Marine Cargo

WHY MARINE CARGO INSURANCE?
In spite of modern shipping techniques, loss or damage remains a frequent occurrence during transportation, loading and unloading of goods.
The possibilities of recovering a loss or damage from carriers are limited as these are able to avoid responsibility for many accidents under maritime laws. Even when they are held responsible, their liability is often limited by International Conventions. Marine cargo insurance was developed over the centuries to address these problems. It is an exception today for a shipment to be uninsured. Banks will insist on evidence of insurance when discounting a bill of exchange since, without it, the bill will become an unsecured debt in the event of loss of the goods. The insurance policy is therefore an important part of international trade.
Although the name by which this class of insurance is called could be understood to its being limited to sea shipments, yet in fact it is a common practice now-a-days to use it for all modes of shipment i.e. by sea, air or land.

HOW TO ARRANGE CARGO INSURANCE?
The Cargo Insurance is arranged by either the buyer or the seller and normally follows one of the internationally accepted standard conditions, as well as the agreed terms of sale.
There are many important advantages to arranging Cargo Insurance locally right here in the State, including the following ones:

- The need to deal with unknown overseas insurers and/or laws and regulations is avoided.
- The policy may be written in Qatari Riyals or in any other currency and any possible problems with overseas exchange controls are eliminated.
- The insurance arrangements including the required coverage, the sum insured and the rate of premium can be negotiated and conducted locally.
- Promptness in adjustment and settlement of claims locally, thus avoiding the possible harassment and/or complications and delays, which could result from insuring abroad.
- If these are many shipments to or from various countries, then one open policy can cover all such shipments.
- Retaining the insurance premiums within the State.
- Affording better protection to the rights to the insured under the Qatari laws and jurisdiction.

WHAT SCOPE OF COVERAGE?
Generally now-a-days cargo insurance is arranged under one of the three internationally known Institute Cargo Clauses (A), (B) & (C).
Basic coverage is common under all three clauses such as explosion, sinking and loss following upon major accident to the means of transport e.g. ship stranding or crashing of aircraft, overturning of a truck or train. Clause (A) represents the broad cover followed by (B) then (C). For example, Clause (A) provides all risks cover (except for some exclusions) including but not limited to breakage, denting, shortage, theft, water damage and contaminal plus the basic cover.
What usually influences the choice of the clauses is the nature of goods to be insured. For example fragile items and high-quality high-value goods such as glass, computers, office equipment, textiles and the like, are usually covered under clause (A) while cement bags clause (C).
On the other hand, some commodities such as bulk shipment refrigerated cargo and livestock are normally dealt with under special covers and clauses. Coverage for war, Strikes, Riots and Civil Commotion risks can be arranged at an additional premium, again under special Institute Clauses.

WHAT BASIS OF VALUATION?
The sum Insured in a cargo policy is based on an "agreed value" representing usually the cost of the goods and the freight charges plus a margin of 10 - 20% to cover other incidental and additional expenses.

WHAT WILL IT COST?
The cost of cargo insurance differs from one commodity to the other depending mainly on the nature of the cargo, mode of transit, pack degree of exposure to insured risks and the scope of cover required. Applying a deductible / excess would result in an overall reduction of the cost.

Marine Insurance (Hull)

Importance of Marine Insurance (Hull)
Marine carriage is the major means for international trade. Despite the vital contribution of land and air transport in commerce movement, they come after marine transport. Ships and carriers are normally exposed to maritime perils during the voyage, whilst operating in the port or upon building process. Hence, no local or international marine carrier can run any voyage without insurance cover to the cargo and hull. In fact, insurance provides the financial security and protection for the marine voyage and carrier together. In consolidation to the great role played by the local carrier and its influential contribution in interface trade of Qatar, DIC provides a number of Hull Insurance policies in coordination with the international re-insurance market. So, the Company keeps the higher Qatari market share of marine hull insurance business that reached 65%.

Definition of Marine Insurance (Hull)
It is the line of business that provides insurance cover to the marine hull against the various perils during the voyages it runs between the ports, whilst operating in the ports, upon anchorage or during their building or construction processes on dockyards. The insurance is provided against all perils exposed by the vessel in all circumstances for a specific period of time – mostly one year – or during a specific voyage. The coverage includes the hull, liability of owner, parties responsible for repair operations in addition to the Freight. The Protection and Indemnity Clubs, the membership of which is basically formed of vessels’ owners, cover the other perils not normally covered by the marine insurance policies (Hull).

Marine Hull Insurance Classes
The classes of marine hull insurance varies in accordance with the type of vessel to be insured, the nature of risks to be covered, period of cover, nature of voyage and other factors. There are many types of vessels such as bulk goods vessels, gigantic vessels, bulk fluids and mixed carriers, oil and chemicals tankers, gas carriers, container vessels, towboats and passenger vessels. There are also many classes of marine hull insurance policies such marine hull and machinery insurance during the voyages, ship building perils insurance, liability insurance, freight insurance, vessels towing insurance, ship repairing companies liability insurance and hull insurance on port perils terms for the vessels operating in the ports. The marine insurance policies (hull) vary also pursuant to the period of insurance cover. There are the provisional ones which cover the vessel for a specific period of time, voyage insurance policy which covers the vessel during the whole voyage, ship building insurance policy and mixed policy.

Major Perils Covered
The marine peril is the risk arising out of or connected with the marine navigation, i.e. the sea represents the cause of damage or it may arise of navigational difficulties encountered. The marine hull insurance policy covers the sea perils such as drowning, grounding, stranding and collision due to bad weather situations in sea. The policy also covers perils occurring in sea whether during the voyage or not like fire, explosion, theft, piracy, capture and confiscation.

Major Perils Excluded
The marine insurance (hull) excludes the loss or expenses attributable to malicious acts or misconduct by the insured, war risks such as war, civil war, revolution, mutiny, hostile operations, lien, arrest, embargo. The policy also excludes riots, strikes, civil commotion, and acts of terrorism in addition to nuclear perils and non-seaworthiness, loss arising out of non-suitability of carrying vessel to the goods carried.

Insurance Cost
The rate of marine insurance (hull) is determined on the basis of many factors. The most important ones are represented in the nature of perils covered as to their type and size, limit of cover, period of insurance, value of the vessel and the extent of its seaworthiness determined by the international classification societies.

Insurance Procedures
DIC receives application forms from the maritime companies. Highly experienced and competent underwriters evaluate such proposals. Based on the material facts declared, the rate of insurance is determined and the policy is issued accordingly.

For More Information Please Call  +974  4335054/4335057