For safe and secure cargo delivery - MSIG Partner …partner.msig.com.my/dotAsset/25602.pdf · 3 Whether you are a manufacturer or a trader, the movement of materials or goods is

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For safe and secure cargo delivery

MARINE CARGO INSURANCE

For safe and secure cargo delivery

MSIGMarine Cargo Insurance

• MarineCargoInsuranceUnderwriting 4

• MarineCargoInsuranceClaimsGuide 16

• MarineCargoInsuranceLossPreventionGuide 23

MSIGMalaysiaispartoftheMitsuiSumitomoInsuranceCo.,Ltd.networkinJapan.Thegrouphasreceivedstrongfinancialratingsfromleadingratingsagencies,includingStandard&Poor’sandMoody’s,andoperatesinover40globalmarketsofwhich16areinAsia.Withanationwidenetworkof20branches,weareoneofthelargestgeneralinsurersinMalaysia.

Weknowthateverythingyouholddearhasyourheartinit.That’swhywemakeeveryefforttobeactive,confident,efficientandsincere.Wegoaboveandbeyondtobringyouawiderangeofhigh-qualityproductsandservicesbackedbyfinancialstability,acommitmenttoserviceexcellence,andglobalexpertisewithlocalknowledge.

AmemberofMS&ADInsuranceGroup,MSIGislicensed undertheInsuranceAct1996andregulatedby BankNegaraMalaysia.

Moredetailsatwww.msig.com.my

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Whetheryouareamanufactureroratrader,themovementofmaterialsorgoodsisanimportantpartofyourbusinessactivity.MSIGunderstandsthatyouhaveyourheartintheirsafedeliverywherevertheirdestination.That’swhywegoaboveandbeyondwithMSIGMarineCargoInsurance,notonlytoprotectyourcargo,butalsotosupportitwithsettlingclaimsfairlyandpromptly.

ThisMarineCargoInsuranceClaimsandLossPreventionGuideispartofourefforttoprovideyouwithabetterunderstandingofcargoinsuranceandlossprevention.

Theclaimsguidelinesdescribedhereareintendedtoserveasareadyreferenceforsimpleandstraightforwardclaims.Forindividualclaimsthatdonotcomplywiththeguidelines,pleasecontactusimmediately.

Shouldtherebeanydifferencesbetweenpolicydetailsorfeaturesmentionedinthisguideandthoseinyourcurrentpolicy,youshouldrefertoyourcurrentpolicy.

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Marine Cargo Insurance Underwriting

IntroductionMarineCargoInsuranceprotectsgoodsintransitbysea,airorlandagainstlossordamagecausedbyawiderangeofperils.

Incertaincircumstances,internationallytradedcargomustbeinsuredinordertosatisfytherequirementsofthebankfinancingthetransaction.

Generallyspeaking,MarineCargoInsurancecoversgoodsintransitbetweentwocountriesor,byairorseawithinthesamecountry.However,ifrequired,itcancovergoodsintransitbyroadorrailwithinthesamecountry.

Choosing the Right InsurerWhileitisalwaysimportanttochoosetherightinsurer,itisevenmoresowithMarineCargoInsurance.Youshouldchoosetheinsurerwhocanadviseyouonthebestpossiblepackagebasedonyourneedsandwhowilltaketheultimateresponsibilityforthewayyourgoodsareinsured.Ifdifficultiesarise,theinsurershouldbeabletoprovidesolutionsquicklyandwithminimalfuss.

MSIGisNo. 1*inMarineCargoInsuranceinMalaysia.Weofferawidechoiceofcoversatcost-savingcompetitiveratesthatarebackedbyafastandefficientprocessingandclaimshandlingsystem.Wealsoofferlosspreventionandriskmanagementservicestocomplementourproduct.

MSIG offers:• Cost-savingcompetitiverates.

• Awidechoiceofcover.

• Speedandefficiency.

• LossPreventionandRiskManagementservices.

• Localcontactsthroughouttheworld.

• Fairandefficientclaimshandling.

• Securityandreliability.

• Internationalreputationandexpertise.

MSIGhasanextensiveglobalnetworkofmarinecargoclaimssettlingagentscoveringtheregionsofAsia-Pacific,theAmericas,EuropeandAfrica.Kindlycontactusifyouneedfurtherinformationonourworldwideclaimssettlingagents.

*Source: ISM Statistical Bulletin 2011

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Scope of CoverMarineCargoInsurancecoverscargowhilstintransitandincludesstorageintheordinarycourseoftransit.

AlmostallmarinecargopoliciesaresubjecttothetermsoftheInstituteCargoClauses.The“Institute”meanstheInstituteofLondonUnderwriterswhichisatradebodyrepresentingalmost100internationalinsurancecompanies.TheClauseswhicharedraftedbytheInstituteareconsideredtobestandardtermsofcoverforMarineCargoInsuranceandareinternationallyacceptedandunderstood.

ThelatestversionoftheInstituteClauseswasmadeeffectivefrom1.1.2009.Theseclausesarenowwidelyusedinternationally.Thisnewversionupdatesthe1982clausesbyusingmorecommoneverydaylanguage.Someofthecoveragehasbeenexpandedtosuitthepresentdemandsofthechanginginsurancemarket.

The most commonly used clauses are:

INSTITUTE CARGO ClAUSES (A) OR INSTITUTE CARGO ClAUSES (AIR)Coversallrisksoflossordamagetothecargo.

INSTITUTE CARGO ClAUSES (B)Coverslossordamagecausedbythefollowingperils:a. Fireorexplosion.

b. Stranding,grounding,sinkingorcapsizingoftheship.

c. Overturningorderailmentofthelandconveyance.

d. Collision.

e. Dischargeofcargoataportofdistress.

f. Earthquake,lightningandvolcaniceruption.

g. Entryofsea,lakeorriverwaterintothevesselorplaceofstorage.

h. Packagestotallylostduringloadingorunloadingfromtheship.

i. Jettison.

INSTITUTE CARGO ClAUSES (C)Thisisarestrictivecoverwhichislimitedto:a. Fireorexplosion.

b. Stranding,grounding,sinkingorcapsizingoftheship.

c. Overturningorderailmentofthelandconveyance.

d. Collision.

e. Dischargeofcargoatportofdistress.

f. Jettison.

AllInstituteClausescoverGeneralAverageandSalvage.

Marine Cargo Insurance Underwriting (Cont’d)

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SpECIAl CONdITIONSSpecialClauseshavebeendraftedfortheinsuranceofcertaincommodities:a. InstituteCommodityTradesClauses(A)/(B)/(C)forcocoa,coffee,cotton,fatsandoils,hides

andskins,metals,oilseeds,sugarandtea.

b. InstituteBulkOilClauses.

c. InstituteFOSFATradesClauses(A)/(B)/(C)forcargoesshippedunderTheFederationofOils,SeedsandFatsAssociationscontracts.

d. InstituteFrozenFoodClauses(A)/(C).

e. InstituteFrozenMeatClauses(A)/(A24HoursBreakdown)&(C).

f. InstituteNaturalRubberClauses.

g. InstituteTimberTradeFederationClauses.

ExClUSIONSa. WilfulmisconductoftheAssured.

b. Ordinaryleakageorlossinweightorvolume,wearandtearofthegoodsinsured.

c. Insufficiencyorunsuitablepackingorpreparationofthegoods. Thisexclusionwillonlyapplyifthegoodswerepackedorpreparationwasdonebythe

Assuredortheiremployeesorwascarriedoutpriortotheattachmentoftherisk.d. Inherentviceornatureofthegoods.

e. Delay(evenifcausedbyariskthatwasinsuredagainst).

f. Insolvencyoftheshipowners/managers/charterers/operators. ThiswillapplyonlyiftheAssuredwasawareofthefinancialcircumstancesthatcould

preventthevoyage.g. Radioactiveornuclearrisk.

h. UnseaworthinessoftheshiponlyiftheAssuredisawareatthetimeofloadingofthegoods.

