Business insurance types
A: Hello, Mr. Smith. How is business?
B: Not so good, I have to say.
A: Why, what has happened?
B: Well, the May consignment of canned fruits arrived at the destination rather dented and our users refused to pay for it.
A: That really sounds bad. What's the cause for the damage in your opinion?
B: Personally, I think the damage was due to careless packing. But my exporter insists that the damage has nothing to do with packing itself and asks me to claim against either the insurance company or the shipping company. So my question to you is whether I can lodge a claim with the insurance company on the damaged goods.
A: Well, your problem relies on what sort of insurance policy you have taken out.
B: You see, we have got an "open cover" policy with the insurance company.
A: Well, I don't know I can give you an answer before I know the terms of the policy. Generally speaking, under a CIF term, it covers only "All Risks" and "War Risks", at 110% of the invoice value. Additional specific risks may be covered by additions to the FPA and WPA.
Choose a type of insurance
A: Have you taken out insurance yet on the shipment?
B: Yes, we talked about it with our underwriter, and we think that we should get a policy for total loss only.
A: Why TLO? That only helps if the goods are destoryed, or damaged so badly that they can't be used.
B: We have shipped a lot of goods. We think TLO is the best policy for shipment. Trust us, please.
A: OK, we'll trust you this time.
B: Thanks, there is really no need to worry. Our company has never lost money because of under insurance. Your shipment is secure.