CLAIM PAYABLE IN INVOICE CURRENCY

QUESTION

Anonymous # 4. August 2010, 04:32
Thu writes:

Dear Mr Old Man.

L/C call for AIR insurance policy or certificate … showing claim payable in invoice currency. ben bank present + certificate (policy) of Marine insurance + not showing claim payable in invoice currency but just showing the sum insured in USD (invoice currency) pls comment.

Thanks for yr advice.
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COMMENT

Mr. Old Man # 5. August 2010, 00:32

1) The question does not tell me how the shipment is made and what kind of transport document is required under the LC, a marine BL or an AWB? If the shipment is by sea and a set of marine bills of lading is required to be presented, it is not logical to require an air insurance policy/certificate. Similarly, if the shipment is by air and an AWB is required, it is unreasonable to insist on a marine insuarance policy.

Not quite appropriate, but based on the concept of “however named” in transport documents, I would accept the insurance provided it covers the risks specified in the LC and complies with other terms and conditions.

2) Firstly, it should be understood that currency shown in the invoice is that shown in the LC and also that shown in the insurance document.
There are divided opinions on whether the insurance policy that does not include the required statement “claim payable in invoice currency” is discrepant. It seems that ICC has no opinions on the issue and the majority say it is a discrepancy if the insurance does not indicate such a statement. They are afraid that the insurer will pay in equivalent local currency.
As for me, I tend to accept the insurance policy which is issued in the currency of the LC/invoice provided nothing to the contrary is stated. Of course, if it is better for the insurance policy to indicate such a statement.

Let me know if there is any authorized opinion to the contrary or a real case where the insurer pays in a currency other than the insurance currency.