What does "Franchise" and "Excess" mean on an insurance policy?

Sometimes insurance companies, insurers, would like to limit their risk exposures, especially when certain damage of the goods is an ordinary expectation throughout the related sector.

In such circumstances insurance companies add technical insurance terms,"Franchise" and "Excess", to the insurance policies, in order to limit their financial responsibilities.

On this article I will try to explain the meanings of "Franchise" and "Excess". 

What does "Franchise" mean on a cargo insurance policy? What does "Excess" mean on a cargo insurance policy.

What is the difference between insurance policy and insurance certificate?

There are 3 types of cargo insurance documents available in international marine cargo insurance market.

These are insurance policy, insurance certificate and declaration under an open cover.

Declaration under an open cover is not used so frequently in daily practice comparing to remaining two insurance document types. 

For this reason knowing details of insurance policy and insurance certificate is very important not only for exporters and importers but also other foreign trade participants.

Today I would like to clarify the differences between an insurance policy and insurance certificate on this article.

What is the difference between policy holder and insured on cargo insurance policy?

In some cargo insurance policies identify both policy holder and insured companies, whereas in some cargo insurance policies issued by defining only insured party.

On this article I will try to explain the meanings of "policy holder" and "insured". 

What does policy holder mean on a cargo insurance policy? What does insured mean on a cargo insurance policy.

More importantly are there any differences between these two terms as specified under marine cargo insurance contracts?

 

How to use Institute Strike Clauses in marine cargo insurance policies?

Strike risks, although mostly underestimated by the exporters and importers, could cause serious financial losses to the participants of international trade transactions.

Strikes at world sea ports is not an uncommon event. 

By making a quick google search, you can also see by yourself, how frequently business workflow of world sea ports have been interrupted by strikes.

Today I would like to explain how to eliminate strike risks via marine cargo insurance policies.

How to use Institute War Clauses in marine cargo insurance policies?

War risk is an important risk factor in international cargo transportation.

Most sea routes used by multinational carriers are passing through or near active war regions or potential war risk related areas.

Especially issuing banks in letter of credit transactions should take war risks very seriously and demand an insurance policy covering war risks.

Today I would like to explain the importance of "Institute War Clauses" in international insurance policies.

After reading this short article you should be able to understand whether current cargo insurance clauses cover war risks or not and how to get insured against war risks.