WHERE THE INSURANCE CERTIFICATE SHOWS THE ISSUING BANK AS THE ASSURED PARTY

QUESTION

Dear Mr. Old Man,

Following insurance clause in the LC, full set insurance certificate for 110pct of invoice value in favour of Bank of India, Mumbai covering All risks and war risks.

Presented certificate states:

Insured – Bank of India, Mumbai

My view in this case Insured being the said Bank meets the LC requirement of insurance certificate in favour of Bank of India.

Would you agree or look for assured as beneficiary then endorsed by them in favour of bank of India?

Regards

Rohini

—

ANSWER

Hi,

I agree with you that LC requires an insurance certificate issued in favour of the issuing bank, the presented insurance certificate that shows the issuing bank as the assured or is endorsed to the issuing bank is acceptable.

The insurance certificate in question is acceptable.

Please refer to ISBP 821 K21) a and b:

a. When a credit is silent as to the insured party, an insurance document is not to evidence that claims are payable to the order of, or in favour of, the beneficiary or any entity other than the issuing bank or applicant, unless it is endorsed by the beneficiary or that entity in blank or in favour of the issuing bank or applicant.

b. An insurance document is to be issued or endorsed so that the right to receive payment under it passes upon, or prior to, the release of the documents.

Best regards,

Mr. Old Man