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You are here: Home > General Takaful > Non Motor > IKHLAS   Marine Cargo Takaful


Introduction

IKHLAS MARINE CARGO TAKAFUL provides a ready check as to the sellers and buyers respective responsibilities depending upon the terms of sale on which goods are sold.

Terms of Sale are As Follows:

Ex Works
'Ex Works' means that the seller’s responsibility is to make the goods available at his premises (i.e. works or factory). In particular he is not responsible for loading the goods in the vehicle provided by the buyer, unless otherwise agreed. The buyer bears the full cost and risk involved in bringing the goods from there to the desired destination. This item thus represents the minimum obligation for the seller.

FREE CARRIER… (NAMED PORT)
Free carrier has been designed to meet the requirements of modern transport, particularly such ‘multimodal’ transport as container or ‘roll on – roll off’ traffic by trailers and ferries. It is based on the same main principle as FOB except that the seller fulfills his obligations when he delivers the goods into the custody of the carrier at the named point. If no precise point can be mentioned at the time of the contract of sale, the parties should refer to the place or range where the carrier should take the goods into his charge. The risk of loss of or damage to the goods is transferred from the seller to buyer at that time and not at the ship’s rail. Carrier means any person by whom or in whose name a contract of carriage by road, rail, air, sea or a combination of modes has been made. When a seller has to furnish a bill of lading, waybill or carrier’s receipt, he dully fulfills this obligation by presenting such a document issued by a person defined.

FOR/FOT
FOR and FOT means “Free on Rail” and “Free on Truck”. These terms are synonymous since the word 'Truck' is related to the railway wagons. They should only be used when the goods are to be carried by rail.

FOB AIRPORT
FOB Airport is based on the same main principles as the ordinary FOB terms. The seller fulfills his obligations by delivering the goods to the air carrier at the airport of departure. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods have been delivered.

FAS
FAS means 'Free Alongside Ship'. Under this term the seller’s obligations are fulfilled when the goods have been placed alongside the ship on their quay or in lighters. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. It should be noted that, unlike FOB, the present term requires the buyer to clear the goods for export.

FOB
FOB means 'Free on Board'. The goods are placed on board a ship by the seller at a port of shipment named in the sales contract. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods pass the ship’s rail.

C&F
C&F means “Cost & Freight”. The seller must pay the costs and freight necessary to bring the goods to the named destination, but the risk of loss of or damage to the goods, as well as of any cost increases, is transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment.

CIF
CIF means “Cost, Insurance and Freight”. This term is basically the same as C&F but with the addition that the seller has to procure marine insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the Insurer and pays the insurance premium.

FREIGHT
(CARRIAGE ) PAID TO
Like C&F “Freight or Carriage paid to ….” means that the seller pays the freight for carriage of the goods to the named destination. However, the risk of loss of or damage to the goods, as well as of any cost increases, is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship’s rail. It can be used for all modes of transport including multimodal operations and container or roll on-roll off traffic by trailers and ferries. When the seller has to furnish a bill of lading, waybill or carrier’s receipt, he duly fulfills this obligation by presenting such a document issued by the person with whom he has contracted for carriage to the named destination.

FREIGHT AND INSURANCE
(CARRIAGE ) PAID TO
This term is the same as “Freight or Carriage paid to…..” but with the addition that the seller has to procure transport insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.

EX SHIP
“Ex Ship” means that the seller shall make the goods available to the buyer on board the ship at the destination named in the sales of contract. The seller has to bear the full cost and risk involved in bringing the goods there.

EX QUAY
“Ex Quay” means that the seller makes the goods available to the buyer on the quay (wharf) at the destination named in the sales contract. The seller has to bear the full cost and risk involved in bringing the goods there.

There are two “Ex Quay” contracts in use, namely “Ex Quay (duty paid)” and “Ex Quay (duties on buyer’s account)” in which the liability to clear the goods for import are to be met by the buyer instead of by the seller.

Parties are recommended always to use the full description of these terms, namely “Ex Quay (duty paid)” or “Ex Quay (duties on buyer’s account)”, or else there may be uncertainty as to who is to be responsible for the liability to clear the goods for import.

DELIVERED AT FRONTIER
“Delivered at Frontier” means that the seller’s obligations are fulfilled when the goods have arrived at the frontier- but before “the customs border” of the country named in the sales of contract.

