Introduction to Cargo Risk Management and Insurance

Course Overview

This comprehensive course covers the key aspects of cargo risk management, focusing on both physical and financial risks, as well as how to mitigate them. Participants will learn the four basic steps in risk management, the physical risks to cargo, and how delivery and payment terms impact risk transfer between buyers and sellers. The course examines carrier liability, the COGSA rules, and the role of transportation intermediaries as bailees. Topics also include insurance policies, the concept of insurable interest, different cargo insurance options, and the basics of marine cargo insurance certificates, including their terms, conditions, and necessary modifications. Special attention is given to the intricacies of war risk insurance and the coverage provided under various policies.

Understand the difference between physical and financial risks to cargo, and be able to list several examples of each type of risk
Identify four basic risk management steps which a shipper and/or their freight forwarder or other transportation intermediary should always take to minimize cargo losses and damage
Identify five specific means of reducing the physical risks to cargo
Explain how delivery terms and payment terms affect the transfer of shipping risks between a seller and buyer
Identify the typical limitations on carrier liability for loss and damage to cargo.
Based on the COGSA rules, differentiate between types of losses which ocean carriers are responsible for vs. losses which they are not responsible for.
Understand what a bailee is, and how freight forwarders and other transportation intermediaries become bailees.
Identify ways in which a forwarder or transportation intermediary can limit their liability as a bailee.
Understand the concept of self-insurance, and how a shipper becomes self-insured.
Define what is meant by the term “insurance policy.”
Identify and describe the generic terms and conditions found in all insurance policies.
Understand the concept of insurable interest, and be able to identify when such an interest exists based on particular circumstances.
Identify optional types of cargo insurance policies and/or endorsements used to insure cargo via different transportation modes and/or through transportation circumstances.
Identify and describe the basic characteristics and sections of a marine open cargo policy.
Describe a special marine cargo policy, and identify circumstances in which such a policy may be appropriate or necessary.
Identify the particular risks which are covered under a war risk policy and differentiate these from risks from those covered under a marine cargo policy.
Explain the risk implications for cargo transiting ports for which war risk insurance is on application.
Identify and explain five basic functions of a marine cargo insurance certificate.
Understand and explain what governs and/or influences the insured value to be entered onto a marine cargo insurance certificate.
Explain how origin and destination points should be stated on a marine cargo insurance certificate when the insuring conditions include warehouse-to-warehouse clause.
Explain why it is important to accurately show marks and numbers on a marine cargo insurance certificate.
Explain the relationship between a marine cargo insurance certificate (see specimen Certificate of Marine Insurance) and the underlying marine open cargo insurance policy.
Understand and explain each of the insuring conditions stated on the specimen marine cargo insurance certificate.
Explain the purpose of the “Special Conditions” block on a marine cargo insurance certificate, and what additional information the certificate preparer may and/or should place therein.
Explain how a shipper or transportation intermediary can and/or must alter the preprinted conditions on a standard insurance certificate when other then standard insuring conditions apply.