Duration of CoverCovercommenceswhenthegoodsphysicallystartmovingandcontinuesuntilitcomestoastopatthefinaldestination.YouneedtorefertotheTransit Clause 8togetthefulldefinitionofthecover.

Thewordingstatesthatcovercommenceswhenthegoodsarefirstmovedinthewarehouseorplaceofstorage(attheplacenamedinthecontractofinsurance)forthepurposeoftheimmediateloadingintoorontothecarryingvehicleorotherconveyanceforthecommencementoftransit,continuesduringtheordinarycourseoftransitandterminatesoncompletionofunloadingfromthecarryingvehicleorotherconveyanceinoratthefinalwarehouseorplaceofstorageatthedestinationnamedinthecontractofinsurance.

Astandardcargopolicyallowsamaximumof60daysor30daysifbyairtoreachthefinaldestinationifthereisasecondlegvoyagefromtheport/airportofdischarge.

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Extensions/Special ClausesINSTITUTE WAR ClAUSES (CARGO)/(AIR CARGO)Coverlossordamageresultingfromwarperilswhilstthecargoisatseaorintheair.TheexclusionsarethesameasfortheCargoClauseswiththeadditionalexclusionoffrustrationofthevoyage(i.e.noclaimispayableifthecargocannotbedeliveredorshippedbecauseofawar).

INSTITUTE STRIkES ClAUSES (CARGO)/(AIR CARGO)Coverlossordamagecausedbystrikers,rioters,terroristsorpersonactingfromapoliticalmotive.ExclusionsarethesameasfortheWarClausesbutthereisanadditionalexclusionregardingtheshortageorwithholdingoflabour.

ThedurationofcoveristhesameastheCargoClauses.

TRAdE TERMS Of SAlEInthetransactionofgoodsinternationally,asellerandbuyerwillbedealingwithpeopleindifferentpartsoftheworld.Itwouldbeconvenientifweallhaveacommonunderstandingonhowweshoulddobusinesstoensureasmoothdelivery.TheInternationalChamberofCommercebasedinPariscameoutwithauniformsetofrulesin1936whichgovernsthetradetermsofsales.MorecommonlyknownastheIncoterms,ithasbeenthroughafewversionswiththelatestin2010.TheIncotermsareusedin90%ofworldtradeandMalaysiantradefollowstherules.

ThepurposesoftheIncotermsareto:a. Dividethecostandrisksbetweenthesellerandbuyer.

b. Setoutthebasisofresponsibilityforpackingandaffreightment.

c. FormthebasisfordeterminingtheextentofMarineCargoInsurancerequired.

Withacleardefinitionofeachparty’sresponsibilities,therewouldbefewerproblemsinplanningandcarryingouteachother’sroleinthetransaction.

ItisnecessarytounderstandtherelationshipbetweenthesellerandthebuyerunderthedifferenttypesofcontractofsalebyreferringtotheIncoterms.


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COMMON INCOTERMS IN USETherearefivebasictypesofsalecontractswhicharemostcommonlyusedintrade.Theseare:

A. fOB (fREE ON BOARd) LetusstartwiththeexporterwhosellshisgoodsonFOB(FreeOnBoard).UndertheFOB

terms,theexporterwillnotincludethecostofmarineinsurancepremiuminhisquotationtothebuyerasthebuyerisexpectedtoeffecttheinsurancecoveragehimself.However,theexportermayberequiredtoeffectinlandtransitinsurancecoverwhilstthegoodsareintransitfromhispremises/warehousetotheportofloading.Thus,oncethegoodsareloadedonboardthevesselattheportofloading,theexporterwillnotberesponsibleforanylossordamageoccurredthereafter.

TheresponsibilitiesattachingtothesellerandthebuyerunderFOBtermsare:

a. TheSellermust:

1. Supplythegoods.

2. Packthemforthetransit.

3. Deliverthegoodsonboardthevessel.

4. Bearallcostsofrisksofthegoodsuntilsuchtimeastheyareonboardtheshipattheportofshipment.

5. Providetheusualdocumentsasproofofdeliveryofgoodsonboardthevessel.

6. Notifythebuyerwithoutdelaythatthegoodshavebeendeliveredonboardthevessel.

b. TheBuyermust:

1. Bearallcostsandrisksofthegoodsfromthetimetheyareonboardtheshipattheportofshipment.

2. Paythepriceasprovidedinthecontract.

Fromtheabove,itwillbenotedthatitema.6 requiresthatthesellermustnotifythebuyerwithoutdelaythatthegoodshavebeenshipped.Thisistoallowthebuyertoarrangeaninsurancetocoverthegoodsfromthetimetheybecomeatthebuyer’srisk.Theinsurancearrangedbythebuyerwouldonlycommencewhenthegoodsareloadedonboardoftheship.Itwouldnotcoverfromthetimetheyleavetheseller’swarehouse.

B. CIf (COST, INSURANCE ANd fREIGhT) UndertheCIF(Cost,InsuranceandFreight)terms,theexporterwillquotetothebuyerthe

costofthegoodsplusmarineinsuranceforthedurationofthejourneyofthegoodsuntilthegoodsaredischargedattheportofdestination.Theexporterwillthenassignthemarinepolicytothebuyersoastoprotectthebuyerforthattransit.Buyercannegotiatewiththeexportertoarrangeforthemarineinsurancecoverageuptothefinaldestinationorhecanarrangeaseparatemarineinsurancepolicytocoverthetransitfromtheportofdischargetohiswarehouse.

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UnderCIFterms,thefollowingaretheresponsibilitiesattachingtothepartiesinvolved.

a. TheSellermust:

1. Supplythegoods.

2. Packthemfortransit.

3. Arrangeathisownexpensetheshipmentofthegoodstothenamedportofdestinationandpaythefreightcharges.

4. Bearalltherisksofthegoodsuntilsuchtimeastheyareonboardtheshipattheportofshipment.

5. Provideathisownexpenseapolicyofmarineinsuranceintermsusualinthetrade.

6. Presenttheusualdocuments–Invoice,cleanBillofLadingandMarineInsurancePolicyforacceptancebythebuyer.

Fromtheabove,itwillbenotedthatitema.4requiresthesellertoberesponsibleforthegoodsonlyuntiltheyareonboardtheship.ThisprovisionisthesameasinthecontractofsaleonFOBterms.However,thepolicyofmarineinsurancewhichthesellermustprovidewillprotectthesellerduringtheperiodthegoodsareathisriskanditwillthenbeassignedsoastoprotectthebuyerforthetransit.

C. CIp (CARRIAGE ANd INSURANCE pAId TO) AcontractonCIP(CarriageandInsurancePaidTo)termsisidenticalwithaCIFcontract

exceptthattheexporterisresponsibleforthegoodsuntilthegoodsaredeliveredtothenameddestinationandthenmustarrangethemarineinsuranceforthewholedurationofthejourneyofthegoods.Hewillthenassignthemarinepolicytothebuyersoastoprotectthebuyerforthetransit.

d. CfR (COST ANd fREIGhT) AcontractonCFR(CostandFreight)termsisidenticalwithaCIFcontractexceptthatthe

responsibilityforinsuranceisuponthebuyerandnottheseller.Thegoodsarestillattheriskoftheselleruntiltheyareonboardtheshipandhemaychoosetoinsurethegoodsforthatperiodorhemaychoosenotto.ThebuyerwillarrangeinsuranceassoonashereceivesnotificationoftheshipmentinasimilarmannerasunderanFOBcontract.

