Is Marine Insurance necessary?
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Post 2 of 31
Replying to [Admin]:Insurance will always be subject to weighing between risk, cost and profit on the goods.
Insurance on ocean freight is between 1 and 5% of the value of the goods.
For goods that give a high profit I would certainly choose the insurance nomatter what.
I'm trading lumber myself where profit is typically below 10% and insurance would become a high amount on my turnover.
When shipping to Europe which I know, I certainly would have a very valuable load to offer 10-15% of my profit on insurance. The market and competition is hard enough.
I would consider subject like:
- fragility
- risk of cargo over board due to weather conditions
- transport through high risk areas
- Destination to areas with high corruption
- What I can bear to lose
before I decide if insurance is worth the cost.
Insurance rates usually follow the risk, so it's always a good idea to check insurance rates. They are founded in someones serious investigation in the risk, which most of us are not able to judge in the same qualified way.
The need for insurance will always be an individual choice (gamble) based in your own situation.
Wishing you all good luck with your cargo.
Insurance on ocean freight is between 1 and 5% of the value of the goods.
For goods that give a high profit I would certainly choose the insurance nomatter what.
I'm trading lumber myself where profit is typically below 10% and insurance would become a high amount on my turnover.
When shipping to Europe which I know, I certainly would have a very valuable load to offer 10-15% of my profit on insurance. The market and competition is hard enough.
I would consider subject like:
- fragility
- risk of cargo over board due to weather conditions
- transport through high risk areas
- Destination to areas with high corruption
- What I can bear to lose
before I decide if insurance is worth the cost.
Insurance rates usually follow the risk, so it's always a good idea to check insurance rates. They are founded in someones serious investigation in the risk, which most of us are not able to judge in the same qualified way.
The need for insurance will always be an individual choice (gamble) based in your own situation.
Wishing you all good luck with your cargo.
18 Oct 2006 12:29
Post 3 of 31
Replying to [Admin]: No matter if you buy FOB or CIF, what you need if your mechandice not the insurance money. So, all the buyers should get insurance for marine or air shipments..this is a key factor. To get the marine insurance, you should contact your local insurance broket, normally they have policies for maritime shipments, if they don't, the forwarder will help you to get the rate and teh insurance for that specific shipment. Don't try to save money with the insurance, cost will be 0.5 to 1% of the cost...almost nothing
Alberto Echeverri
www.citroa.com
Alberto Echeverri
www.citroa.com
18 Oct 2006 12:54
Post 4 of 31
Replying to [Admin]:
Yes..it is a must if the product is at high value or huge quantity.
Without marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
Supplier will never reimburse you, the insurance company will.
Yes..it is a must if the product is at high value or huge quantity.
Without marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
Supplier will never reimburse you, the insurance company will.
18 Oct 2006 13:26
Post 5 of 31
Replying to [Admin]: As a moderator myself I really cant add anything to the post by Peter_WoodShop and would get my nod for the best answer.
Best regards,
Ranger
Best regards,
Ranger
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24 Oct 2006 22:53
Post 6 of 31
Replying to [Admin]:
Yes..it is a must if the product is at high value or huge quantity.
Without marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
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Yes..it is a must if the product is at high value or huge quantity.
Without marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
26 Oct 2006 01:46
Post 7 of 31
Replying to [Admin]:
Yes.it is a must if the product is at high value quantity.
With marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
Yes.it is a must if the product is at high value quantity.
With marine insurance, if any natural disaster occur during the shipment, your money and your product will go with the wind.
26 Oct 2006 01:47
Post 8 of 31
Replying to [Admin]: Yes. With the proforma invoice, from the supplier, handy the buyer proceed to get the marine insurance. The idea is this: generally, the supplier would indicate on the pro-forma invoice that 'Insurance would be arranged (locally) by the buyer whilst the supplier takes care of the inland transit from the Works (factory) to the port of loading. Though it varies from country to country, but generally the underlying principle is same all through.
The buyer approach an insurer / insurance broker with a copy of the proforma invoice, to facilitate the issuance of Certificate of Marine Insurance by the insurer / broker. The insurance company / broker picked the necessary information from the pro-forma invoice, viz-a-vis: Buyer's name address; pro-forma invoice reference and date; product's details; country/port of loading of consignment; port of discharge of consignment and means of conveyance - whether by air, sea or rail.
The buyer negotiates the premium rate with the insurer / broker, to enable the insurer/broker compute the marine insurance premium as well as the insured value of the goods. These values - insured sum and premium would of course be clearly stated on the Certificate of Marine Insurance. The buyer pay for the premium and the certificate is issued to him thereafter - depending on the payment agreement between between both the insurer / broker and the insured. Though, it is advisable for the insured to always pay the premium promptly, otherwise he would not have any right of claim in the event of any eventualities from the insurer and/or the seller.
