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New Term: Hull and Machinery

Hull and machinery insurance protects vessels against physical damage from perils at sea while in transit. Lloyd's of London oversees a network of smaller insurance syndicates to ensure high standards. Open cover policies are commonly used for international trade, providing blanket coverage for multiple shipments over time through renewable or permanent policies. A cover note is a temporary document proving insurance coverage until a final policy is issued, listing the insured, coverage, and what is covered. An insurance document under UCP can be a policy, certificate, or declaration under an open cover signed by an insurer, underwriter, or their agent to prove insurance coverage.

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210 views8 pages

New Term: Hull and Machinery

Hull and machinery insurance protects vessels against physical damage from perils at sea while in transit. Lloyd's of London oversees a network of smaller insurance syndicates to ensure high standards. Open cover policies are commonly used for international trade, providing blanket coverage for multiple shipments over time through renewable or permanent policies. A cover note is a temporary document proving insurance coverage until a final policy is issued, listing the insured, coverage, and what is covered. An insurance document under UCP can be a policy, certificate, or declaration under an open cover signed by an insurer, underwriter, or their agent to prove insurance coverage.

Uploaded by

Jhoo Angel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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New Term: Hull and machinery

 Hull and machinery insurance is a type of ocean marine insurance, which protects the
insured vessel or fleet against physical damage caused by a peril of the sea or other
covered perils while the vessel is in transit over water.

 Lloyds : Lloyd’s of London consists of many smaller insurance companies called


“syndicates”, that all operate under one banner. The Lloyd’s “Corporation” oversees this
network of syndicates to ensure they operate to the highest standard, maintain good
financial standing and adhere to Lloyd’s Code of Ethics.
Declaration under open cover
 Open cover policies are commonly used in international trade, specifically by
companies involved in high volume trade over long periods of time.  There are many
risks associated with marine shipping that would lead to a company wanting to
purchase marine insurance. Some of these risks include damage to cargo from loading
or unloading, infestation, sinking, piracy, weather issues, and other similar difficulties.

 Open cover can be classified into two types.


a) renewable policy
b) permanent policy

 Renewable policy : If a company believes it will not be engaging in marine activity that
often, it can opt to buy a renewable policy. This means that for every voyage it would
renew the open cover policy.

 Permanent policy : This covers all voyages under that time period without having to
negotiate a contract for each shipment. It is a form of blanket coverage. The insurer
may require only a declaration of details of shipment each time a shipment is made.
Cover Note
 A cover note is a temporary document issued by an insurance company that provides
proof of insurance coverage until a final insurance policy can be issued. A cover note is
different from a certificate of insurance or an insurance policy document. A cover note
features the name of the insured, the insurer, the coverage, and what is being covered
by the insurance.

 How a Cover Note Works ?


Insurance companies issue a cover note to provide an individual with proof of
insurance before all the insurance paperwork has been processed. During this time,
the insurer may continue to evaluate the risks associated with insuring the holder of
the cover note, and the cover note will continue to serve as the insured’s proof that he

or she has purchased coverage until the insurer issues the policy documents and
certificate of insurance.
Insurance Document and Coverage
 An insurance document under the UCP article denotes
a) an insurance policy,
b) an insurance certificate
c) a declaration under an open cover

 Insurance document is to be issued and signed by


a) Insurance company
b) an underwriter - a professional authorized by insurer who evaluates and analyses
risks of insured party and establishing pricing for insurable goods.
c) Proxy or agent - a person with authority to represent the insurance company or
underwriter.

 Signature by Proxy or agent must identify if they have signed for Insurance company or underwriter.

 When the issuer is identified as insurer, the insurance document need not identify that it is an
Insurance company or underwriter.

 An insurance document can also be issued in Insurance broker’s stationery, provided the document is
signed by Insurance company, an underwriter or Proxy/agent.

 When an insurance document requires counter signature by the issuer, assured party or a named
entity, it must be countersigned.
Insurance Document and Coverage
a) Originals to be presented – Well known
b) Presentation of Insurance policy in lieu of Insurance certificate or oper cover – Well known
c) Insurance document should not mention an expiry date for presentation of claim.
d) Date of insurance document should not be after shipment date even if coverage is for ‘warehouse to
warehouse’ – Well Known
e) If no dates given to identify insurance date or coverage date, counter signature date will be taken as
coverage date.
f) Insurance coverage amount in the currency of the credit – Well Known
g) 110 pct of CIP or CIF value be the minimum coverage amount when credit is silent on coverage
percentage – Well known
h) When coinsurers are involved – Insurance doc need not show their name or the percent covered.
i) One insurer, agent/proxy can sign behalf of co insurers

j)

k)

l)
Franchise and Excess deductible
Insurance Document and Coverage
 Risks
Insurance Document and Coverage
 Endorsement

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