Insurance Endorsement: Who Should Endorse When the Policy Is Issued “A/C” the Beneficiary?

It is not uncommon for an insurance policy or certificate to be purchased by a freight forwarder or another intermediary for the account of the beneficiary. Does this affect who must endorse the insurance document when the L/C requires an endorsement by the assured? Let’s look at the following question.

Question

Dear Mr. Old Man,

Greetings for the day. I hope this email finds you well.

I would appreciate your opinion on the following matter.

The beneficiary is Greenlake Ltd.

The insurance document shows the Assured/Insured as:

ABC Freight Services Ltd A/C Greenlake Ltd

The insurance document is endorsed by Greenlake Ltd.

Normally, an insurance document should be endorsed by the assured. In this case, it has been endorsed by another party.

Can the term “A/C” (Account of) be interpreted as “on behalf of”?

Would this be acceptable under the L/C?

Please advise.

Regards,

Priya

______

Answer

Dear Priya,

Thank you for your question.

The abbreviation “A/C” in “ABC Freight Services Ltd A/C Greenlake Ltd” means “for the account of”, not “on behalf of.” It indicates that ABC Freight Services Ltd purchased the insurance for the account of Greenlake Ltd, which has the insurable interest in the goods.

However, the party shown as the Assured/Insured on the insurance document is ABC Freight Services Ltd. The words “A/C Greenlake Ltd” do not make Greenlake Ltd the assured; they merely indicate for whose account the insurance was arranged.

Therefore, if the L/C requires the insurance document to be endorsed by the assured, the endorsement should be made by ABC Freight Services Ltd, not by Greenlake Ltd. If the L/C requires the insurance policy or certificate to be in assignable form, the assured may endorse it either in blank or specifically to another party.

In practice, it is common for an L/C to require an insurance policy or certificate in assignable form, and the insurance policy or certificate may indicate the beneficiary as the Assured, even though it is purchased by ABC Freight Services Ltd under a separate commercial arrangement with Greenlake Ltd. That arrangement is outside the scope of the L/C and need not be reflected in the insurance document.

Best regards,

Mr. Old Man