It is instructive to add at this particular juncture that the insured party (that is, the buyer seeking to insure his goods) take special note of the following common 'small letterings' conditional clauses at the back of the certificate and understand those wordings to the letter:
1. Marine cargo conditions, that is often subject to:
- Institute cargo clause
- Institute war clauses
- Institute strike clauses
- Institute replacement clause
- Port delay clause
- Full value clause
- Containerized cargo clause
- Cutting clause
- Cancellation clause
- Institute dangerous clause
- Etc
2. Excluding clauses
3. Documentation of claims
4. Important liability of carriers, bailees or other third parties.
5. Lifespan of the Certificate.
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It is ABSOLUTE necessary to have the marine insurance. This is 21st century for all that matters and in order to make the transaction credible, it is essential that the goods are insured, otherwise it would appears as if the buyer/seller are 'fly-by-night' fellows. Infact, the marine insurance certificate document is one of documents the buyer must present to his Bank before the Bank can mid-wife the transaction, ditto for the various pre-shipment assignments and government agencies (like the Customs, Standards org, etc) at the port of discharge. Above all, it is better to pay for the insurance premium than to engage oneself in explaining something else afterwards.
The buyer approach an insurer / insurance broker with a copy of the proforma invoice, to facilitate the issuance of Certificate of Marine Insurance by the insurer / broker. The insurance company / broker picked the necessary information from the pro-forma invoice, viz-a-vis: Buyer's name address; pro-forma invoice reference and date; product's details; country/port of loading of consignment; port of discharge of consignment and means of conveyance - whether by air, sea or rail.
The buyer negotiates the premium rate with the insurer / broker, to enable the insurer/broker compute the marine insurance premium as well as the insured value of the goods. These values - insured sum and premium would of course be clearly stated on the Certificate of Marine Insurance. The buyer pay for the premium and the certificate is issued to him thereafter - depending on the payment agreement between between both the insurer / broker and the insured. Though, it is advisable for the insured to always pay the premium promptly, otherwise he would not have any right of claim in the event of any eventualities from the insurer and/or the seller.
It is instructive to add at this particular juncture that the insured party (that is, the buyer seeking to insure his goods) take special note of the following common 'small letterings' conditional clauses at the back of the certificate and understand those wordings to the letter:
1. Marine cargo conditions, that is often subject to:
- Institute cargo clause
- Institute war clauses
- Institute strike clauses
- Institute replacement clause
- Port delay clause
- Full value clause
- Containerized cargo clause
- Cutting clause
- Cancellation clause
- Institute dangerous clause
- Etc
2. Excluding clauses
3. Documentation of claims
4. Important liability of carriers, bailees or other third parties.
5. Lifespan of the Certificate.
It is ABSOLUTE necessary to have the marine insurance. This is 21st century for all that matters and in order to make the transaction credible, it is essential that the goods are insured, otherwise it would appears as if the buyer/seller are 'fly-by-night' fellows. Infact, the marine insurance certificate document is one of documents the buyer must present to his Bank before the Bank can mid-wife the transaction, ditto for the various pre-shipment assignments and government agencies (like the Customs, Standards org, etc) at the port of discharge. Above all, it is better to pay for the insurance premium than to engage oneself in explaining something else afterwards.
26 Oct 2006 05:59
Post 9 of 31
Replying to [Admin]: I agree with Peter_WoodShop. Here are some additional points which back up his position.
1 - In some places Insurance may be considered as part of the taxable cost. You therefore pay more in import duties.
2 - Consider the season (e.g. hurricane season in the caribbean) when planning shipments of any kind
1 - In some places Insurance may be considered as part of the taxable cost. You therefore pay more in import duties.
2 - Consider the season (e.g. hurricane season in the caribbean) when planning shipments of any kind
27 Oct 2006 19:12
Post 10 of 31
Replying to [Admin]:
Pls approach any insurance company which can insure goods send by sea. It is very essential to insure goods wheather for domestic supply or for export. Your money is secure if the vehicle or ship meets with accident or your goods destroyed due to riot,natual calamities. Insurance companies will pay back the value of goods in case of above, provided you insure them in time.
Pls approach any insurance company which can insure goods send by sea. It is very essential to insure goods wheather for domestic supply or for export. Your money is secure if the vehicle or ship meets with accident or your goods destroyed due to riot,natual calamities. Insurance companies will pay back the value of goods in case of above, provided you insure them in time.
28 Oct 2006 03:50
Post 11 of 31
Replying to [Admin]:I consider Insurance necessary for all Imports considerating the insured percentage which is from 0.75 to 1% on the value that you are importing. Whether for a manufacturing company or a trading company it's important that you insure your products if you are importing by Airplane & Seafreight. You never know what can happen - mishandling & other natural disaster and accident. The supplier will not refund you if any problem happen.
28 Oct 2006 04:44