Marine Cargo Claims - Basis of Valuation

369 views
Skip to first unread message

Amit Bakle

unread,
Mar 2, 2017, 4:43:40 AM3/2/17
to Insurance Adjusters
Recently, I came across a Marine Cargo claim for minor damage to an imported machine. The machine was observed to be in repairable condition and required replacement of few spares.

The cost of entire machine is 23 Lac and spare costs 1.21 lac with additional cost of 50k for labour for replacement of spares.
In the subject policy, Basis of valuation is mentioned to be Invoice Value and Incidental charges are insured seperately upto 10%. 

Kindly advise me 
1. If labour charges towards replacement of damaged spares are covered by default in the policy? OR
2. Labor charges towards replacement of the spares are covered under Incidental charges? If Yes, what would be maximum allowable charges towards the same.

Mukesh Gupta

unread,
Mar 2, 2017, 5:39:09 AM3/2/17
to insurance...@googlegroups.com
Dear brother
I am opinion that when we are considering repair of the machine, the labour charges towards replacement of parts will come in invoice value

--
You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.
To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsub...@googlegroups.com.
To post to this group, send email to insurance-adjusters@googlegroups.com.
Visit this group at https://groups.google.com/group/insurance-adjusters.
For more options, visit https://groups.google.com/d/optout.

R. L. AGARWAL INSURANCE SURVEYORS AND LOSS ASSESSORS PVT. LTD.

unread,
Mar 2, 2017, 7:59:55 AM3/2/17
to Insurance Adjusters
Dear Sir,

In the subject case both the cost of spares and the labour charges are payable in full. 

The 10% additional charges as per the basis of valuation, under Marine Cargo Insurance Policy, in case of machinery are payable in case of total loss only. These are not payable on repair cost in case the Machinery is repairable. 


On Thu, Mar 2, 2017 at 4:07 PM, Mukesh Gupta <mkgupta....@gmail.com> wrote:
Dear brother
I am opinion that when we are considering repair of the machine, the labour charges towards replacement of parts will come in invoice value
On Thu, Mar 2, 2017 at 3:11 PM, Amit Bakle <mitb...@gmail.com> wrote:
Recently, I came across a Marine Cargo claim for minor damage to an imported machine. The machine was observed to be in repairable condition and required replacement of few spares.

The cost of entire machine is 23 Lac and spare costs 1.21 lac with additional cost of 50k for labour for replacement of spares.
In the subject policy, Basis of valuation is mentioned to be Invoice Value and Incidental charges are insured seperately upto 10%. 

Kindly advise me 
1. If labour charges towards replacement of damaged spares are covered by default in the policy? OR
2. Labor charges towards replacement of the spares are covered under Incidental charges? If Yes, what would be maximum allowable charges towards the same.

--
You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.
To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsubscribe...@googlegroups.com.

To post to this group, send email to insurance-adjusters@googlegroups.com.
Visit this group at https://groups.google.com/group/insurance-adjusters.
For more options, visit https://groups.google.com/d/optout.

Chand Bhatia

unread,
Mar 2, 2017, 8:58:14 AM3/2/17
to insurance...@googlegroups.com
Dear Mr. Agarwal

I have great respect for you and also for vast knowledge which you have inherited from respected R L AGarwal Sir. But I feel while opining any aspect of claim, we should also share the back ground of an opinion. Normally there are three aspects of an opinion, either there is a direct condition of the policy, or there is a explanatory note in the books of insurance or there are some judicial authorities (court judgement) to arrive at an opinion. If any of these aspects and may also be shared by you, this will help the readers to understand the opinion. 

regards

C K BHATIA
--
c k bhatia
09810231248


Sandeep Mashru

unread,
Mar 2, 2017, 9:27:42 AM3/2/17
to insurance...@googlegroups.com

Dear Sir,

In my view incidental @ 10% is payable in case of Repairs also.

More views are awaited.

