David Chapter 10 mod

David Chapter 10 mod - Chapter 10 INTERNATIONAL INSURANCE...

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Chapter 10 I NTERNATIONAL I NSURANCE LEARNING OBJECTIVES At the end of this chapter, the student should be able to: 1 Identify perils of the sea. 2 Identify perils associated with air shipments. 3 Identify insurable interest. 4 Identify methods of risk management. 5 Identify various forms of and coverages under marine insurance policies. 6 Identify elements of an airfreight policy. 7 Identify the functions of Lloyds of London. 8 Identify elements and functions of commercial credit insurance. 9 Identify nomenclature of international insurance. PREVIEW Any study of insurance can be complex, especially in the area of marine insurance. Seafaring is an ancient trade and many of the concepts and traditions of insuring cargo have been used for many years. As a result, some of the ideas may be unfamiliar to those first exposed to them.
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10-2 Chapter 10 International Insurance CHAPTER OUTLINE 10-1 Pitfalls of International Insurance I. One of the most complex issues in international logistics is insurance. II. Topic is of utmost importance. 10-2 Insurance Glossary I. Insurance uses precise terminology linked to risks. II. Makes sense to learn terminology before using to reduce risks. a. Average b. Barratry c. General Average d. Hazard e. Jettison f. Particular Average g. Peril h. Risk i. Speculative Risk j. Pure Risk k. Objective Risk l. Subjective Risk 10-3 Perils of the Sea I. Ocean shipment is risky. II. Most risks are not well-known by shippers used to land transit. 10-3a Cargo Movements I. Ocean shipments are subject to numerous cargo movements. II. Exporter usually carefully packs goods, say, into a container. III. After leaving exporter’s shipping dock, goods are in care of less scrupulous hands. a. Typical container is handled four to six times in each of the ports of departure and destination. b. Containers are “dropped into the ship” quite literally. c. Cargo is subject to ship’s movement in six directions at one, even in good weather. d. Storms can cause excessive damage. 10-3b Water Damage I. Strong possibility of water damage unless cargo is very well packed and protected II. Traditional for a shipper of higher value merchandise to request that the cargo be stored “under deck.”
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Chapter 10 International Insurances 10-3 III. With modern containerships the concept of deck has disappeared, making cargo vulnerable to sea and rain water. IV. Cargo can be damaged by container “sweat” due to lack of air circulation, other cargo with high moisture content, or loading in hot, humid areas. Break-bulk goods can be damaged in holds by ship “sweat.” 10-3c Overboard Losses I. Worldwide ships lose containers on a daily basis. II. Container collapses also can damage goods. 10-3d Jettison
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David Chapter 10 mod - Chapter 10 INTERNATIONAL INSURANCE...

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