{"id":6649,"date":"2021-04-04T09:16:08","date_gmt":"2021-04-04T13:16:08","guid":{"rendered":"https:\/\/www.letterofcredit.biz\/?p=6649"},"modified":"2021-04-04T09:16:08","modified_gmt":"2021-04-04T13:16:08","slug":"amount-of-cargo-insurance-coverage-example-under-an-l-c-payment","status":"publish","type":"post","link":"https:\/\/www.letterofcredit.biz\/index.php\/2021\/04\/04\/amount-of-cargo-insurance-coverage-example-under-an-l-c-payment\/","title":{"rendered":"Amount of Cargo Insurance Coverage Example under an L\/C Payment"},"content":{"rendered":"<p>The purpose of taking out insurance is to receive compensation in case the goods do not arrive or are damaged.<\/p>\n<p>Therefore, the policy holder must ensure that the sum insured is adequate to replace the goods.<\/p>\n<p>The sum insured should include the price of the goods as well as the cost of transport and a new insurance. (1)<\/p>\n<p>According to the letters of credit rules, UCP 600 and ISBP 745, the <a href=\"https:\/\/www.letterofcredit.biz\/index.php\/2018\/05\/07\/insurance-documents\/\">insurance document<\/a>, insurance policy or certificate, must indicate the amount of insurance coverage and be in the same currency as the credit.<\/p>\n<p>If there is no indication in the credit of the insurance coverage required, the amount of insurance coverage must be at least 110% of the CIF or CIP value of the goods.<\/p>\n<p><span style=\"color: #ff6600;\"><strong>Example 1: Marine Insurance Coverage Amount Calculation<\/strong><\/span><\/p>\n<p><strong>Field 32B: Currency Code, Amount<\/strong><\/p>\n<ul>\n<li>120000USD<\/li>\n<\/ul>\n<p><strong>Field 46A: Documents Required<\/strong><\/p>\n<ul>\n<li>Insurance Policy \/ Certificate issued to the order of applicant in duplicate covering all risks for the CIF value of the goods plus 10 pct claims payable in Djibouti and must indicate the agent name and address in Djibouti.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice.png\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter wp-image-6659 size-full\" src=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice.png\" alt=\"\" width=\"867\" height=\"244\" srcset=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice.png 867w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice-300x84.png 300w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice-768x216.png 768w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/cif-amount-commercial-invoice-696x196.png 696w\" sizes=\"(max-width: 867px) 100vw, 867px\" \/><\/a><\/p>\n<p>According to our example, total CIF value of the goods is USD 120.000,00. The minimum insurance cover must be %10 higher than total CIF value, so that the minimum insurance coverage indicated in the insurance policy should be USD 132.000,00.<\/p>\n<p style=\"text-align: center;\"><span style=\"color: #00ccff;\"><strong>Insurance Coverage Amount<\/strong><\/span><\/p>\n<p><a href=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details.png\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter wp-image-6662 size-full\" src=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details.png\" alt=\"\" width=\"1250\" height=\"523\" srcset=\"https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details.png 1250w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-300x126.png 300w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-1024x428.png 1024w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-768x321.png 768w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-696x291.png 696w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-1068x447.png 1068w, https:\/\/www.letterofcredit.biz\/wp-content\/uploads\/marine-cargo-insurance-details-1004x420.png 1004w\" sizes=\"(max-width: 1250px) 100vw, 1250px\" \/><\/a><\/p>\n<p><span style=\"color: #333399;\"><strong>References:<\/strong><\/span><\/p>\n<ol>\n<li>Documentary credits in practice, Reinhard L\u00e4ngerich, Second edition \u2013 2009, Published by: Nordea, Page:165<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>The purpose of taking out insurance is to receive compensation in case the goods do not arrive or are damaged. Therefore, the policy holder must ensure that the sum insured is adequate to replace the goods. The sum insured should<\/p>\n","protected":false},"author":1,"featured_media":6670,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,150],"tags":[204,143,141],"class_list":["post-6649","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance-policy","category-letter-of-credit-documents","tag-insurance-certificate","tag-insurance-coverage","tag-insurance-policy"],"_links":{"self":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts\/6649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/comments?post=6649"}],"version-history":[{"count":0,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/posts\/6649\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/media\/6670"}],"wp:attachment":[{"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/media?parent=6649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/categories?post=6649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.letterofcredit.biz\/index.php\/wp-json\/wp\/v2\/tags?post=6649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}