T6—Introduction to Cargo Risk Management and Insurance

Subscriber price: $111.00, Non-subscriber price: $145.00
Estimated total study time: 9 hours 5 minutes

This initial course introduces basic concepts necessary to understand and manage shipping risks, both physical and financial, together with the characteristics of carrier legal liability vs. cargo insurance policies.

Types of Shipping Risks

This lesson covers various types of shipping risks, both physical and financial, and how to reduce physical risks and/or properly allocate them between shipper and consignee.

(Estimated study time: 1 hour 34 minutes)

Shipping Risks
- Risk Awareness vs. Expertise
- Risk Anticipation/Identification
  - Physical Risks
  - Financial Risks
- Risk Management Strategies/Outcomes
- Physical Risk Reduction
  - Cargo Preparation & Packaging
  - Cargo Marking
  - Containerization
    - Full Container Loads (FCL)
    - Through Containerization of LCL Shipments
  - Description/Remarks on the Transportation Document
  - Mode, Routing and Carrier/Service Provider Selection
- Transfer of Risk from Shipper to Consignee
  - Trade Terms (Delivery Terms)
  - Payment Terms

Carrier and Bailee Legal Liability; "Self-Insurance"

This lesson explains the nature and limitations of carrier and bailee legal liability for loss or damage to goods in their custody, plus the concept and reality of "self insurance."

(Estimated study time: 2 hours 4 minutes)

Introduction
Transportation Carrier Liability
- Overview of Carrier Liability
- International Standard Rules Governing Cargo Transportation
  - Air Transportation and Truck Pre-Carriage and On-Carriage
  - Ocean and Connecting Through Intermodal (Surface) Transportation
  - Road, Rail and Inland Waterway Transportation
- Cargo Losses a Carrier Is and Is Not Liable For
  - General—Negligence vs. Causes Beyond Carrier's Control
  - Losses a Carrier Is Liable For
  - Losses a Carrier Is Not Liable For
  - Example of Carrier Liability Rules (Rotterdam Rules)
  - Burden on Shipper to Prove Time/Place/Circumstances of Loss
- Bailee Liability
  - What is a "Bailee"
  - Hiring Bailees—Liability Limits & Contracts
  - Freight Forwarder/Transportation Intermediary as Bailee
- Illustration of Carrier Liability Limits Changing During Intermodal Transportation
Bailee Liability
- What is a "Bailee"
- Hiring Bailees—Liability Limits & Contracts
- Freight Forwarder/Transportation Intermediary as Bailee
"Self-Insurance"

Shipping Insurance Basics

This lesson introduces basic insurance concepts and terminology (applicable to any type of casualty insurance), and the types of cargo-related risks and/or losses insurance will cover.

(Estimated study time: 1 hour 45 minutes)

Introduction
Cargo Insurance
- General—Insurance is a Risk-Sharing Contract
- Generic Property/Casualty Insurance Policy Information and Conditions
  - Property Covered
  - Risks/Perils Covered
  - Maximum Value of Coverage(s) Per-Incident and/or Cumulative
  - Insured Value/Computation of Loss
  - Period of Coverage
  - Detailed Insuring Conditions
  - Claim Procedures; Notification and Proof of Loss
  - Insurable Interest
  - Loss Payee
- Overview of Cargo Insurance
  - General—Most Shipments Insurable under Marine Cargo Insurance
  - Key Benefits of Cargo Insurance
  - Standard Marine Cargo Underwriter Insuring Conditions
- Inland Marine Cargo Insurance
- Contingency Insurance
- "Self-Insurance"
Cargo Insurance for Land/Air Transportation Modes
- Insuring Multimodal Movements
- Insuring Domestic Land Shipments
- Insuring Air Cargo

Types of "Marine Cargo" Policies

This lesson addresses various types of marine cargo insurance policies, and basic coverages thereof.

(Estimated study time: 1 hour 4 minutes)

Introduction
Types of Marine Cargo Insurance Policies
- Marine Open Cargo Policy
- Special Marine Cargo "Policy" (Certificate)
- Voyage Cargo Policy
- War Risk Insurance
  - General—Commercial vs. War Risks
  - Obtaining War Risk Insurance Coverage
  - Important Differences Between War Risk and Commercial Risk Coverage
    - Period of Coverage
    - Cancellation

Cargo Insurance Certificates - Basics

This lesson addresses the basic functions and features of cargo insurance certificates, who prepares and distributes them, and reporting requirements to the insurance carrier.

(Estimated study time: 1 hour 34 minutes)

Introduction
Insurance Terms and Premiums are Negotiable
Cargo Insurance Certificates
- General—Basic Functions
- Key Characteristics of a Marine Cargo Insurance Certificate
  - Evidence of Insurance & Insuring Conditions
  - Loss Payee; Certificate Negotiability
  - Proof of Insurable Interest
- Relationship between Certificate and Underlying Open Cargo Insurance Policy
- Instruction Concerning Losses/Claims
- Distribution of Cargo Insurance Certificate
- Reporting Coverage to the Insurance Carrier
Preparing Cargo Insurance Certificates
- Computing Insured Value
- Specific Shipment Information
- Insurance Certificates for Use with Letters of Credit
Certificate Signature and Endorsement
Open Policy Coverage Reporting; Records Inspection

Cargo Insurance Certificates - Insuring Conditions

This lesson addresses the cargo insurance certificates in terms of the insuring conditions which may be placed thereon based on the underlying insurance policy, and what to do if special insuring conditions are needed (i.e., terms other than the pre-printed "boilerplate" found on certificate forms.)

(Estimated study time: 1 hour 4 minutes)

Introduction
General
Underlying Open Policy Conditions
A Full Statement of Insuring Conditions
Preprinted "Special Conditions" Block; Problems
"Boilerplate" Language; Problems
Modification/Additions to "Boilerplate" Insuring Conditions on Certificate Forms
- Optional and Special Insuring Conditions
- Inclusion of WAR RISK, S.R.&C.C.
- Coverage Limitations
- L/C Insuring Conditions