Maximum insured amount

Shahed · Post by **Shahed** » Wed Aug 19, 2015 1:00 am

L/C (subject to UCP 600) requires presentation of insurance documents for 100% of invoice value + 10%.

Bene submit a invoice for $100 and insurance documents for $115.
Issuing bank's refused the insurance documents because of over insured. They mentioned that L/C explicity ask insurance documents invoice amount + 10 % (empahasis added on + (plus) sign).

Do you think this is a discrepancy ?

Regards,

Shahed

WeitzmanZeev · Post by **WeitzmanZeev** » Wed Aug 19, 2015 1:00 am

ucp600 article 28f.ii. state : a requirement in the credit for insurance coverage to be for a percentage of the value of the goods, of invoice value or similar is deemed to be the minimum amount of coverage required. as l/c does not exclude this article, the presented insurance document is complied with l/c terms and ucp600. best regards, LILI

Shahed · Post by **Shahed** » Wed Aug 19, 2015 1:00 am

ICC opinion R581 states - Where a credit does not specify a percentage, fixed amount or maximum amount for insurance cover, the insurance document may be expressed for any amount above the minimum of 110 per cent of the gross CIF or CIP value.

But in this case it specify a percentage i.e. 10 pct.

Shahed

WeitzmanZeev · Post by **WeitzmanZeev** » Thu Aug 20, 2015 1:00 am

in your a/m case the credit required insurance coverage for a percentage of 110 pct of invoice value.
article 28f.ii. relates exactly to your case and confirm that requirement of insurance coverage for a percentage of invoice value is deemed to be the minimum amount required for insurance coverage.
this means that the actual percentage of the insuraance coverage can be above the required percentage in the credit.
in your case it means that the percentage can be above 110%

best regards, LILI

Shahed · Post by **Shahed** » Fri Aug 21, 2015 1:00 am

Thanks Lili,

Is there any difference between 110 pct of invoice and [ii] for invoice value + 10 Pct ?

I am consufed with "+ 10". Does it mean "exact"?

Shahed

WeitzmanZeev · Post by **WeitzmanZeev** » Mon Aug 24, 2015 1:00 am

I don't see any difference between '110% of invoice value' and 'invoice value+10%', in my opinion the addition of '+10%' does not mean 'exact'.
if issuing bank wish that the coverage insurance amount to be exaclty for a fixed amount it should stipulate the word 'exact' after the percentage requirement, otherwise any percentage above the requirement will complie with article 28.f.ii. i.e. 'percentage deem to be the minimum amount of coverage required'.
if anyone has other opinion pls comment.
best regards, LILI