ANALYSIS OF

MARINE CARGO INSURANCE

AT COAL INDIA COMPANY

Group 4
Dao Khanh Linh
Yen
Nguyen Thi Nga
Mai Ha My

Nguyen Thi Lan Phuong Nguyen Bao

Nguyen Ngoc Linh

Le Hong Phuc

Group Members Assessment

Name

Jobs assigned

Marks

Dao Khanh Linh

Part 1, Part 2, editor

A+

Nguyen Thi Nga

Part 2, editor

Mai Ha My

Part 2

Nguyen Ngoc Linh

Part 2

Nguyen Thi Lan

Phuong

Part 1, slides designer

B+

Nguyen Bao Yen

Part 2

Le Hong Phuc

Part 2

Table of contents
1. Summary of Marine Cargo Insurance
2. Analysis of Marine Cargo Insurance
at
Coal India Company
Coal India Ltd
Marine cargo open cover
Marine Cargo Open Policy for Inland Transit
Fire and Burglary Cover For Interim Storage At
Port

Part 1
Marine Cargo Insurance
Summary

Marine Cargo Insurance Contract (Hp

ng bo him hng hi hng ha xnk) is
Indemnify/Compensate the
insured against losses or
damages during maritime
transportation
Insured/
Assured/
Policy Holder

A Contract
Between

Insurer/
Assurer/
Insurance
Company

Buy insurance contracts and

pay a premium to the insurer
for shipped cargo that is
subject to risks

Under CIF

Seller
MUST
buy
insurance
contracts
and
pay
insurance
costs

Under FAS/FOB/CFR

Seller is NOT
OBLIGED to insure
goods.
Buyer SHOULD buy
insurance contracts if
necessary

Concepts
Insurabl The object that can be insured (i tng bo
e
him)
Interest
InsurableThe economic value of the insurable interest
Value
(Tr gi bo him)

The amount actually insured in conclusion of

Insured
insurance contract on the basis of insurable value
Amount

(S tin bo him)

Insurance Premium (Ph bo him)

Reasons for Insurance

Acts
of
God
(Nat
ural
Disa
sters

W
ar

Pir
ac
y
Colli
sion

Mis
sin
g/
Sin
kin
g/
Str
and
ing
risk

Fir
e

What is maritime loss?

Loss in a marine insurance contract is
realized when the insurable interest of an
insured is lost or injured due to any of the
perils of the sea commonly ensured for,
or perils that are specifically covered by
the insurance contract.
(Tn tht l nhng h hi, mt mt ca i
tng bo him do nhng ri ro thng
thng trn bin hoc nhng ri ro c bo
him gy nn)

Maritime
Loss
Total Loss
(Tn tht ton
b)

Actual Total Loss

(Tn tht ton b thc
t)
Constructive Total
Loss
(Tn tht ton b c
tnh)

Partial Loss
(Tn tht b
phn)
Particular
Average
(Tn tht ring)

General
Average
(Tn tht chung)
General Average
Expenditure
(Chi ph tn tht
chung)
General Average
Sacrifice
(Hy sinh tn tht
chung)

Subject-matter insured is actually lost, the original

nature of the subject matter insured altered or lost

Total loss

Actual total
loss

Insured ship or cargo is missing for a substantial

period of time

Total loss of subject-matter insured is highly likely to

be inevitable but not definite.

(khng sao trnh khi tn tht ton b

thc t)
Constructive
total loss

The control of the insured cargo is lost and is not

likely to be restored or the restoring cost exceeds
the price of cargo
The cost spent for repairing and carrying to the
destination exceeds the value of cargo in arrival

Examples:
Mt l ng c ch t nc ngoi v Vit Nam,
dc ng ng b ngm nc v bt u thi, nu
c mang v Vit Nam th ng s thi ht, tn tht
ton b thc s chc chn s xy ra. Actual
Total Loss
Vn chuyn st thp t nc ngoi v Vit Nam,
dc ng tu hng my buc phi vo Hng
Kng sa cha. cha tu phi d st ln
b, trong thi gian cha phi lu kho lu bi st
thp, khi cha xong phi ti xp st thp xung
tu v a st thp v Vit Nam. Tng cc chi ph
phi b ra trong trng hp ny c th bng hoc
ln hn tr gi bo him ca st thp.