The term is primarily intended to be used when goods are to be carried by rails or road but it may be used irrespective of the mode of transport.

DELIVERED DUTY PAID
While the term “Ex Works” signifies the seller’s minimum obligation the term "Delivered Duty Paid”, when followed by words naming the buyer’s premises, denote the other extreme - the seller’s maximum obligation. The term “Delivered Duty Paid” may be used irrespective of the mode of transport.

If parties wish that the seller should clear the goods for import but that some of the costs payable upon the import of the goods should be excluded- such as value added tax (VAT) and/or other similar taxes- this should be made clear by adding words to this effect (e.g. “ exclusive of VAT and/or taxes”)


3.0 Type of Marine Cargo Cover
The types of cover available are usually referred to as follows:-

3.1 T.L.O. (Total Loss Only)
Covers total loss of the insured interest caused by the perils of the seas. Due to limited cover provided, request for such cover nowadays are seldom.

3.2 F.P.A (Fre of Particular Average)- As Per Institute Cargo Clauses
An F.P.A. Marine Insurance policy covers the perils of the seas only resulting in:-

  • Total loss (including Constructive Total Loss) of the whole interest insured.

  • Total loss of any package or packages occurring during loading, transshipment or discharge.

  • Partial loss caused if the carrying vessel is stranded, sunk or burnt; and if attributed to fire, explosion, collision or contact of carrying vessel with any external substances (ice included) other than water.

The policy also covers General Average, Sue and Labour Charges, Particular Charges and Salvage Charges.

3.3 W.A. or W.P.A. (With Average or With Particular Average)
- As Per Institute Cargo Clauses (W.A.)
The main difference between F.P.A. and W.A. is that the former excludes any partial loss (except in certain circumstances) whereas the latter provides partial loss cover. The W.A. policy covers all the risks insured under the F.P.A. policy, and in addition covers Partial Loss to cargo caused by the perils of the sea, where the most common peril is seawater damage.

3.4 W.A. PLUS T.P.N.D. (W.A. With Theft, Pilferage and Non Delivery)
In addition to the covers provided under the basic W.A. policy, the risks of theft, pilferage and non-delivery is also included. It must be borne in mind that any claim of theft or pilferages, notices must be given to the underwriters or their appointed agents within ten days of expiry of the risks.

3.5 W.A. T.N.P.D. Plus Other Extraneous Risks e.g. Hooks, Oil, Mud, Sweat, Acid, Fresh or Rainwater, Contact With Other Cargo etc
In addition to the risks provided under or 3.4 above, other extraneous risks like hooks, oil, mud, sweat, acid, fresh or rainwater, contact with other cargoes, etc can be covered as required with payment of additional premium.

3.6 All Risks – As Per Institute Cargo Clauses
The All Risks Policy covers against all risks of loss of or damage to the subject matter; excluding loss, damage or expenses proximately caused by delay or inherent vices or nature of the subject matter insured.

The policy also covers General Average, Sue and Labour Charges, Particular Charges and Salvage Charges.

The cover provided under the Institute Cargo Clauses irrespective of whether it is F.P.A., W.A. or All Risks, excludes the risks of War, Strikes and Civil Commotion. So in order for such risks to be included, the basic policy shall have to be extended.

The War Risks (as per Institute War Clauses) covers against the risks of capture, seizure, arrest, restraint or detainment; and the consequences thereof or of any attempt thereat; and the consequence of hostilities or war like operations, whether there be a declaration of war or not; civil war; revolution; rebellion; insurrection or civil strife arising therefrom; piracy; mines; torpedoes; bombs or other engines of war (but excluding loss or damage proximately caused by delay, inherent vices or loss of market or any claim for expenses arising from delay).

The coverage of war risk is confined to the period while the goods are on an overseas vessel but there are two exceptions as follows:-

a. The risk of mines and derelict torpedoes, floating or submerged are covered while the goods are in a craft being used for loading to and from the overseas vessel at port of loading, transhipment and discharge.
b. War risks are covered for 15 days during transhipment at an intermediate port even when the goods are stored onshore.