Regards

Sandeep Mashru

 

From: insurance...@googlegroups.com [mailto:insurance...@googlegroups.com] On Behalf Of R. L. AGARWAL INSURANCE SURVEYORS AND LOSS ASSESSORS PVT. LTD.
Sent: Thursday, March 2, 2017 5:47 PM
To: Insurance Adjusters
Subject: Re: [Adjusters:14008] Marine Cargo Claims - Basis of Valuation

 

Dear Sir,

 

In the subject case both the cost of spares and the labour charges are payable in full. 

 

The 10% additional charges as per the basis of valuation, under Marine Cargo Insurance Policy, in case of machinery are payable in case of total loss only. These are not payable on repair cost in case the Machinery is repairable. 

On Thu, Mar 2, 2017 at 4:07 PM, Mukesh Gupta <mkgupta....@gmail.com> wrote:

Dear brother

I am opinion that when we are considering repair of the machine, the labour charges towards replacement of parts will come in invoice value

On Thu, Mar 2, 2017 at 3:11 PM, Amit Bakle <mitb...@gmail.com> wrote:

Recently, I came across a Marine Cargo claim for minor damage to an imported machine. The machine was observed to be in repairable condition and required replacement of few spares.

 

The cost of entire machine is 23 Lac and spare costs 1.21 lac with additional cost of 50k for labour for replacement of spares.

In the subject policy, Basis of valuation is mentioned to be Invoice Value and Incidental charges are insured seperately upto 10%. 

 

Kindly advise me 

1. If labour charges towards replacement of damaged spares are covered by default in the policy? OR

2. Labor charges towards replacement of the spares are covered under Incidental charges? If Yes, what would be maximum allowable charges towards the same.

--

You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjus...@googlegroups.com.
To post to this group, send email to insurance...@googlegroups.com.

 

--

You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjus...@googlegroups.com.
To post to this group, send email to insurance...@googlegroups.com.

--
You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjus...@googlegroups.com.
To post to this group, send email to insurance...@googlegroups.com.

Chand Bhatia

unread,
Mar 2, 2017, 6:17:00 PM3/2/17
to insurance...@googlegroups.com
Dear All 

I have gone through some marine survey report by Lloyd Surveyors and the practice being followed by them . They work out the percentage loss in case of partial loss, be it be a machine, material or even the reduction of material quality (due to which the value of the material is discounted. They then adjust this percentage with the sum insured. My discussion with few of them reveaalss that since the marine policies are agreed value policies, thus the loss in percentage should be assessed. More over even in case of marine the average clause applies. Thus by all calculation a percentage of loss should be worked and adjusted with the sum insured. 

Quite a similar case was brought for discussion in one of the Chennai Seminar that if the machine under import is refurbished macchine and insured at invoice value of refurbished machine only + 10%. If some parts get damaged in transit, how should we valuate the loss as the part is new spare cost and machine insurance is on refurbished value. After discussion in which insurance company officer with very large experience were also present, it was decided that the cost of new machine should be worked and an average clause should be applied with the sum insured if the parts are to be replaced with new. However if the parts are available in refurbished condition then of course, the situation is different. 

In regard to incidental charges 10% addition is allowed as there are unforseen transit expenses like interstate or cross country taxes earlier there used to be even Octroi etc. also. Thus 10% was attributed to such expenses. If we go through the books of insurance, it is written that occasionally insured may even make profit of it, which is against the basic principle of insurance, but the same is practie. More over 10% is not mandatory, but a limit for insurance. for addition on invoice value.  

I feel a similar approach may be made for partial loss. 

C K BHATIA 

--

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsub...@googlegroups.com.
To post to this group, send email to insurance-adjusters@googlegroups.com.

 

--

You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsub...@googlegroups.com.
To post to this group, send email to insurance-adjusters@googlegroups.com.

--
You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.

To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsub...@googlegroups.com.
To post to this group, send email to insurance-adjusters@googlegroups.com.

--
You received this message because you are subscribed to the Google Groups "Insurance Adjusters" group.
To unsubscribe from this group and stop receiving emails from it, send an email to insurance-adjusters+unsub...@googlegroups.com.
To post to this group, send email to insurance-adjusters@googlegroups.com.



--
c k bhatia
09810231248


Reply all
Reply to author
Forward
0 new messages