Partial Loss

Particul
ar
Average

Caused by a peril (risk) insured against and is

not distributed over the whole of the interests at
risk. (tn tht ca ring tng quyn li bo him do
thin tai, tai nn bt ng gy nn)

General Average
Expenditure

General
Averag
e

Caused by any extraordinary

sacrifice or expenditure
intentionally & reasonably made
or incurred to secure the
common safety
(nhng thit hi xy ra do nhng chi
ph v hy sinh c bit c tin hnh
mt cch c v hp l nhm cu
tu, hng ho v cc ph khi b tai
ho trong mt hnh trnh chung trn
bin)

incurred or caused by
General Average Act
(chi ph lin quan n
hnh ng tn tht
chung)

General Average
Sacrifice:
a sacrifice of cargo by
jettisoning
cargo
overboard to secure
the vessel (l s hy
sinh ti sn cu cc
ti sn cn li)

Examples:
Dc ng tu b st nh lm hng ha ca ch hng
A b chy, tn tht ca hng A l do thin tai, ch hng
A phi t chu, hoc i cng ty bo him, khng c
phn b tn tht cho ch tu v cc ch hng khc.
Tn tht trong trng hp ny l tn tht ring.
Particular Average
Tu gp bo ln, buc phi vt hng ca ch hng A
xung bin cu ton b hnh trnh. Hng A b vt
xung bin l hy sinh tn tht chung. General
Average Sacrifice
Chi ph tu ra vo cng lnh nn, chi ph lu kho lu bi
ti cng lnh nn, chi ph tm thi sa cha nhng h
hi ca tu, chi ph tng thm v nhin liu. General
Average Expenditure

TYPES OF INSURANCE CONTRACT

I. Classification

Valued policy
(Hp ng bo him nh gi)

Specifies the agreed value

of the subject-matter insured
(ghi r tr gi hoc s tin bo
him ca hp ng bo him)
Value fixed is conclusive as
the insurable value of the
insurable interest with the
absence of fraud and gross
negligence
Buyers expected profits are
included in the insurable
value

Unvalued policy
(Hp ng bo him khng nh
gi)

Specifies maximum limit of

the amount insured and leaves
the insurable value to be
ascertained subsequently
(khng ghi r s tin bo him
hay gi tr bo him; gi tr bo
him c xc nh sau)
Value of insurable interest has
to be ascertained by
production of invoices,
vouchers, estimates and
other evidences

Voyage policy
(Hp ng bo
him chuyn)
The subject-matter is
insured in transit
from one place to
another
(l hp ng bo him
cho
mt
chuyn
hng hoc mt l
hng
c
vn
chuyn t mt cng
ny n mt cng
khc; c gi tr i vi
tng chuyn hng)
Under institute
cargo clauses A, B,
C:
the transit clause
extends marine
insurance to land risks

Time
policy

The
subjectmatter
is
insured for a
fixed
period
of time
(bo him trong
khong
thi
gian nht nh)

Mixed
policy

The subjectmatter is insured

both for a
particular
voyage and a
certain period
of time
(bo him cho
mt chuyn
hng trong
khong thi gian
nht nh)

Floatin
g
policy
(Hp
ng
bo
him
bao)

Cover automatically all shipments made

thereunder and the assured is obliged to
declare the individual shipments to the insurer
promptly

(hp ng dng bo him cho nhiu chuyn,

nhiu l hng trong mt khong thi gian nht
nh)
The amount of each voyage is deducted
from the total value of the insurance contract
and the insured amount is automatically
renewed after the each voyage is completed (S
lng mi chuyn i c tr vo tng gi tr ca
hp ng bo him v s tin bo him c t
ng gia hn sau mi chuyn i l hon thnh)

II. Insurance policies (cc iu

kin bo him)

ICC 1963

ICC 1982

FPA (Free from Particular

Average): iu kin min tn
tht ring
WA (With Particular
Average): iu kin bo
him tn tht ring

C: phm vi bo him
tng ng vi FPA

AR (All Risk): iu kin bo

him mi ri ro
WR (War Risk): iu kin
bo him cc ri ro chin
tranh
SRCC (Strikes, Riots and
Civil Commotion) : iu
kin bo him ri ro nh
cng

A: phm vi bo him
tng ng vi AR

B: phm vi bo him
tng ng vi WA

WR
SRCC

Institute Cargo Clauses A (ICC A)

Provides coverage for all risks of loss or damage to
cargo, except those excluded by a few specific standard
exclusions, such as the willful misconduct of the insured or
ordinary wear and tear.
The words all risks should be understood in the context of the
A clause to cover fortuitous loss, but not loss that
occurs inevitably.

Institute Cargo Clauses B (ICC B)

Provides not only all of the cover that is available under C

but also covers loss of or damage to the subject matter insured if
it can be reasonably attributable to earthquakes,
lightening, washing overboard, etc.