The Strikes, Riot and Civil Commotion risks (as per Institute Strikes, Riot and Civil Commotion Clauses) cover any loss of or damage caused by strikers, locked-out workmen or persons taking part in labour disturbances, riot or civil commotions; and person(s) acting maliciously (but excluding any loss or damage proximately caused by delays, inherent vices or nature of the property insured; the absence, shortage or withholding of labour of any description whatsoever during any strike, lockout, labour disturbance, riot or civil commotion; any claim for expenses arising from delay; and loss or damage caused by the war risks).

4. Revision of Institute Cargo Clauses
Every effort has been made to achieve a more direct approach by simplifying or replacing wordings wherever possible which, while having stood the test of time, have been criticized as archaic and antiquated and unintelligible to some to some assureds. With this criticism in mind it will be seen that the new Institute Cargo Clauses (A), (B) and (C) dated 1.1.1982, are capable of standing on their own and are for use only with the New Marine Policy Forms which act merely as vehicles for the clauses. They present an easily understandable cover which no longer involves cross-reference to the policy.

The covers provided under the respective clauses are as follows:-



4.1 Institute Cargo Clauses (A)

Risks Covered

1. All Risks of loss of or damage to the subject matter insured except as excluded below.
2. General Average and Salvage Charges except from any cause which are excluded below.
3. Indemnify against such proportion of liability under the contract of affreightment “Both to Blame Collision" Clause as in respect of a loss recoverable hereunder.

Exclusion
1. (a) Loss damage or expenses attributable to willful misconduct of the assured.
  (b) Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject matter insured.
  (c) Loss damage or expenses caused by inherent insufficiency or unsuitability of packing or preparation of the subject matter insured.
  (d) Loss damage or expenses caused by inherent vice or nature or nature of the subject matter.
  (e) Loss damage or expenses arising proximately caused by delay, even though delay be caused by a risk insured against.
  (f) Loss damage or expenses arising from insolvency or financial default of the owners managers, charterers or operators of the vessel.
  (g) Loss damage or expenses arising from the use of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

2. Unseaworthiness of vessel or craft; and/or unfitness of vessel craft; and/or unfitness of vessel craft conveyance container or lift van for the safe carriage of the subject insured, where the assured or their servants are privy to such unseaworthiness or unfitness at the time of the subject matter is loaded therein.
  The Underwriters waive any breach of the implied warranty of seaworthiness of the ship and fitness of the ship to carry the subject matter insured to destination unless the assured or their servants are privy to such unseaworthiness or unfitness.

3. (a) War, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power.
  (b) Capture, seizure, arrest, restraint or detainment (piracy excepted) and the consequences thereof or any attempt thereat.
  (c) Derelict mines, torpedoes, bombs or other derelict weapon of war.

4. (a) Caused by strikers, lock-out workmen, or persons taking part in labour disturbances, riot or civil commotions.
  (b) Resulting from strikes, lock-outs, labour disturbances, riot or civil commotions.
  (c) Caused by any terrorist or any person acting from a political motive.

4.2 Institute Cargo Clauses (B)

Risks covered- except as excluded below.

1. (a) Loss of or damage to the subject matter insured reasonably attributable to fire or explosion; vessel or craft being stranded, grounded, sunk or capsized; overturning or derailment of land conveyance; collision or contact of vessel or conveyance with any external object other than water; discharge of cargo at port of distress; and earthquake volcanic eruption or lightning.
  (b) Loss of or damage to the subject matter insured caused by General Average sacrifice; jettison or washing overboard; and entry of sea, lake or river water into vessel, craft, hold, conveyance, container, lift, van or place of storage.
  (c) Total loss of any package lost overboard or dropped whilst loading on to, or unloading from vessel or craft.

2. General Average and Salvage Charges, adjusted or determined according to the contract of affreightment and/or the governing law and practice incurred to avoid or in connection with the avoidance of loss from any cause except those excluded.

3. Indemnity against such proportion of liability under the contract of affreightment “Both to Blame Collision” Clause as in respect of a loss recoverable hereunder.