E. ExW (Ex WORkS) Thisplacesthemaximuminvolvementofthebuyerinthearrangementfortheconveyance

oftheconsignmenttothespecifieddestination.Theseller’sdutyistomakethegoodsavailablebyanagreeddateathisfactoryorwarehouse.Thesellerminimiseshisobligationswhilstthebuyerobtainsthegoodsatthelowestprice.Thebuyermusthaveaccesstotherightconnectionsintheseller’scountry.Usually,thebuyerappointsanagenttohandlethecollectionofthegoods,transportation,insuranceanddocumentationarrangements.


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RESpONSIBIlITY Of ARRANGING fOR INSURANCETheresponsibilityofarrangingforMarineCargoInsuranceininternationaltradecanbesummarisedasfollows:

Seller Buyer

FOB ✓

CIF ✓

CIP ✓

CFR ✓

EXW ✓

The Advantages of Importing on FOB/CFR/EXWWhenanimporterbuysonFOB,CFRorEXW,theresponsibilityofinsuringthecargofallsontheimporter.Bytakingcontrolofthearrangementofmarineinsurancecover,thereareconsiderableadvantagestobegainedbytheimporterwithlittleornoextrawork.

dOUBlE TAx dEdUCTION BENEfITSToencouragethedevelopmentofmarinebusinessinMalaysia,theGovernmenthas,in1982,introducedthedoubletaxreliefforpremiumsincurredonallimportsonFOBorCFRorEXWtermswheretheinsuranceistakenupwithaMalaysianincorporatedinsurer.In1995,similarincentivesweregiventoexportshipmentsaswell.

COMpREhENSIvE COvERAGEImporterscanbeassuredofcomprehensivecoveratcompetitiverateslocally.

fASTER ClAIMS SETTlEMENTImportersaredealingwithestablishedinsurerslocallyandclaimscanbeassessed,negotiatedandsettledquickly;ratherthanreferringbacktotheoverseasinsurer.

EASY AdMINISTRATIONAnyextensionofcoveroramendmentscanbeeasilyarranged.

lOSS pREvENTION TEChNIqUESMSIGcanofferpracticaladviceonlossprevention,packingandshippingmethodstohelpcustomerseliminatelossesorminimisetheirextent.

Note: Please refer to pages 8 and 9 for more information on FOB, CFR and EXW.

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The Advantages of Exporting on CIF/CIPWhenanexportersellsonCIForCIP,theresponsibilityofinsuringthecargofallsontheexporter.Thefollowingaretheadvantagesfortheexporter:

dOUBlE TAx dEdUCTION BENEfITSDoubletaxreliefforpremiumsincurredonallexportsonCIForCIPtermswheretheinsuranceistakenupwithaMalaysianIncorporatedinsurer.

COST SAvINGExporterscanusethevolumeofbusinesstonegotiateforcomprehensivecoverageatcosteffectiverates.

AN AddEd vAlUE SERvICE fOR YOUR CUSTOMERSThereisnoneedforyourcustomerstodoanything,asinsurerswilllookaftertheinsurancearrangementsontheirbehalf.

OvERSEAS REpRESENTATIONClaimsarisingfromoverseasaredealtbyMSIG’sofficesorappointedrepresentativesonthespot.

Note: Please refer to pages 8 and 9 for more information on CIF and CIP.

Sum InsuredTheamountforwhichgoodsareinsuredandwhichformsthebasisofsettlementinanyclaimisgenerallybaseduponthefollowingformula:

COST, INSURANCE ANd fREIGhT plUS 10%

Thisformulaisinstandarduseininternationaltradepractice.IfitisusedinanOpenCoverorAnnualPolicy,itisreferredtoasthe“BasisofValuation”.

Costisthevalueofthegoods,usuallytheinvoicevalue.

freightisthecostofshippingthegoodstothefinaldestination.Often,thesechargesareincludedintheinvoiceprice,butthismaynotalwaysbethecase.

Insuranceisthepremiumpayablefortheparticularshipment.

“plus 10%”isintendedtocoverextracostswhichtheAssuredmayincurwhenshippingthegoods,butwhichmaybedifficulttoquantify.Forexample,thereareadministrativecostsincurredbytheAssuredinorderingthegoodsandarrangingshipment.ItisintendedtocovertheAssuredforunforeseenorunquantifiablecostsanddoesnotcoverlossofprofit.


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Example:

RM

InvoiceValue(inclusiveofcost,freightandinsurancepremium) 800,000

10% 80,000

Sum Insured 880,000

PremiumPremiumratesarechargedaccordingtoMSIG’sassessmentoftherisk.AnindicationofwhethertheratewillbehighorlowwilldependontheUnderwritingCriteria.

Thepremiumrateisappliedtotheinsuredvalue.

Underwriting CriteriaTheamountofinformationweneedbeforewecanquotecanbeverywide,butitisvitalforoneverygoodreason;themoreinformationwehave,thebetterourunderstandingandthemorecompetitiveourpremium.

Wethereforeneedfullmaterialfactsasoutlinedbelow.Ifyouhaveanyqueries,pleasecontactus.

A. ThE GOOdS Asmuchdetailsaspossiblewillhelpusmakeadecision,butattheveryleast,werequirea

concisedescriptionofthegoods,i.e.fruits,metalsheets,garments,etc.

B. METhOd Of pACkING Roughhandlingisthelargestsinglecauseofmarinecargoclaims.Forthisreason,weneedto

knowasmuchdetailsaspossibleaboutthepackingsothatwemayassessthelikelihoodofdamageaffectingthecargo.Furthermore,asmentionedearlier,theInstituteClausesexcludelossesarisingfrominsufficientorunsuitablepacking.Ifwearegivenfulldetailsofthepacking,notonlycanwemakeabetterassessmentofthepremium,butwemayalsobeabletoofferadviceonlossprevention.

C. ThE vOYAGE Detailsofthevoyageareimportanttoallowustoassesstherisks.Thelongerthevoyage,

themorehazardousitmaybe.Somecountriesareriskierthanothers.Ifthecargoistobetransshipped,wewillalsoneedtoknowaboutthis.

d. METhOd Of TRANSIT Itisveryimportantthatweknowhowthegoodswillbeshipped,bysea,airorland.Inmany

instances,cheaperratesmayapplytoairtransportorcertaintypesofvessels.

Forindividualvoyages,wewillneedtoknowthenameofthevesselsincetheage,typeandqualityoftheshipwillhaveamajorimpactonthelikelihoodoflossandtherefore,inthepremiumcharged.

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E. ThE AMOUNT TO BE INSUREd Forindividualshipments,thiswillbethesuminsuredarrivedatbytakingtheCost,Insurance

premiumandFreightplus10%whichwasexplainedearlier.

ForOpenCoversandAnnualPolicies,weneedtoknowtheestimatedannualturnoverforthefirst12monthsofthecover.Inaddition,theOpenCoverorAnnualPolicywillbesubjecttoanoveralllimitofanyoneshipment.Forthisreason,weneedtoknowthemaximumvalueofgoodslikelytobeshippedatanyonetime.

f. ClAIMS ExpERIENCE Weneedtoknowaboutlossessufferedinthepast,eveniftheywerenotclaimedforagainst

aninsurancepolicy.Itisbestifthisinformationcanbeobtainedforthelast3or5years.

