insurance certificate versus policy

simonj · Post by **simonj** » Thu Jan 30, 2003 12:00 am

the documentary credit calls for an "insurance policy covering all risks as per institute cargo clauses..." An insurance "certificate" in lieu of a "policy" was presented.

Article 34d states: unless otherwise stipulated in the credit, banks will accept an insurance certificate or a declaration under an open cover pre-signed by insurance companies or underwriters or their agents. If a credit specifically calls for an insurance certificate or a declaration under an open cover, banks will accept, in lieu thereof, an insurance policy."

The idea is that proper insurance exits and this can be accomplished either by a certificate under an open policy or by a policy itself. The fact that the beneficiary presented a certificate under an open policy does not provide any less proof of insurance than a if a "policy" were presented.

Would any of you consider the presentation of a certificate in lieu of a policy a discrepancy? If so, what is your reasoning?

Jeremy: my first name is Audrey.

NigelHolt · Post by **NigelHolt** » Fri Jan 31, 2003 12:00 am

Audrey,

Without liability/responsibility and personally:

If a credit calls for a policy, then a policy must be presented (irrespective of the utility of a certificate); sub-Article 13a refers. I believe these words of Lord Diplock in Commercial Banking Co of Sydney Ltd v Jalsard Pty Ltd (1973) emphasise the point:

‘The banker is not concerned as to whether the documents for which the buyer has stipulated serve any useful commercial purpose or as to why the customer [= applicant] called for tender of a document of a particular description.’

Jeremy

PGauntlett · Post by **PGauntlett** » Fri Jan 31, 2003 12:00 am

A policy is better than a certificate. An ins cert lacks the legal characteristics of a policy, hence it is acceptable for a policy to be presented when the credit calls for a cert but not vice versa.

Philip Gauntlett

LeoCullen · Post by **LeoCullen** » Fri Jan 31, 2003 12:00 am

Article 34 makes it clear that an insurance policy is acceptable in lieu of an insurance certificate but does not suggest that the two documents are interchangeable.

ICC Official Opinion R332 (although it addresses a different issue) would be interesting for you to read.

Simply enter "R332" into the site search.

[edited 1/31/03 4:35:43 PM]

DimitriScoufaridis · Post by **DimitriScoufaridis** » Sat Feb 01, 2003 12:00 am

Audrey,
Since the credit calls for an insurance policy, presentation of an insurance certificate would be considered a discrepancy. As mentioned by Phil and Leo, and as stated in sub-Article 34(d), you could accept a policy instead of certificate but not the other way around.

Insurance certificates do not include all terms and conditions of the contract between the insurer and the assured. Insurance policies however do include such details. Various problems could arise in this regard. For more details, I would suggest you refer to two recent postings: Hatem Shehab - Goods Descr. & Insur. Coverage (UCP 500 Forum) and Michael Flanagan - Exclusion Clauses on Insurance Policies/ Certificates (ICC Opinions Forum) both initiated on 1/2/03.

Dimitri