Institute Cargo Clauses C (ICC C)

covers loss or damage to the subject matter insured when it can
be reasonably attributable to fire or explosion, a
stranded, grounded, or capsized vessel, collision, or a
discharge of cargo at a port of distress.

khi tu)

10. Entry of sea lake

or river water into
vessel or place of
storage (Nc bin,
nc sng, nc h trn
vo tu, hm hng, x
lan, phng tin vn
chuyn hoc ni cha
hng)

11. Total loss of any

package lost
overboard or
dropped whilst
loading on to or

7
1. Fire; Explosion
2. Stranded/ Sunk
or Capsized
Vessel
3. Phng tin
vn chuyn
ng b b lt
hoc b trt bnh
4. Collision
5. Discharge of
cargo at a port of
distress
6. General
average sacrifice:
s hy sinh ti sn

Covered Risks Under ICC

(C)

ALL
risks of
loss of
or
damag
e

ICC (C)
8. Earthquake;
Volcanic eruption;
Lightening
9. Washing
overboard (Nc cun

Covered Risks Under ICC

(B)

Covered Risks Under ICC (A)

Covered Risks Under ICC (A), (B), (C)

11

cu cc ti sn cn li
(chi ph cu nn)

7. Jettison: nm

Part 2
Analysis of Marine Cargo
Insurance at Coal India
Company

COAL INDIA LTD (CIL)

A Maharatna company undertaken by the
Ministry of Coal, Government of India.
Came into being in November 1975.
The single largest coal producer in the
world with 400 million of tons annually
Has

various

importing

and

subsidiary

procuring

Machineries and Equipment

Extracted from: https://www.coalindia.in/

companies
Mining

Marine Cargo Open Cover

Functio
n

For import shipment from any overseas Seaport / Airport to final

destination in coalfield area of Coal India Limited.

Insurabl
e
interest

Imports of Machineries /Equipment /Project Equipment/ Spares

&Stores used in Mining Industries
Nature of cargo: Break Bulk/Containerized (FLC or LCL), ODC
etc..

Mode of Approved Vessels

conveya Aircraft
nce
Rail/Road/Air from Seaport/Airport
Trade
terms

CFR (incoterms 2010)

Type of
contract

Floating policy (with the limit value both per conveyance and per
location is Rs.250 Cr)
Time cover: for period of 3 years

Clause

ICC(A), WR & SRCC Clause

Covered
risks

Marine all risk as per ICC(A) which provides coverage for all risks of
loss or damage to cargo

Addition
al
storage
period

180 days after discharge of cargo at final Port of Discharge.

However, the risk will cease after it reaches at the final destination
selected by the assured.

Claim

Up to 30 days from the date of arrival of consignment at final

Marine Cargo Open Policy

for Inland Transit

Function

For inland dispatch of imported consignment from any Indian

Seaport/ Airport/ Warehouse to final destination in coalfield
area of Coal Indian Limited

Insurable
interest

Inland transit of Imported Machineries/Equipment/ Project

Equipment/ Spares & Stores used in Mining Industries
Nature of cargo: Break Bulk/Containerized (FLC or LCL),
ODC etc..

Trade
terms

CIF (incoterms 2010)

Type of
contract

Floating policy with value per conveyance and location Rs.

10Cr and Rs.250Cr respectively)
Time policy: for period of 3 years

Mode of
Rail/ Road/ Air from Seaport/Airport of entry to final destination
conveyanc in coal fields of CIL through transporter/ courier/any authorized
e
person
Clause

ICC(A). SRCC Clause

Covered
risks

Marine ALL RISK as per ITC (A) which provides the coverage for
all risks of loss or damage to cargo except from the loss that
occurs inevitably.

Additional
storage
period

180 days after discharge of cargo at final destination.

However, the risk will cease after it reaches at the final
destination selected by the assured

Fire and Burglary Cover For

Interim Storage At Port

Function For inland dispatch of imported consignment from any Indian

Seaport/ Airport/ Warehouse to final destination in coalfield
area of Coal Indian Limited
Insurable
interest

Imported Machineries/Equipment/ Project Equipment/ Spares

& Stores used in Mining Industries
Commodities are in the nature of Break Bulk/Containerized
cargo (FLC or LCL) ODC etc..

Type of
contract

Valued policy ( specifies the agreed value Rs.15 Core for

both Fire and Burglary policy)
Time policy: for period of 3 years

Clause

ICC(B) : Standard fire and special Peril policy + some additions

Covered
risks

Standard fire and special Peril policy

Additions: Earthquakes, STFI (storm,
inundation) and terrorism.

typhoon,

flood,

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