Rememberthattwoclientsinvolvedinthesametrademayhavecompletelydifferentclaimsexperiencebecausemanagementandqualitycontrolarebetteratonecompanythananother.Onlybyfindingoutthisinformationcanwemakeanaccurateassessmentofthepremiumbasedontheperformanceofaparticularclient.Wemayalsobeabletoofferusefuladviceonlossprevention.

RiskLe

vel High

#OldshipfromMalaysiaheadingtowardstheUnitedStatesviaSingapore carryingceramicandporcelainplates

LowNewshipfromMalaysiaheadingtowardsHongKongcarryingplastic containersandplasticplates

Note: The table above shows a comparison of risks involved.

Refer RisksAsanintermediaryordirectclient,youdonothaveanyauthoritytoquotefororacceptmarinecargobusiness.Therefore,anyenquiryyoureceivemustbereferredtous.

Generallyspeaking,wearepreparedtoquotetermsforalmostanytypeofcargoorvoyage,butobviously,therewillbeinstanceswhenwedonotwishtoofferterms.However,pleasedonotassumethatwewillnotwishtoquoteforaparticularriskbecause,asmentionedabove,oneriskmaybecompletelydifferentfromanotherforavarietyofreasons,eveniftheyareinthesametrade.


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Types of Marine PoliciesMSIGoffersdifferentcoversorpoliciestosuittheneedsofdifferentclients.

A. SINGlE pOlICIES Theseareissuedindividuallyforeachshipment.Theycanbefullpolicydocumentswith

appropriateclausesattachedor,simplePoliciesorCertificatesofInsurance.

Thesepoliciesaremostappropriateforclientswithinfrequentshipments.

B. OpEN COvERS Thisisapermanentcoverwhichdoesnotneedtoberenewed.Wewillautomaticallycoverall

shipmentsfallingwithinthescopeofthecover.

Thereisnofixedsuminsuredandthevalueforeachshipmentiscalculatedaccordingtothe“basisofvaluation”.RatesareagreedatinceptionandareshownintheOpenCover.Thecoverissubjecttoanoveralllimitinrespectofanyonevessel,locationorloss,butthislimitcanbeamendedifnecessary.

Asandwhengoodsareshipped,theAssuredcompletesadeclarationorissuesaCertificateofInsuranceandsubmitsittous.Wewillcalculatetheappropriatepremiuminaccordancewiththeratessetoutinthecoverandtheinsurancewillbedebitedaccordingly.

OpenCoversaremostappropriateforclientswhohavefrequentshipments.

C. ANNUAl pOlICIES TheseareOpenCoversbutissuedforaperiodoftime,usually12months.Theycoverall

shipmentswithinthescopeofthepolicyattheratesandconditionssetoutinthepolicy.

AdepositpremiumbasedontheestimatedannualvalueofshipmentsispaidatinceptionandthisisadjustedattheendoftheyearinaccordancewiththeactualvalueofshipmentsdeclaredbytheAssured.

Thereisverylittleadministrationinvolvedwiththesepoliciesandtheyarebestsuitedforclientswithalowvolumeofshipments.TheyareparticularlyusefulwhereCertificatesofInsurancearenotrequiredbut,evenso,Certificatesmaystillbeissuedifrequired.

d. INlANd TRANSIT Incaseswheretheclienttransportsgoodsdomesticallyinlandusingownvehiclesorare

carriedbyprofessionalcarriers.Anannualpolicychargedupfrontcanbeissuedwithasetlimit.

Business OpportunitiesThereareplentyofbusinessopportunitiesinMarineCargoInsurance.Youmayhavepotentialclientswhoareinvolvedintradingormanufacturingwhowillneedinsurancefortheirimports,exportsandinternaldistribution.

Cargoinsuranceprovidestheintermediarywiththeopportunitytohaveregularcontactwithclientsbecauseofthefrequencyofmarineshipments.Incargoinsurance,thereisno“annualexpirydate”whichmeansyoucandiscusswithyourclientsatanytimeduringtheyear.

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Ourbusinessfocusrangesfromsmallandmediumsizedindustries(SMIs)tolargemultinationalcorporations.IntermediariesmaywishtoconcentrateonSMIswhereyouareinanadvantageouspositiontoprovidevalue-addedservice.

MSIG’s Experience in Commodities CoveredBelow are some of the commodities where the experience has been favourable to us and of which we wish to expand upon:

AUTOMOBIlESCompletelyKnockedDown(CKD)CompletelyBuiltUp(CBU)

ChEMICAlSAdhesivesAerosolsDetergentsHouseholdChemicalsPalmOilProductsPetroleumProductsSolvents

CONSUMER GOOdSCosmetics&ToiletriesFootwearHouseholdAppliancesHouseholdGoodsKitchenEquipmentLighting&FittingsPharmaceuticalsSoaps&ShampoosStationery

fOOdSBeverages(non-alcoholic)BiscuitsConfectioneryNon-refrigeratedFoodsSaucesSeasoning&CondimentsSnackfood

lIGhT MAChINERY/ lIGhT INdUSTRIAl GOOdSAgriculturalMachinery&PartsAirConditionersAutomobilePartsBicyclesCompressorsElectrical&ElectronicProductsIndustrialMaterials

LightMachineryMachinePartsMedicalEquipmentMotorAccessories

METAl pROdUCTSAluminiumProductsFabricatedMetalProductsSteel&SteelProducts

pApER pROdUCTSBooksBoxesCartonsNewsprint

plASTICSFibreGlassProductsFurnitureResinsSemiFinished&FinishedPlasticGoodsToys

RUBBER GOOdSGlovesRubberProductsTyres&Tubes

TExTIlESClothesFabricsWearingApparel

WOOdEN pROdUCTSFurniture(CKD)Sawn,MouldedTimber(ProvidedContainerised)Plywood(ProvidedContainerised)

Note: Please contact MSIG for further details on other commodities not listed above.

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Marine Cargo Insurance Claims Guide

Important Policy Claims ConditionsIt is the duty of the Assured andtheirservantsandagentstotakereasonablemeasuresforthepurposesofavertingorminimisinglossandalsotoensurethatallrightsagainstCarriers,BaileesorotherThirdPartiesareproperlypreservedandexercised.

Inparticular,theAssuredortheirservantsandagentsarerequired:• ToclaimimmediatelyontheCarriers,PortAuthoritiesorotherBaileesforanymissingor

damagedcargo.

• ToensurethatallrightsagainstCarriers,PortAuthoritiesorotherBaileesareproperlypreservedandexercised:

– ServesNoticeofClaimtoShippingAgentwithin3 daysfromdateofreceiptofcargo.

– ServesNoticeofClaimtoPortAuthorityandForwardingAgentsassoonaspossible,preferablywithin3 daysfromdateofreceiptofcargo.

– ServesNoticeofClaimtoAirlinewithin14 daysfromdateofreceiptofcargo.

• Innocircumstances,exceptunderwrittenprotest,togivecleanreceiptswheregoodsareindoubtfulcondition.

• Whendeliveryismadebycontainer,toensurethatthecontaineranditssealareexaminedimmediatelybytherespectivepersonnel.

• ToarrangefortheSurveyAgentnamedinthepolicytoconductasurvey.IntheabsenceofanynamedAgent,theclaimantshouldinformMSIGofthelossordamage.

• Tosubmitallavailabledocumentswithoutdelayincluding,butnotlimitedto,thosementionedunderthedocumentschecklistinTable1(Pleaserefertopage20).

Claims Procedures1. A lOSS/dAMAGE IS ExpERIENCEd UponreceiptoflossadvicefromAssured/Consignee/thesettlingagents,getdetailsofthe

typeoflossordamagewiththepolicydetails.

