ICC Digital Library Forum

would there be any reason for a bank to
refuse 2 separate insurance certificates
covering together in there total amount
the required 110% of the cif invoice
value of one shipment, i.e. invoice for
usd 130'000,00, 1st i/c for usd 85'000,00
2nd i/c for usd 45'000,00?

There is insufficient information to fully answer this here, e.g.
1. Is partial shipment permitted & does this indicate partial shipment ?
2. Are the goods indicated by the two ins certs mutually exclusive ?
3. The total of the two ins certs only comes to USD130,000 & therefore fails to satisfy the 110% requirement.
4. Are there sufficient indications in the description to link the goods to the invoiced items (e.g. product code nos.) & shipped items (e.g. container nos.).

Laurence

mr. bacon

this was a hypothetical query since we were
requested by one of our clients to answer
this question in general. however the
point regarding partshipments really does
not have any impact at all. lets just
say the two i/c would perfectly comply
with all credit terms and conditions.
would it then be o.k. to have 2 i/c
instead of only one.

Yes, this is ok. I've actually seen and accepted these types of certs. The draft ICC Int Standard Banking Practice paper has this to say on the matter:

'Insurance covering the same risk for the same shipment must be covered under one document unless the insurance documents for partial cover each clearly reflect, by percentage or otherwise, the value of each insurer’s cover and that each insurer will bear their share of the liability severally and without pre-conditions relating to any other insurance cover that may have been effected for that shipment'

Philip Gauntlett

I agree with Philip that it would be acceptable, but I would not recommend it to prospective applicants, as there may be difficulties in establishing claims. For example, if the goods are identical in both ins certs, and a claim is made for a partial loss, how does one prove which ins cert is applicable, or apportion the claim pro-rata ?

Laurence

Both ins certs are for the full value and each state the percentage (with both certs totalling 100%)of the claim they are responsible for. The wording on the certs is usually: 'This certificate is only in respect of 66.66%/33.34% of the insured value of the interest declared hereunder and in the event of a claim must be presented in conjunction with the counterpart certificate'

Philip,

I agree with the acceptability of the ins certs envisaged by you, but the wording of the original posting suggests insurance values of distinct amounts of money (USD85k +USD45k) which only total the required amount when added. Perhaps we can get clarification from the initiator of this topic.

Laurence

Taught by bitter experience in workshops, we would not respond to hypothetic questions. It is dangerous to generalize the issues. From our consultancy experience, many variables may change our answers. So it is better not to deal with them. Otherwise we may do more damages than good.

www.tolee.com

T.O. Lee

Although my question was somehow hypothetic
it is still a question to be answered to my
client. Yes it is a general question as I do
not have the details requested by Laurence
such as container nos, product codes and the
like. However it is clear that both i/c must
of course be in strict conformity with all
credit terms and conditions. Maybe someone
can give me a hint to an already published
opinion.