Insurance in International trade
In international trade while the goods are handled and transported across the borders they are subject to numerous perils during the journey. To provide a protective shield to the financial obligations in an international transaction and minimise the losses from damages to goods /vessel during transit, usually, insurance is taken to hedge the emanating risks. Thereby insurance contract is a very import part of any agreement for international sale or transportation of goods.TYPES OF INSURANCE IN INTERNATIONAL TRADE Marine Cargo insurance It refers to the insurance of risks of export &import shipment including goods in transit by rail, road, air or by post during the course of journey. Shipment by smaller vessels and coastal shipment of cargo by steamers is also covered in its sphere. The most important organisations in world, dealing with marine insurance contracts, are Lloyd's; Institute of London Underwriters (ILU) having over 100 companies as its members; International Union of Marine Insurance, representing 30 countries mostly European and last but not least Canadian Board of Marine Underwriters. Of these Lloyd's is the world's most powerful body in marine insurance business.
Hull Insurance This insurance covers fishing vessels/trawlers, steamers /ferries /yatches / lighter crafts, dumb of self-propelled barges and any other country crafts carrying exports &import shipments against the various perils during a journey. American Hull Insurance Syndicate, formed in 1920 with the objective of providing to insurance to US ships, is the leading organisation in the world dealing with Hull insurance contracts. Headquartered in New York it is a mutual association that sets rates and accepts business up to $40 million per vessel, now throughout North America.Export Credit Insurance Policy This is a form of casualty insurance that protects manufacturer exporters, merchant exporters and other international suppliers of goods and services against losses that may result from nonpayment by importers/ foreign buyers after exporter has granted credit in international trade. It does not cover physical damage to the product.