ItisinorderfortheAssured/Claimanttoappointthesurveyagentsasstatedinthepolicyschedule.

Inaddition,itwouldbenecessarytonotifyMSIGoftheloss/damage.

2. NOTIfICATION Of lOSS TO MSIG Uponreceiptofyournotification,MSIGwillfurthercommunicatewithyouindeterminingifa

surveyorisrequiredtoconductasurveyoftheloss/damage.Otherwise,MSIGmayrequestforfurtherdocumentationtoprocessyourclaim.

Duringthetimeofnotificationofloss,theAssuredshould,wherepossible,fax/submitthebasicsupportingdocumentsasperTable1(pleaserefertopage20).

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3. AppOINTMENT Of SURvEYORS/AdjUSTERS Shouldasurveybenecessary,MSIGwillmakearrangementstoappointthesurveyorwhowill

inturncommunicatewithyouinsecuringtheappointmentvisit.

4. ClAIM NOTICE TO CARRIERS ItisimportantthattheAssuredberequiredtosubmitaClaimNoticetotherelevantparties

withinthestipulatedtimeframeinpreservingtheInsurer’sinterestaswell.CopiesoftheNoticesshouldalsobesubmittedtoInsurers.

5. COMpIlING ANd SUBMITTING ClAIM dOCUMENTS Furthersupportingdocumentsspecifictotheloss/damagemayberequestedfromeitherthe

InsurerortheappointedsurveyorinwhichtheAssuredisrequestedtoco-operateandfurnishtofurtherprogresstheclaimprocess.

Oncecompiled,youaretosubmittherequesteddocumentstotherequestingpartiesforfurtherprocessing.

6. dOCUMENTATION

i. The consignee or the Assured must lodge the claims against all parties involved in the conveyance immediately:

a. TheTransportCompany.

b. ThePackagingCompany.

c. TheForwardingAgent.

d. TheShippingAgent.

e. ThePortAuthorities.

ii. All replies must be obtained and forwarded to MSIG together with the following:

a. OriginalPolicy/CertificateofInsurance.

b. OriginalBillofLadingand/orcontractofcarriage(bothsides).

c. PortAuthorityInwardorOutwardSurveyReport/DeliveryNote/PortDeliveryList/AirlineDeliveryOrder.

d. Ship’sLog/SeaProtest.

e. JointSurveyonBoardReport/Carrierloading/DischargeTallysheet.

f. Assured’s/Consignee’sClaimBill.

g. Assured’s/Consignee’sclaimsagainstallresponsiblepartiesandtheirreplies.

h. Shipping/Supplier’sinvoicetogetherwithshippingspecificationand/orweightnotes.

i. PackingList.

j. LorryConsignmentNote(whereapplicable).

k. TallySheets.

Marine Cargo Insurance Claims Guide (Cont’d)

18

iii. Dates of arrival/delivery/application for survey

Checkthenumberofdaysbetweenthedateofarrivalofthecarryingvesseltothedateofclearancefrom:

a. TheShip

b. ThePortAuthorities

c. TheCustom’sWarehouse

todeterminewhetherthereareunreasonabledelays.

Note: Any loss/damage due to delay is not covered by the Policy.

iv. Packing

Checkthesurveyreportonthetypeofpackingorthesuitabilityofthepacking.

v. Marking

ThesurveyorwillcheckthisagainsttheBillofLading,theinvoice,thepackinglistandthepolicy/certificatetoascertainthecorrectnessoftheconsignmentinvolved.

vi. Documentation

a. ThePolicy/CertificateofInsurance

Asthedocumentisassignableandconveystherighttomakeaclaim,insistontheoriginalpolicy/certificate.

Iftheoriginalpolicy/certificateismisplacedorlost,requestforthesubmissionoftheLetterofIndemnitywherebytheclaimantpromisestoreimbursetheCompanytheclaimamountifthereissubsequentclaimmadebyanotherpersonsupportedbytheoriginaldocument.

b. BillofLading/ConsignmentNote/AirwayBill

TheBillofLadingisproofofshipment,proofofreceiptforgoodsonboardandproofofthecontractofcarriagebetweenthecarrierandtheshipper.

Alwaysinsistsontheoriginalcopysincethecarrierswouldinsistonthiswhendealingwithsubrogationrecoveryclaimsfrominsurers.

Consignmentnoteisissuedwhencargoiscarriedbyroad.Thisconsignmentnoteissignedondeliveryandclausedtoshowanydamageorshortageduringtransit.

c. Invoice

Theinvoiceissuedbythesellerofgoodsprovidedetaileddescriptionofthegoods.Comparethedetailswiththatofthepolicyandthebillofladingtoseeifthegoodsidentifiedintheinvoicearethoseshipped.

Theinvoicevaluecomparedtotheinsuredvaluewouldenableustodetermineover-insurance,thus,avoidingpayingtheclaimantsmorethanwhatwasactuallyshipped.

d. PackingList

Providesabreakdownoftheconsignmentshowingthenumberofunitsshippedineachpackagealongwiththeirweights.

19

e. TheClaimBill

ThisactsastheAssured’s/Consignee’sformalclaimtoinsurersandshouldbepresented.

Itshouldcontain:

– Theclaimcalculated.

– ThesurveyfeespaidbytheAssuredifapplicable.

Thecorrectnessofthecalculationshouldbecheckedagainsttheinvoices,thesuminsuredandthepolicytermsagreedwiththeAssured.

vii. Assessment of Claim

OncetheInsurerortheSurveyorreceivestherequesteddocuments,theywillthenbegintoverifyandassessthelossbeforearrivingatthefinaldecisionastowhetherthepolicyrespondsandifitdoes,thefinalquantumtosettletheloss/damage.

Intheeventthatasurveyor/adjusterisappointed,theywillinturnsubmittheirfinalfindingsfortheInsurer’sfurtherapproval.

Assuredshouldnotethatshouldtherebeanyfurthersupportingdocumentsrequiredtofinalisetheclaim,therelevantpartywillfurtherrequestandyouaretogiveyourutmostco-operationinfurnishingthesaiddocumentrequested.

viii. Claims Settlement

OncetheInsurerapprovestheclaimsubmitted,aLetterofSubrogationandcoveringletterstatingtheofferamountwillbesenttoyouforyouracceptanceanddischarge.

UponreceiptofthesignedLetterofSubrogationbytheInsurer,theInsurerwillthenpreparethesettlementchequetoconcludetheclaim.


20

Table 1 – Basic Documents Checklist when Submitting ClaimBY TYpE Of ClAIM/NATURE Of lOSS

Marine CargoImport & Export

InlandTransit

No Type of Document Damage Shortage/Non-Delivery Required

1 OriginalPolicy/CertificateofInsurance ✓ ✓ ✓

2OriginalBillofLadingorAirwayBill(bothsides)/ ConsignmentNote ✓ ✓

3 CommercialInvoice ✓ ✓ ✓

4 PackingList ✓ ✓ ✓

5 ClaimBill ✓ ✓ ✓

6 Pre-shipmentsurveyreport ✓ ✓

7 Photographsdepictingdamage ✓

8 IndependentSurveyreport(ifrequired) ✓ ✓

9 Forwardingagentdeliveryorder(original) ✓ ✓ ✓

10Correspondencesholdingvarious partiesresponsible ✓ ✓ ✓

11 ExtractfromShipLogifbadweatherloss ✓ ✓

12 Policereport(formotorvehicleaccidentorhijack) ✓

13 EquipmentInterchangeReceipt(EIR) ✓ ✓

14 DamageInspection/Testreport(machinery) ✓

15 Repair/replacementquotation/invoices ✓

16QCreportonquantitiesrejectedandreasons forrejection(whereapplicable) ✓

17 OriginalPortIntegratedImportDocument ✓

18 PortDeliveryListorAirlineDeliveryOrder ✓

19 PortAuthorityInward/OutwardSurveyReport ✓

20 CarrierLoading/DischargeTallySheet ✓

21 ContainerTerminalStuffingTallySheet ✓

22 UnstuffingTallySheet ✓

23 WrittenconfirmationofNon-Deliveryfromcarrier ✓

Note: The above listing of documents to support a claim is not conclusive as there may be other documents that may be requested depending on circumstances of each claim. You are required to co-operate and furnish the documents when requested.

