Home Uncategorized MUST THE INSURANCE COVER THE ENTIRE VOYAGE REFLECTED IN THE TRANSPORT DOCUMENT?

MUST THE INSURANCE COVER THE ENTIRE VOYAGE REFLECTED IN THE TRANSPORT DOCUMENT?

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QUESTION

Dear Sir,

I required your valuable guidance for the below situation:

LC states:
44E: Port of loading: Chennai
44F: Port of discharge:Shanghai
44B:Final destination: xiamen

Bill of lading evidences:
Place of receit: Madurai
Port of loading: Chennai
Port of discharge: Shanghai
Final destination: xiamen.

Insurance certificate evidences:
Coverage from Port of loading: Chennai to Port discharge: Shanghai.

Please confirm whether the above coverage of risk is complied according to Art 28f(iii). I have doubt since the coverage is not started from Madurai and if something happens between Madurai and Chennai port in transit, who will bear the risk part.

I would expect that insurance document to be presented with risk coverage from Madurai to xiamen eventhough the LC does not states the place of receipt ( 44A).Hope I am correct.
Is it conclusion of ICC Opinion No. R679 (which is quoted below) is applicable for the above scenario ?.

QUOTE:
2.Insurance policy only covers transportation by sea ( ie.e from port loading New York USA and not from the place of receipt Piscataway,NJ
The credit required preesentation of a multimodal transport document, i.e. a transport document evidencing shipment on more than one mode of transport. The multimodal transport document evidences shipment effected from Piscataway, NJ (an in land point) to New York port, thence to Sovetskaya Gavan Port. The insurance document presented under the credit must, as stated in paragraph 188 of ISBP 645, cover the goods between the point of shipment,dispatch or taking in charge and the point of discharge or final destination.
An insurance document providing coverage from New york to Sovetskaya Gavan is not acceptable.
Unquote:

Awaiting your valuable reply.
Regards
Vijay
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ANSWER

Dear Vijay,

Yours is a very interesting question.

According to UCP 600 sub-article 28(f) (iii), the insurance document must indicate that risks are covered at least between the place of taking in charge or shipment and the place of discharge or final destination as stated in the L/C.

ICC Opinion R 468 also says: “Unless otherwise stipulated in the credit, the insurance document must cover the entire journey between the place from which the credit stipulates the goods are to be shipped or dispatched and the place to which the credit stipulates the goods are to shipped/delivered”.

The described L/C requires shipment from the port of loading (Chennai) to the final destination (Xiamen). Hence, the insurance document presented must cover the journey at least from Chennai to Xiamen.

In my opinion, the insurance document indicating risks covered from Chennai to Shanghai fails to comply with UCP 600 sub-article 28(f) (iii), hence, it is not acceptable.

Best regards,
Mr. Old Man

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