Exclusions

1. (a) Loss, damage or expenses attributable to willful misconduct of the assured.
  (b) Ordinary leakage, ordinary loss in weight or volume, or wear and tear of the subject matter insured.
  (c) Loss, damage or expenses caused by inherent insufficiency or unsuitability of packing or preparation of the subject matter insured.
  (d) Loss, damage or expenses caused by inherent vices or nature of the subject matter insured.
  (e) Loss, damage or expenses proximately caused by delay, even though the delay be caused by a risk insured against.
  (f) Loss, damage or expenses arising from insolvency or financial default of the owners, managers, charterers or operators of the vessel.
  (g) Deliberate damage to or deliberate destruction of the subject matter insured or any part thereof by the wrongful act of any person or persons.
  (h) Loss, damage or expenses arising from the use of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

2. Unseaworthines vessel or craft; and unfitness of vessel, craft, conveyance, container or liftvan for the safe carriage of the subject matter insured, where the assured or their servants are privy to such unseaworthiness or unfitness, at the time the subject matter insured is loaded therein.
  The Underwriters waive any breach of the implied warranty of seaworthiness of the ship and fitness of the ship to carry the subject matter insured to destination, unless the assured or their servants are privy to such unseaworthiness or unfitness.

3. (a) War, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power.
  (b) Capture, seizure, arrest, restraint or detainment (piracy excepted) and the consequences thereof or any attempt thereat.
  (c) Derelict mines, torpedoes, bombs or other derelict weapon of war.

4. (a) Caused by strikers, lock-out workmen, or persons taking part in labour disturbances, riot or civil commotions.
  (b) Resulting from strikes, lock-outs, labour disturbances, riot or civil commotions.
  (c) Caused by any terrorist or any person acting from a political motive.

4.3 Institute Cargo Clauses (C)

Risks Covered- except as excluded below:

1. Loss of or damage to the subject matter insured reasonably attributable to fire or explosion; vessel or craft being stranded, grounded, sunk or capsized; overturning or derailment of land conveyance; collision or contract of vessel craft or conveyance with any external object other than water; and discharge or cargo at port of distress.
2. General Average and Salvage Charges, adjusted or determined according to the contract of the affreightment and/or the governing law and practice, incurred to avoid or in connection with the avoidance of loss from any cause except those excluded.
3. Indemnity against such proportion of liability under the contract of affreightment “Both to Blame Collision” Clause as in respect of a loss recoverable hereunder.

Exclusions

1. (a) Loss, damage or expenses attributable to willful misconduct of the assured.
  (b) Ordinary leakage, ordinary loss in weight or volume, or wear and tear of the subject matter insured.
  (c) Loss, damage or expenses caused by inherent insufficiency or unsuitability of packing or preparation of the subject matter insured.
  (d) Loss, damage or expenses caused by inherent vices or nature of the subject matter insured.
  (e) Loss, damage or expenses proximately caused by delay, even though the delay be caused by a risk insured against.
  (f) Loss, damage or expenses arising from insolvency or financial default of the owners, managers, charterers or operators of the vessel.
  (g) Deliberate damage to or deliberate destruction of the subject matter insured or any part thereof by the wrongful act of any person or persons.
  (h) Loss, damage or expenses arising from the use of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

2. Unseaworthines vessel or craft; and unfitness of vessel, craft, conveyance, container or liftvan for the safe carriage of the subject matter insured, where the assured or their servants are privy to such unseaworthiness or unfitness, at the time the subject matter insured is loaded therein.
  The Underwriters waive any breach of the implied warranty of seaworthiness of the ship and fitness of the ship to carry the subject matter insured to destination, unless the assured or their servants are privy to such unseaworthiness or unfitness.

3. (a) War, civil war, revolution, rebellion, insurrection or civil strife arising therefrom or any hostile act by or against a belligerent power.
  (b) Capture, seizure, arrest, restraint or detainment (piracy excepted) and the consequences thereof or any attempt thereat.
  (c) Derelict mines, torpedoes, bombs or other derelict weapon of war.

4. (a) Caused by strikers, lock-out workmen, or persons taking part in labour disturbances, riot or civil commotions.
  (b) Resulting from strikes, lock-outs, labour disturbances, riot or civil commotions.
  (c) Caused by any terrorist or any person acting from a political motive.
   
     

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Takaful Solution Provider in Malaysia - auto insurance, auto takaful, car insurance, education plan, fire insurance, health insurance, home insurance, home takaful, hospitalization benefit, insurance, medical protection, motor, motor insurance, motor takaful, mrta, mrtt, personal accident, takaful, takaful provider, travel insurance, motor policy