21

Answers to Your Frequently Asked Questions1. Is the import duty claimable under the policy? Theimportdutycanonlybeclaimedifitisseparatelyinsured.

2. Can the customer keep the cargo in a warehouse at the port after discharge from the ship until required for sale?

Thecustomermustclearthecargoimmediatelysincethepolicycoveragewillbeterminatedoncethegoodsaredeliveredtothewarehouse,unlessspecificallystatedinthepolicy.

3. What is CIF? Bydefinition,itmeanscost,insurance,freightwherebythepriceofgoodsincludesthecostof

goodstogetherwithinsuranceduringtransitandthefreighttotheportofdestination.

(Please refer to pages 8 and 9 for more information)

4. What is FOB? Bydefinition,itmeansFreeonBoard.Theinsuranceofthegoodsintransitwillbepurchased

bythebuyerandnottheseller.Theseller’sresponsibilityendsuponloadingthegoodsonboardthevessel.

(Please refer to page 8 for more information)

5. What is the difference between the different Institute Cargo Clauses? Coverageinbrief: ICC(A) – AllRisksinsuranceexcludinglossesfallingwithinexclusion4–7oftheClauses. ICC(B) – Morespecifiedcover(expressed)wherebyanyrisks/perilsnotspecifiedarenot

intendedforcover. ICC(C) – SimilartoICC(B)wherebyitisaspecifiedcoverbuttheperilscoveredaremore

limitedthanICC(B).

(Please refer to page 5 for more information)

6. Who has the primary responsibility of proving the loss? TheonusofprooflieswiththeAssured/Claimant.

7. Who is responsible for recovery or salvage? Primarydutyiswithyoutomitigateandminimiseeachloss.

8. Who shall my customer at final destination contact in the event of a loss? Yourcustomeristocontactthenominatedsurvey/settlingAgentsstatedintheMarinePolicy

orCertificateofInsurance.

Note: This claims guide only serves as a general guide whereby the terms and conditions of each policy will have to be considered when processing each claim. Therefore, this guide is not intended to be a conclusive guide and where any ambiguity or uncertainty arises, the contractual agreement of the policy will be binding or depended upon.


22

Assured/Agent*/Consignee/Claimant

Start

Loss/Damage Experienced by Assured/

Consignee/Claimant

Notification of Loss to Insurer or Agent*

Claim Notice to Carrier

Compile Requested Documents

Submit/File Claim to MSIG/Surveyor

MSIG

Receive Claims Notification

Appoint Surveyor

?

Assessment of Claim upon receipt

of requested documents

Claims Settlement (O�er & Acceptance)

End

Surveyor

Surveyor appointed to survey

Loss/Damage

Assessment of Claim upon receipt of

requested documents

Submit Final Findings to Insurer

No

Yes

*Agent means the stated MSIG Survey/Settling Agent.

Overall Marine Claims Proceduresand Settlement Workflow

23

Marine Cargo Insurance Loss Prevention Guide

IntroductionRiskcontrolandlosspreventionmeasureswillhelpsafeguardyourtradingrelationshipswithbothoverseasandlocalmarkets.

Asuccessfullosspreventionprogrammewillensurecompetitivepremiums,meetingofproductiontargetsandasavinginadministrativecost.Itwillalsoensurethatyouwillbeabletocontinuetoprovidevalueandremainontopoftoday’sincreasinglycompetitiveglobalbusiness.

Prevention is Better than CureThefarthergoodstravelfromhome,thegreatertherisk.Shouldalossoccur,thefrustrationisnotjustwiththevalueofthecargoitself–itisalsothelossofgoodwillandallthoseextrahoursofwork,whichcanneverberecovered.

Ifyoutakeafewsimpleprecautions,mishapscanbekepttoanabsoluteminimum.Thiswillsaveeverybodytimeandmoney,andhelptosustainyourcompetitivepositioninthemarket.

MSIG’s Loss Prevention and Risk Management ServicesOurservicesdonotendbyjustprovidinginsuranceprotectiontoourcustomers.Wegofurtherthanthis.

With our in-house loss control resources and our partners we can provide the following services:

Helpyouidentifythetransporthazardsyouwillface.Insurancealonewillnotprotectyoufromlossofgoodwillandyourestablishedbusinessreputation.Wewillworkwithyoutoseetheexposuresandhowtoovercomethem.

Giveyouadviceonthepreparationofyourcargobeforetransit.Wecanhelpyouminimisetheft,ensuresaferwaysofhandlingandstowageofcargo,andpreventionofwetdamage.

Iftheinevitablehappensandyourcargoisdamaged,wecaninvestigatethecauseofthelossandgiveyouadviceonimprovingyourmethodoftransportorthepreparationofthecargo.

Wecanadviseyouonvesselselection.Themajorcauseofmaritimefraudistheuseofdubiousvessels.Wehaveresourcesthatallowustocheckonthebackgroundofvesselsandthepreviousvoyagesmade,thusminimisingdocumentaryand“rustbucket”fraud.

Marine Cargo Insurance Loss Prevention Guide (Cont’d)

24

Safety SymbolsAlthoughcargohandlinginstructionsshouldalwaysbeaddedinthelanguageofthedestinationcountry,itisnotunusualforshipmentstobehandledbyanothercountryenroute,orbycargohandlerswhoareunabletoread.

Tosolvethesepotentialproblems,thefollowingsymbolsareacceptedasinternationalmarkings:


25

Causes of LossItalwaysmakesabigimpactwhenwereadaboutlossesthatinvolveamajorcatastrophesuchassinking,collisionandheavyweatheratsea.Suchlossescanbeattributedtotheselectionofthevesselandthehazardsofthesea,whicharesomewhatbeyondtheshipper’scontrol.Intermsofworldwidelossesofcargo,thelossesdescribedmakeupabout20%ofthetotal.

Thebiggerpictureistheoftenneglected80%ofthelossesdescribedbelow.Toacertainextent,thesetypesoflossescanbecontrolledwithsomeeffortputinbytheshipper.

ThEfT pIlfERAGE ANd NON-dElIvERY• Burglaryandrobberyatwarehouseorintermediatestorage.

• Hijackingofvehiclesontheroad.

• Hijackingofshipsloadedwithcargo.

• Usingforgeddocumentstotakecustodyofcargo.

• Deliberatemis-routingornon-deliveryofcargo.

CONTAMINATION• Negligentmixingofcargoesduringloading/discharge,e.g.chemicals,oils.

• Containers,tanksorpipeswithresiduesofpreviouscargo.

• Incompatiblecargostorageinsamecontainerorhold,e.g.foodstuffstoredwithchemicals.

WATER dAMAGE• Exposuretorainandseawater.

• Improperpreparationofcargoagainstchangingatmosphericconditions.

• Defectivecontainerswithholesordamage.

• Condensationfromshiporcargo.

• Inundationbywaterduringstorage.

BREAkAGE• Humanerrorduetopoorhandling.

