policy  or other evidence of insurance cover. 

The insurance  provided by the seller only has to provide for minimum cover. Such limited  cover is suitable only for bulk cargoes, which normally do not suffer loss or  damage in transit unless something happens to the ship as well as the cargo  (stranding’s, collisions, fire etc). The duration of the insurance cover must  coincide with the carriage and must provide the buyer from the moment he has to  bear the risk of loss of or damage to the goods i.e. From the moment the goods  pass the ship’s rail at the port of shipment. It must extend until the goods arrive at the agreed port of destination.  If the customer requires additional cover i.e. War risk, strikes, riots and  civil commotion, they must make the request at the time the order is placed.

The amount of  insurance cover should correspond to the price provided in the contract, plus  10 percent. The additional 10 per cent is intended to cover the average profit  that the buyers of goods expect from the sale.The insurance should be provided in the same currency as stipulated in  the contract for the price of the goods.Our insurance is provided by insurance Broker Bannermans, controlled by  Logistics team.

Procedure to  follow:

Obtain an  insurance certificate from the Export manager, photo copy the certificate and  prepare a draft (using the photocopy) containing the following information:-

Conveyance:  (vessel name )

Place of  receipt: (depot where stock/container delivered)

Port of  loading: (as per Bill of Lading)

Port of  discharge: (as per Bill of Lading) 

Insured  value:…………………(this is 110% of the invoice value)

Description of  goods: (as per contract/Letter of Credit)

Container number/s. ……….seal no  ………….. (as stated on Bill of Lading)

Please insure for all risks. 

Please make the insurance policy  payable to : (details in contract/Letter of Credit).

Please supply …… originals and  ……..copies. (details in contract/Letter of Credit) 

NB - It is important to remember  that if a Letter of Credit applies to this shipment, the full Documentary  Credit number and description that is stated in this document, is included  under description of goods. Please also check that any other clauses called for  under the terms of the Letter of Credit are included as well.Who the insurance policy is paid to is  important, the customer may wish to have it made payable to themselves or a  third party such as a Bank and may wish to have it payable in their local  currency or a foreign currency.

Once drafted on the PC, print on  to the photocopy and get a colleague to check the details.

Check it against your  instructions and against any instructions you may have received from your  customer or against the terms of the Letter of Credit. If adjustments have to be made, update and  print another draft on a photo copied certificate (not the original).

Once the draft has been checked/amended, save the  changes and print an original certificate and copy.

Check with Logistics department who needs to sign  and date the certificates and if the back of the certificate needs to be  endorsed with MDL stamp.