CIIG Advanced Diploma flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Incoterms CIF insurance obligation

Under CIF the seller must obtain minimum Institute Cargo Clauses (C) cover for 110% of contract price in the contract currency, unless the parties agree otherwise in the sale contract.

Incoterms CIP insurance obligation

Under Incoterms 2020 CIP requires the seller to arrange Institute Cargo Clauses (A) cover for 110% of contract price, giving broader protection than CIF's minimum requirement.

Clean bill of lading

A bill of lading issued without notations of damaged packaging or defective goods; it evidences shipment in apparent good order and is generally required under documentary credits.

Documentary credit independence

Banks under a letter of credit deal in documents, not goods; the credit is separate from the sale contract, so policy wording, amount, and currency must match the credit exactly.

Insurable interest timing

The insured must have a pecuniary interest in the goods at the time of loss, not necessarily when the policy is effected; assignment may transfer that interest.

Proximate cause

The dominant and effective cause of a loss; remote causes are disregarded when deciding whether an insured peril or an exclusion operated.

Utmost good faith duty

The insured must disclose all material circumstances and not misrepresent the risk; under the Insurance Act 2015 remedies for breach are proportionate to the underwriter's prejudice.

Subrogation limit

After paying a claim the insurer acquires the insured's recovery rights against third parties, but only up to the amount paid; any excess belongs to the assured.

Particular average

A partial loss or damage to cargo borne solely by the owner of the affected goods, as distinct from a general average sacrifice shared by all cargo interests.

General average contribution

A voluntary and intentional sacrifice of property for the common safety of ship and cargo; all saved interests contribute to the loss based on their arrived values.

Constructive total loss

A loss where the subject matter is abandoned because recovery or repair costs would exceed its value, or where deprivation appears irretrievable; notice of abandonment is required.

ICC (A) cover scope

Institute Cargo Clauses (A) provide all-risks cover for loss or damage to cargo, subject to the standard exclusions such as inherent vice, delay, and insufficient packing.

ICC (C) named perils

Institute Cargo Clauses (C) cover only specified perils such as fire, explosion, stranding, grounding, sinking, capsizing, collision, and general average sacrifice.

Warehouse to warehouse clause

The ICC transit clause covers goods from leaving the named warehouse until delivery at destination, or 60 days after discharge if onward transit is interrupted.

War and strikes exclusions

ICC (A), (B), and (C) exclude war and strikes risks; separate Institute War Clauses and Institute Strikes Clauses must be purchased to cover those perils.

Inherent vice exclusion

Loss caused by the natural behaviour of the goods, such as decay, fermentation, or spontaneous combustion, is excluded because it is not caused by an external insured peril.

Commodity hazard rating

Cargo underwriters classify goods by susceptibility to damage, theft, and deterioration; perishables, hides, and machinery attract higher rates than steel or timber.

Per conveyance deductible

A deductible applied to the total loss arising from one vessel, vehicle, or container event, protecting the insurer against accumulation of many small claims.

Open cover declarations

An open cover automatically insures shipments within agreed terms; the assured must declare each shipment promptly and accurately so the insurer can monitor exposure.

Accumulation risk

The exposure created when many insured shipments travel on the same vessel, container, or route, so a single casualty could produce multiple large claims.

Claims documentation

A cargo claim typically requires the policy or certificate, invoice, packing list, bill of lading, survey report, and claim form to establish loss and quantify damage.

Sue and labour charges

Reasonable costs incurred by the assured or agents to avert or minimise an insured loss; recoverable in addition to the sum insured and not subject to average.

Carrier notice of loss

The assured must notify the carrier of apparent damage within the period set by the contract of carriage, often three days, to preserve recovery rights.

Surveyor appointment

An independent surveyor inspects the damaged cargo, determines the cause, and quantifies the loss; the survey report underpins the adjustment and settlement.

Valued policy settlement

A valued policy fixes the agreed value of the insured goods; in a partial loss the indemnity is proportional to that agreed value rather than market value.

Average clause effect

If the sum insured is below the required percentage of sound market value, the claim is reduced proportionately; a 110% declaration clause usually avoids average in cargo.

Independent liability contribution

Where several policies cover the same loss, each insurer pays according to the liability it would have borne alone, and the total never exceeds the loss.

Insurance Act 2015 remedies

For breach of fair presentation the insurer may avoid the policy only for deliberate or reckless breach; otherwise remedies are proportionate, such as reducing the claim.

Sanctions screening

Insurers must screen insureds, vessels, and routes against UN, EU, UK, and US sanctions lists; covering or paying a sanctioned trade can itself breach the law.

Anti-money laundering duties

Insurers and brokers must apply customer due diligence, verify source of funds, keep records, and report suspicious transactions to the relevant financial intelligence unit.

Facultative reinsurance

Reinsurance of a single risk or shipment, separately offered and accepted by the reinsurer; used for large or unusual cargo exposures outside treaty capacity.

Excess of loss reinsurance

A non-proportional treaty under which the reinsurer pays losses above the cedent's retention up to an agreed limit, commonly used to protect against catastrophe and accumulation losses.