• Improperuseofforkliftduringloading/discharge.

• Improperpackingorpreparationoffragilecargo.

fIRE• Fireatwarehouseoronboardships.

• Smokeandresultantdamagecausedbyfirefighting.


26

dETERIORATION• Breakdownofrefrigerationequipment

• Humanerrorinhandlingequipment

• Delay

Prevention of LossYou can safeguard against the following losses in the following ways:

ThEfT, pIlfERAGE ANd NON-dElIvERY Alwaysuseareputablecarrier.Makesurethatyourcargoistransportedviathemostdirectroute.

Ifvaluable,encodethecargodescriptionandchangeitregularly.

Clearlysetoutdeliveryinstructionsusingindelibleink.IfthecountryofdestinationisnotEnglishspeaking,includeanappropriatetranslationofalldirections,togetherwiththeappropriateinternationalsymbols.

Completealldocumentationaccuratelyanddispatchitpromptly.Rememberthatpapershavetomeettherequirementsofbothimportingandexportingcountries.

Whereverpossible,transportcargoindoor-to-doorcontainers.

Ensurethatyouandyourconsigneestakepromptdeliveryofanyshipments.Makesurethatyouprovidethemwithdeliverynotice,andinsistuponadvancenoticefromyoursupplierstoo.

Avoidsecond-handpackaging.Previousnailholesandstrapmarksmakeitdifficulttodetectifpilferinghasoccurredenroute.

CONTAMINATION Ifatalllikelytooccur,makesurethatthetransportersknow,andtakestepstoavoidit.

Checkcontainersforpreviouscargoresidue,bothvisuallyandbysmell.

Ifyourproductislikelytocontaminateothercargo,notifyallpartiesresponsibleforshipping.

WATER dAMAGE Checkcontainersforsignofholesordamage.Containersgetdamagedthroughusage.Ifpossible,conductwaterproofingtest.

Ifnecessary,usedesiccants(moistureabsorbents),corrosioninhibitorsorwaterproofwrappings.

Covercargoontopandsideswithwaterproofmaterial.Restcargoonskidsorpalletstokeepitabovecollecteddrainage.

Ensurethatcratesandotherlargecontainershavedrainageholesinthebottomforcollectionofwaterwithinthepacking.


27

BREAkAGE ANd OThER dAMAGE Shiftinginstructionsshouldbeclearlymarkedonatleastthreesurfaces.Ifcargohasanunbalancedweightdistribution,makesurethatthecentreofgravityisclearlymarked,togetherwithliftingandslingingpoints.

Containersshouldbeabletowithstanda40-degreeroll.Avoidsparespaceinpackagingasitallowsthecargotoshift.Palletsshouldbecorrectlystackedtoavoidcollapse.

Ifaproductisfragile,makesurethatthisisclearlyindicatedonitspackaging.

Supervisetheloadingandstowageoflarge,awkwardobjectsbysurveyors.

Donotexceedtheratedcapacityofthebox,crateorcontainer.

UsecautionarymarkingsbothinEnglishandinthelanguageofthecountryofdestination.Usetheinternationalpictorialmarkings.

Unitise,palletiseorassemblecargointothelargestpracticalunit.Thesizemustbeconsistentwithhandling,weightanddimensionlimitationattranshipmentpointanddestination.

Containerised Cargo and Loss PreventionContainerisationisamethodofdistributingcargoinaunitisedform.Inviewofitsstandardisedsizes,itallowsanintermodaltransportsystemtobedeveloped.Thesameboxofcargocanbetransportedbyacombinationofroad,rail,canalandsea.

vARIOUS AdvANTAGES IN ThE fORM Of lOSS pREvENTION CAN BE OBTAINEd ThROUGh CONTAINERISATION:• Nohandlingofcargoattransitpointsandintermediatepointsmeansquickertransitsandless

riskofcargodamageandpilferage.

• Itallowscargotobepackedbythesuppliersandarrivestobeunstuffedbythefinalconsignee.

• Lesspackingneeds,e.g.tanks.

• Containerstructureprotectsthecargoinside.

SOME RUlES fOR lOSS pREvENTION WhEN USING CONTAINERS:• Selecttherighttypeofcontainerforthegoods.

• Inspectthecontainertoensureitisingoodcondition.Checkforanyleaks.

• Packgoodstowithstandthemostextremepartofthevoyage.

• Avoidmixingincompatiblecargo.

• Stowandsecurethegoodsinthecontainertopreventmovementanddamagetothegoods.

• Forventilatedcargo,ensureairflowisunrestrictedandairventsareopenandclear.

• Documentthecontainercontents.

• Recordthecontainerandsealnumbersonshippingdocuments.

• Covercargoadjacenttodoorswithwaterproofmaterialstoprotectcargofromwateringressthroughdoorgaskets.

• Lockandsealthecontainer.


28

Using a Freight ForwarderThesedaysmanyorganisationsdonotgetdirectlyinvolvedintheprocessingandmovementofgoods.Theyleaveitinthegoodhandsofafreightforwarder.

Thestandardofprofessionalismandservicesprovidedbythefreightforwardercanvaryagreatdeal.Whenyoulookaroundyoucanfindthatitrangesfromthesmallone-manoperatorwhoseonlyequipmentisacellphoneandasmalllorrytothelargeinternationalfreightforwarder.Appointmentmustnotdependonpricebutonthevaluewhichtheywillbring.Toavoidunnecessarypitfalls,considersomeofthepointslistedbelowwhenselectingthepersontohandleyourvaluablecargo,alsotakingintoconsiderationthevalueandcomplexityofyourcargomovement.

You must ensure that the freight forwarder has the following:

1. AdEqUATE WAREhOUSING ANd TRANSIT fACIlITIES Youmustbeconcernedwhereyourcargoistemporarilystored.Willitbeprotectedfromthe

weatherortheft?Willproperliftingequipmentbeused?

2. SUffICIENT vEhIClES Youhavetoconsiderwhethertherearesuitableandsufficientvehiclesputatyourdisposal.

3. qUAlIfIEd ANd ExpERIENCEd STAff Justasinanyorganisation,thequalityofstaffemployedisimportantforsuccess.Thisisvital

forspeedandreliability.

4. NETWORk Of BASES OvERSEAS ABlE TO hANdlE YOUR CARGO Agoodfreightforwarderhasofficesorhasreputablerepresentativesatplaceswhereyour

cargoiscomingfromorgoingto.

5. Edp NETWORk Of SYSTEM TO TRACk YOUR CARGO Withtoday’sadvancementininformationtechnology,yourfreightforwardermustbeableto

providefacilitiesforyoutotrackyourcargoon-line.


29

Selecting the VesselAfterpreparationofyourcargofortheintendedvoyage,thecargoisreadytobeshippedoff.WhenyouimportonFOBtermsorexportonCFRorCIFterms,underrulesoftheINCOterms,youarrangetheship.Youareinapositiontoselecttheshipandyoumustchooseonewhichcansafelycarryyourcargotoitsdestination.

Below are some key fundamentals to consider when selecting the ship:

AGE Of ThE ShIpStatisticshaveproventhattheoldershiphasahighertendencytobreakdownor,intheworstcase,sink.Itisafactthatshipsaredesignedwithalimitedworkinglifebeforeitbecomesdestinedforthescrapyard.Itiscommontofindthatfreightontheoldershipwillbecheaper.Peoplewilltakethiswaytosaveonshippingcost.Asageneralruleinsurersexpresscautionwhenshipsexceed15yearsoldandtheymayapplyanoveragesurchargeonthecargopremium.

