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CARGO INSURANCE COVERAGE

Generally, the following 3 kinds of covers are most common for overseas transit:

1. INSTITUTE CARGO CLAUSES (A) -UNNAMED PERIL BASIS - All Risks Cover

2. INSTITUTE CARGO CLAUSES (B) - NAMED PERIL BASIS

3. INSTITUTE CARGO CLAUSES (C) - NAMED PERIL BASIS

A. RISKS / CONTINGENCIES COVERED BY ICC (A):

 

This is an ‘All Risks’ Cover. It includes the following:- 

    

1.Provides cover for All risks of loss or damage to the subject matter insured, except those specifically excluded under clauses 4,5,6 and 7.  

 

 

B. RISKS COVERED BY ICC (B)

  

This insurance covers, except as provided in Clauses 4, 5, 6 and 7 below, loss of or damage to the subject-matter insured reasonably attributable to;

  • Fire or explosion
  • Vessel  being stranded ,grounded, sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel with any external object other than water
  • Discharge of cargo at a port of distress 
  • Earthquake volcanic eruption or lightning
  • General average sacrifice and Salvage Charges
  • Jettison or washing overboard
  • Entry of sea, lake or river water into vessel ,conveyance container, lift van or place of storage,Total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft.

C. RISKS COVERED BY ICC (C)

This insurance covers, except as provided in Clauses 4, 5, 6 and 7 below, loss of or damage to the subject-matter insured reasonably attributable to;

  • Fire or explosion 
  • Vessel being stranded ,grounded ,sunk or capsized 
  • Overturning or derailment of land conveyance 
  • Collision or contact of vessel  with any external object other than water 
  • Discharge of cargo at a port of distress, 
  • General average sacrifice and Salvage Charges
  • Jettison.

EXCEPTION 4, 5, 6 AND 7

Exception 4; General Exclusion Clause such as ;

  • Willful misconduct , 
  • Ordinary leakage, 
  • Ordinary loss in weight or volume, or 
  • Ordinary wear and tear of the subject-matter 
  • Insufficiency or unsuitability of packing, 
  • Inherent vice or nature of the subject-matter insured,   
  • Deliberate damage to or deliberate destruction of the subject-matter insured etc.
  • Exception 5. Un sea worthiness and Unfitness Exclusion Clause.
  • Exception 6: War Exclusion Clause (Can be bought back)
  • Exception 7: Strikes Exclusion Clause (Can be bought back)

Open Cover

An open cover is particularly useful for large export and import firms-making numerous regular shipments who would otherwise find it very inconvenient to obtain insurance cover separately for each and every shipment.

The following are the important features of a Marine Open Cover

Limit  per conveyance 

  • The value of a single shipment declared under the open cover should not exceed the stipulated amount.

Basis of Valuation

The ‘Basis’ normally adopted is the:

Prime cost of the goods + Freight + Cost of insurance, + 10% to cover profits and other charges

 

Location Clause

While the limit per conveyance mentioned under above is helpful in restricting the commitment of insurers on any one vessel, it may happen in actual practice that a number of different shipments falling under the scope of the open cover may accumulate at the port of shipment.

The location clause limits the liability of the insurers at any one time or place before shipment.

Generally, this is the same limit as the limit per conveyance specified in the cover, but sometimes it  may be agreed at an amount, say, up to 200% thereof. 

Rate

A schedule of agreed rates is attached to each Marine Open Cover.

Terms

There may be different terms applying to different commodities covered under the open cover, and they are clearly stipulated.

Declaration Clause

The insured is made responsible to declare each and every shipment coming within the scope of the open cover.

Cancellation Clause

This clause provides for cancellation of the contract with a certain period of notice, e.g., a month’s notice on either side. In case of War & S.R.C.C. risks, the period of notice is much shorter.

Certificate of Insurance

A certificate of insurance is issued to satisfy the requirements of the insured or the banks in respect of each declaration made under an open cover and / or open policy. 

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Available Saturday: 9 AM – 1 PM EAT