Article 28 UCP 600 prescribes the necessities an insurance coverage doc has to satisfy whether it is to be accepted by a financial institution beneath a letter of credit score. Previously detailed in Articles 34 to 36 UCP 500, the revision has not led to substantive adjustments, aside from
– Admissibility of signatures by brokers or proxies (Article 28 an UCP 600)
– Prescribed protection quantity is minimal protection (Article 28 f (ii) UCP 600)
– Admissibility of any exclusions of legal responsibility (Article 28 I UCP 600)
Insurance paperwork embrace insurance coverage insurance policies, insurance coverage certificates and declarations of insurance coverage. These nonetheless have to be signed by underwriters, insurance companies or their brokers and proxies. Cover notes, issued by insurance coverage brokers aren’t acceptable.
When a consortium is the insurer, the signature of just one member of the consortium is adequate. The different members of the consortium needn’t be listed. This nonetheless does apply when the members of the consortium aren’t collectively and severally liable however solely severally or proportionately liable, because the different members of the consortium and their respective quotas of legal responsibility will be decided by means of the consortium chief.
XXX Ltd, insurance coverage brokers
(approved by the Underwriters of Lloyds to difficulty the certificates on their behalf
X, insurance coverage, Inc.
Y dealer with particular authority
If an insurance coverage certificates is required beneath the LC, an insurance policy is suitable. However, if an insurance policy is required, the presentation of an insurance coverage certificates might be rejected.
Article 28 e UCP 600 specifies that the date of the insurance coverage doc should be no later than the date of cargo. Hitherto, a protection "warehouse to warehouse" had been acceptable. Now the ICC Drafting Group believes that the Institute Cargo Clauses containing a "transit clause" isn’t acceptable since doc examiners needn’t think about details exterior the paperwork.
Similar to the protection necessities within the INCOTERMS, the insurance coverage protection in a letter of credit score should be a minimum of 110% of the CIF worth. Unless particularly supplied for within the credit score, paperwork evidencing the next insurance coverage protection than stipulated within the credit score are acceptable.
Even although a credit score stipulates an "all risk" insurance coverage, a paperwork exhibiting that sure dangers are excluded is suitable. The ICC itself famous on this regard (ICC-Publ. No. 511, web page 98): "This Article emphasizes that the traditional 'all risk' insurance cover does not cover what some parties may consider to be extension of all types of risk. The 'all risk' cover is not what it appears to be since not all risks are covered. "
The exclusion of danger can happen not solely within the "all risk" clause, but additionally, if the insurance coverage doc references different of its provisions.