Analysis on the application of insurable interest principle in international cargo transportation insurance

I. Overview of the principle of insurable interest

Insurable interest means that there are various solid relationships between the insured or the insured and the subject matter insured, which are recognized and allowed by law.

To ensure economic benefits. The principle of insurable interest is the principle that insurance contracts must follow.

1. Conditions that constitute insurable interest

Any interest relationship between the insured and the subject matter insured cannot be regarded as insurable interest. Insurable interests must meet the following conditions:

(l) The insurable interest must be certain and realizable. Defined interests refer to existing interests, and realizable interests refer to interests that can be obtained in the future, not those that can be obtained subjectively.

(2) Insurable interests must be economic interests that can be measured in money. After the insured or the insured has an insurance accident, the economic benefits lost on the subject matter of insurance need to be compensated. But if the loss of value cannot be measured by money, it is difficult to determine the standard of compensation.

(3) Insurable interest must be legal interest. The insurable interest of the applicant or the insured in the subject matter of insurance must be a legal and claimable interest, not an act prohibited by law.

2. The function of insurable interest principle in practice.

(l) Insurance can be prevented from becoming gambling. The key to judge the boundary between insurance behavior and gambling behavior lies in the insurance of the insured.

Whether the subject matter has insurable interest. If the property or person of others who have no insurable interest is taken as the subject matter of insurance, it is a gambling act.

(2) It can prevent the occurrence of moral hazard. Moral hazard refers to the deliberate actions or omissions of the insured or the insured in order to obtain insurance indemnity.

As a result, the loss of the subject matter insured was caused or expanded. If the insured has no interest relationship with the subject matter insured, it is easy to breed moral hazard. If the applicant has a certain interest in the subject matter of insurance-insurable interest, then insurance is only for obtaining loss compensation or fixed payment.

(3) The degree of insurance compensation can be limited. In the property insurance contract, the insurable interest is the economic loss caused by the insurer to the insured according to the insurance contract.

Therefore, adhering to the principle of insurable interest can prevent the insured from obtaining the amount of insurable interest through insurance, thus avoiding violating the purpose of insurance economic compensation and inducing moral hazard.

Secondly, the application of insurable interest principle in international cargo transportation insurance.

In international trade, the international trade terms agreed by the buyer and the seller in the contract determine the transfer time of the risks borne by both parties, and the risk transfer time is closely related to the transfer time of insurable interests. Therefore, the choice of international trade terms is not only the division of risk transfer time of goods, but also the arrangement of insurance. Import and export goods need to be insured, so the choice of trade terms is very important for both buyers and sellers. Only according to the trade terms used in the transaction can we judge whether the buyer or the seller enjoys the insurance interest and who has the right to claim compensation from the insurer when the goods are damaged. The risk transfer time and insurance interest transfer time determined by the usual international trade terms in international cargo transportation vary with different trade terms.

According to the International Chamber of Commerce (Incoterms 1990), there are 13 different characteristics.

Price terms can be summarized into four groups: e (departure), f (unpaid main freight), c (paid main freight) and d (arrival). Based on this, the transfer time of risks and insurable interests of buyers and sellers can be explained in detail.

1.e group. Group e has only one term, EXW factory delivery. This trade term represents the source and storage of goods.

Cash on delivery terms, so this kind of transaction is similar to domestic trade in form. When EXW closes a transaction, the seller will only hand over the goods that meet the contract requirements to the buyer at the time and place specified in the contract in his own country. Even if he has completed the delivery obligation, the risks he bears will be transferred to the buyer with the completion of the obligation. The buyer is responsible for loading the goods on the means of transport and then transporting the goods from the place of delivery to the destination. Therefore, after accepting the goods from the seller's country, the buyer will bear all the risks that the goods need to be loaded and transported, thus having insurable interests. If the goods are damaged afterwards, the buyer has the right to claim compensation from the insurer.

2. group F. Group F includes FCA (Free Carrier) delivery of goods.

