Question 6
6. I have a new customer in a country where imports must be insured on a carriage and freight basis and insurance effected with a firm in that country. The customer has asked me to arrange insurance for him and has given me details of the company, but I am unhappy about this because I expect difficulty in notifying the company when goods are shipped and I have no experience of their reliability in meeting claims. What should I do?
Notification Of shipment can be a serious difficulty, especially when a letter of credit is involved, but can sometimes be made easier if you can get the customer to open a credit leaving you maximum discretion in the method by which you send the information and the time period within which the information must arrive. The word "immediately" should be avoided. If a credit requires you to notify despatch to an insurance company in the customer's country it is essential to retain documents - such as a certified copy - to prove that you have done so and establish the date. You can protect against inadequate cover by getting a copy of the insurance document if you can and by consulting your own insurer or broker about seller's risk insurance: this is not doubly-insuring the cargo but gives you protection against failure of the obligatory cover. The subject is explained in the general section of the Guide, on pp. 20-1 of the current issue.
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