ClASSIfICATION Of ThE ShIpLookfortheClassificationoftheship.Membershipwillensurethattheship’sconstructionandseaworthinesscomplywithahighstandard.ThepeoplewhodeterminetherulesaretheClassificationSocieties.Therulesdefinethedimensionsoftheship’sstructures.ToretaintheClassificationassignedtotheshipwhenitwasbuilt,itisnecessaryfortheshiptoundergoandpassaspecialsurveyeveryfouryears.

ThemajorshipbuildingcountrieslikeUSA,UK,Norway,Germany,ChinaandJapanhavetheirownClassificationSocieties.Generally,ashipbelongingtoaClassificationSocietyisinabettercondition.CoastalandoldershipsusuallydonotbelongtoanySocietyasitisquitecostlyfortheownerstomaintaintheirvesselsuptothestandardsrequiredbytheClassificationSocieties.

flAG ANd REGISTRATIONStandardsandrequirementsforregistrationcanvaryfromcountrytocountry.Someseeaneedtoensurethatshipsdomeetacertainstandardwhileothersseeitasprovidinga“flagofconvenience”.Needlesstosay,mostofusshouldbeabletospotthedifference.

lINERS vERSUS TRAMpSLinersplyonaregularscheduleservicebetweenports.Theysailonscheduleddateswhethertheyarefullornot.Alinercompanyismadeupofanumberofshipswithback-upservicesonshore.Thelinercompanytendstobealargeconcernandsometendtobelongtocountriesastheirnationalcarriers.

Thetramporgeneraltraderdoesnotoperateonafixedsailingschedulebuttradesinallpartsoftheworldinsearchofcargo.Theycarrymainlybulkcargoessuchasgrain,timber,fertilizers,sugarandoresincompleteshiploads.Trampcompaniesaremuchsmallerthanlinercompanies.Trampsareusuallyshipsforhireorcharter.


30

ChARTEREd ShIpSGenerallycharteredshipspresentabiggerrisk.Theytendtobegenerallyofinferiortonnage.Thechartererwhohascontractwiththecargoownershasnodirectcontroloverthemanagementandmaintenanceoftheship.Recoveryprospectsareinquestionasshipownersandcharterersareknownforpushingtheblametooneanother,dependingontheircharterpartycontractsandthetermsoftherelevantbillsoflading.

The Phantom ShipThisissomethingwhichiscommonwithintheAsiancountries,andpeoplebecomevictimswhencaughtoff-guard.

Phantomshipsareusuallystolenvesselsregisteredwithfalseinformationgiventoauthoritiesthatdonotasktoomuch.

Withthisfalseidentityandusingbonafideagents,theseshipsarrangetopickupcargoandjustdisappear.Theshipthenchangesnamebeforepickingupfreshcargofromsomeotherunsuspectingshipper.

Cargoesofhighvalueandwhichcanbeeasilydisposedoff,forexamplepalmoil,textiles,resin,rubber,steelandtimber,aretargets.

InourregiontheInternationalMaritimeBureau(IMB)hasmadeextensiveresearchandisregardedastheforemostauthorityonthissubject.BelowaresomeofthecharacteristicsdescribedbytheIMBasapossiblephantomship.

Theshipused:• Isgenerallyover15yearsold.

• Isunclassed.

• Isunderaflagofconvenience,e.g.Honduran,Panamanian,Belize,St.Vincent.

• DoesnothaveHull&Machineryinsurance.

• DoesnothaveProtectionandIndemnitycover.

• Hasunknownrecentorpreviousvoyages.

• Chargeslowerfreightthancurrentmarketrates.

Ouradvicetoexportersandimporterswithshipmentinvolvingacharteredvesselistogetfulldetailstodetermineitsidentity.

MSIGcancheckintothebackgroundofthevesselifyoufindittobesuspicious.Theservicewillberenderedatnoextracosttoyou.


31

32

F-AD-B

17-V

2

For more information, please call MSIGor contact your Insurance Adviser at:

MSIG Insurance (Malaysia) Bhd (46983-W) HeadOffice:CustomerServiceCentre, Level22,MenaraWeld,No.76, JalanRajaChulan,50200KualaLumpur Tel+60320508228,Fax+60320268086CustomerServiceHotline180088MSIG(6744) [email protected] Websitewww.msig.com.my

kUAlA lUMpUR CustomerServiceCentre, Level22,MenaraWeld,No.76, JalanRajaChulan,50200KualaLumpur Tel+60320508228,Fax+60320268086

AlOR SETAR 1stFloor,No.169, SusuranSultanAbdulHamid11, KompleksPerniagaanSultanAbdul HamidFasa2,05050AlorSetar,Kedah Tel+6047722266,Fax+6047722255

BATU pAhAT No.35A,JalanKundang, TamanBukitPasir,83000BatuPahat,Johor Tel+6074336808,Fax+6074337808

IpOh LotsA-01-10,A-01-12,A-01-14&A-01-16, 1stFloor,WismaMFCB, GreentownBusinessCentre,No.1, PersiaranGreentown2,30450Ipoh,Perak Tel+6052551319,Fax+6052537979

jOhOR BAhRU P2-2C&P3-3A,MenaraAnsar, No.65,JalanTrus,80000JohorBahru,Johor Tel+6072763100,Fax+6072763800

klANG 3rdFloor,No.1,LorongTiara1B, BandarBaruKlang,41150Klang,Selangor Tel+60333436691,Fax+60333422571

klUANG 1stFloor,No.7,BangunanHLA, JalanYayasan,86000Kluang,Johor Tel+6077726501/7745701 Fax+6077745702

kOTA BhARU 3826,1stFloor,JalanHamzah, 15050KotaBharu,Kelantan Tel+6097481280,Fax+6097483509

kUANTAN Nos.A-43,A-45&A-47, LorongTunIsmail12,SriDagangan2, 25000Kuantan,Pahang Tel+6095157501,Fax+6095157502

MElAkA No.42,JalanKSB1, TamanKotaSyahbandar,75200Melaka. Tel+6062894333,Fax+6062894222

pENANG 15AFloor,PlazaMWE, No.8,LebuhFarquhar,10200Penang Tel+6042642828,Fax+6042642829

pETAlING jAYA Units9-3&11-3,BlockA,JayaOne, No.72A,JalanUniversiti, 46200PetalingJaya,Selangor Tel+60379544208,Fax+60379544202/3

SEREMBAN No.33,GroundFloor,LorongHaruan5/2, OaklandCommerceSquare, 70200Seremban,NegeriSembilan Tel+6066013501,Fax+6066013503

SUNGAI pETANI 1stFloor,9C,JalanKampungBaru, 08000SungaiPetani,Kedah Tel+6044244180,Fax+6044234513

kOTA kINABAlU 4thFloor,WismaGekPoh, JalanHajiSaman, 88000KotaKinabalu,Sabah Tel+6088233030,Fax+6088235110

kUChING 22&22A,JalanRubber, Lots344&345,Section9, 93400Kuching,Sarawak Tel+6082255901/259204 Fax+6082427612

MIRI Lot937,1stFloor,JalanAsmara, 98000Miri,Sarawak Tel+6085434890,Fax+6085419002

SANdAkAN 1stFloor,Block18, Lots1&2,BandarIndah,Mile4, NorthRoad,90000Sandakan,Sabah Tel+6089217388,Fax+6089215388

SIBU 1stFloor,No.65,JalanKampongNyabor, 96000Sibu,Sarawak Tel+6084323890/347008 Fax+6084314558

TAWAU 1stFloor,Block42,TB330A, FajarComplex,91000Tawau,Sabah Tel+6089771051,Fax+6089764079