Supplement:

Person, FAS (Free on Board) loading port, FOB (Free on Board) loading port. In Group F, the seller shall deliver the goods to the carrier designated by the buyer at his own expense, and the main freight and risk of loss of the goods from the delivery place to the destination shall be borne by the buyer. Specifically, when the FCA term is adopted, the risk transfer is defined as the time when the goods are handed over to the carrier for disposal. Therefore, before fulfilling the delivery obligation, the seller should bear the risks of the goods and enjoy multiple benefits to the goods. After the goods are delivered to the carrier at the specified time and place, the risk will be transferred to the buyer, who will bear the risk from the delivery place to the destination warehouse and enjoy the insurable benefits. When FAS is adopted, the risks and expenses borne by the buyer and the seller shall be shared by the ship. The seller bears the risk of the goods until the goods are transported to the port of shipment, so the seller bears the risk of inland transportation and has insurable interests in the goods before the delivery of the ship. The buyer shall bear the risks after the goods are effectively handed over to the side of the ship and enjoy the insurance benefits of the goods from now on. Under FOB conditions, the risks borne by the buyer and the seller are bounded by the ship's rail, and the risks before the goods are loaded, including the losses caused by the goods falling into the dock or seawater during loading, are borne by the seller, so the seller has insurable interests before loading, and the buyer bears all the risks when the goods cross the ship's rail at the loading port. After that, the buyer enjoys insurable interest and the seller loses insurable interest. 3. Group C Group C includes CFR(6standFreight) cost plus freight, CIF (stInsuraneeandFreight) cost plus insurance plus freight, and CpT(CarriagePaidto) freight is paid to the designated destination.

Supplement:

At the destination, freight and insurance should be paid to the designated destination. The use of group C terms, although still similar to group F terms, belongs to the "transport contract", but the seller of such contracts will bear the main freight. Specifically, using CFR terms, just like FOB, the seller will bear the risk before the goods cross the ship's rail and bear the main freight. Prior to this, the seller had various rights and interests in the goods. After the port of shipment crosses the ship's rail, all risks and expenses except freight shall be borne by the buyer. At this time, the buyer has insurable interests and has the right to claim compensation after the insured goods suffer losses. Using CPT terminology, the boundary of risk transfer is the delivery of goods to the carrier. Like CFR, the seller must bear the main freight, that is, the freight for transporting the goods to the destination, but like the seller under CFR, the seller does not bear the insurance premium of the goods. Before the goods are delivered to the carrier, the seller has an insurable interest in the goods, but after the goods are delivered to the carrier, the risk passes to the buyer, and the buyer has an insurable interest in the goods. CIF is similar to CIP, and their difference from CFR and CPT lies in whether the seller bears the insurance premium on the way to the destination. Under CIF and CIP conditions, the seller must bear additional expenses, that is, not only freight, but also insurance in transit. Under CIF conditions, the transfer time of risks and insurable benefits of goods is the same as that of FOB and CFR, while under CIP conditions, the transfer time of risks and insurable benefits of goods is the same as that of FCA and CPI, so I will not repeat them here. 4. Group N and Group D include DAF (Delivery to Frontier) frontier delivery, des (Delivery for Shipment) port of destination delivery, DEQ (Delivery Terminal) port of destination delivery, DDU (Delivery Duty) unpaid delivery and DDP (Delivery Duty) paid delivery. The contract concluded with clause D belongs to the "Arriva contract", which means that the seller is responsible for transporting the goods to the destination agreed in the contract and bearing all risks, responsibilities and expenses before the goods arrive at the destination for delivery. because

Supplement:

Therefore, according to clause D, the seller has an insurable interest in the goods before they reach the destination, and has the right to compensation after the loss of the subject matter. After delivery at the destination (including border, ship, wharf, designated place, etc.). ), the buyer will bear the corresponding risks and enjoy the insurable benefits of the goods. Limited by space, I won't analyze the risks of buyers and sellers and the specific transfer time of insurable interests under each clause. It should be pointed out that according to the practice of marine insurance, because international trade goods are transferred between the seller, the carrier and the buyer many times, the insurer often does not pursue the insurable interest of the insured's time (that is, the policy allows the insured to endorse and transfer). However, in the event of a liability accident, it must be emphasized that the right of claim must belong to the person who has an insurable interest in the insured goods. Conclusion Through the analysis of the above four groups of international trade terms, we can realize that the principle of "warehouse to warehouse" in marine cargo transportation insurance should be treated differently according to specific terms. When and where the buyers and sellers bear the risk of damage or loss of the goods determines when and where the buyers and sellers enjoy the insurable benefits of the goods stipulated in the insurance contract. Only the party who enjoys legally recognized economic benefits and can be insured, that is, the party who enjoys insurable benefits on the goods as stipulated in the contract, can claim compensation from the insurer according to the principle of economic compensation when the goods suffer losses and enjoy their own rights. Only on this basis can the insurer judge when to effectively perform the insurance compensation obligation and when to reject the claimant who does not enjoy the insurance benefits. '