Cargo insurance

1. What do we insure?

- general cargo only, for the duration of carriage (general cargo means cargo that has continuous packaging protecting it from external impact)
- transport and overhead costs related to the carriage
- expected profit from the sale of goods at the destination

2. Form of contract

The parties sign a General Cargo Insurance Contract (open cover) with a coverage period of 1 year, under which all shipments of the Policyholder are deemed automatically insured. Our Policyholders (clients) are direct cargo owners, both consignees and consignors. The main advantages of working under a General Contract:

- guaranteed coverage on pre-agreed terms and premium rates;
- a universal contract that meets the most diverse needs of clients;
- insurance coverage takes effect as soon as the goods (cargo) are at the Policyholder's risk;
- coverage for losses applies even when information on a specific shipment has not yet been provided to the Insurer;
- the cost of insurance under a General Contract is usually somewhat lower than under separate one-off insurance contracts;
- there is no need to execute a separate insurance contract for each specific shipment;
- exporters can include their own insurance costs in the price of goods when concluding a sale and purchase agreement;
- the method of paying the insurance premium may vary depending on the client's needs: once a year with subsequent recalculation at the end of the insurance period; on a quarterly basis; on a monthly basis based on the Policyholder's reports (declarations);

3. Territory of insurance and types of vehicles

The General Contract covers carriage by any mode of transport (sea, air, road, rail) worldwide, including within Kazakhstan and intra-city carriage. Any shipments to/from/within a country subject to UN or US Government sanctions are not covered. The General Contract may provide insurance coverage for the entire period of transportation "from warehouse to warehouse", including reloading, transshipment and intermediate storage.

4. Scope of insurance coverage

Insurance covering loss and/or damage during the transportation of cargo from one port/country to another. Transportation may be carried out by sea, by air or by land. The policy is designed to meet the individual needs of the Policyholder. Coverage may include all risks or only specified ones.

We have extensive experience in cargo insurance and operate on the basis of terms generally accepted in the international market. The cargo insurance terms were developed taking into account established international practice in cargo insurance and comply with the standard clauses established by the Institute of London Underwriters.

In accordance with the rules of transport cargo insurance, our company provides the Policyholder with four types of insurance coverage:

"All Risks"
When insuring on these terms, "Страховая компания AIG Kaзахстан" undertakes to indemnify losses caused by virtually any perils and accidents of carriage.

"With Particular Average"
When cargo is insured on these terms, losses from damage to or total loss of all or part of the cargo caused by natural forces, wreck or collision of vessels, aircraft and other means of conveyance, as well as losses due to a vessel or aircraft going missing, are indemnified. Losses caused by loss of or damage to cargo occurring during loading, stowage and unloading are also indemnified.

"Free of Damage Except in Case of Wreck"
When insuring on these terms, the Policyholder is guaranteed payment of insurance indemnity in the event of total loss of all or part of the cargo caused by natural forces, a vessel or aircraft going missing, accidents during loading and unloading of cargo, as well as for damage to cargo if it is caused by wreck or collision of the vessel, fire, explosion, etc.

"Storage Risks"
Under a contract concluded on this condition, losses from destruction, loss of or damage to all or part of the cargo resulting from unlawful acts of third parties (theft, robbery, deliberate destruction of or damage (spoilage) to cargo by means of arson, blasting, damage to the warehouse's utility networks, etc.), fire, explosion, ground subsidence or flooding by groundwater, as well as resulting from an accident (malfunction) of the water supply, heating or sewerage system, and natural disasters, are indemnified.

In addition to these basic terms, in our practice we widely apply various Clauses extending the scope of insurance coverage. For example, the "Free of Damage Except in Case of Wreck" terms may be extended by the clause "including losses resulting from theft and non-delivery of entire packages". In addition, so-called war or strike risks may be insured, i.e. damage resulting from military operations or strikes will be subject to indemnity. War risks are covered only in respect of sea carriage. Coverage for strike risks is provided only for land transportation, when the cargo follows a pre-planned route.

5. Standard exclusions from coverage

The Insurer is released from paying insurance indemnity if the loss occurred as a result of:

- intent and gross negligence of the Policyholder
- insufficient or unsuitable outer packaging of the cargo
- the effects of a nuclear explosion, radiation or radioactive contamination, etc.
- terrorist acts and unlawful acts committed for political motives
- shortage of cargo with intact seals, both customs seals and those of the consignor
- delay in delivery of the cargo, even if it occurred as a result of an event whose risk is insured
- seizure, confiscation, requisition, arrest or destruction of the insured cargo by order of government authorities

6. Cargo for which coverage is not provided

- cash, precious metals;
- financial documents, banknotes, coins, securities, shares, cheques, etc.;
- bulk cargo;
- works of art and antiques;
- containers as cargo;

The level of insurance premium rates (the price of insurance) depends on the choice of insured risks, the type and packaging of the cargo, the distance of carriage, the period and method of transportation, intermediate storage or warehousing, the availability of security and escort for the cargo, and other factors reflected in the questions asked during risk assessment. As the volume of shipments increases, the premium rate may be significantly reduced. Our insurance rates are at the international level

8. We provide

cargo security, use of special devices to hinder access to the cargo, etc.).
- the most effective and widely represented worldwide network of average adjusters (claims agents) and partner surveying firms.
- special loss control programmes developed by our European division "Marine Loss Control and Engineering", opened in Rotterdam in February 1998 (by that time AIG Group companies already had similar reliable divisions in Latin America, the USA and Asia).

9. Special loss control and damage prevention programme (MLCE)

The technical department for loss control and damage prevention was established in the early 1990s to provide additional services to marine cargo customers. What distinguishes AIG from its competitors is that it offers more than simply appointing a cargo surveyor to prevent damage. The AIG Marine division set up a technical department for the prevention of damage in marine transportation (MLCE). Qualified marine engineers and ship captains were invited to AIG to provide professional damage prevention services to both underwriters and clients. Today, engineers of the technical damage prevention department work in Hong Kong, Singapore, Frankfurt, London, Buenos Aires, São Paulo, Mexico City and New York.

What are loss control and damage prevention services?

MLCE provides clients with assistance and support in the process of transporting and storing cargo in order to ensure timely, high-quality delivery of their goods to customers in the proper quantity. This requires organising measures to ensure the safety and security of cargo. To assist the client, we carry out a logistics analysis that includes transit control and security checks, packaging inspection, supervision of loading and storage, recommendations on securing cargo during transportation by road, rail, air or sea, as well as monitoring "critical aspects" for delay in start-up (DSU) insurance coverage. The main goal is to develop effective recommendations that can be easily integrated into the client's logistics structure.

These services are provided to our clients by a professional damage prevention team whose strategic location ensures high efficiency and quality of the services provided. All services are coordinated by our office in New York and delivered by an international team of specialists. This approach ensures that high-quality services are provided by professional surveyors under our direct management and control.

Given the scale and geographical reach of our operations, we also use a wide network of qualified independent marine surveyors around the world with experience in various areas of marine transportation. Our own damage prevention specialists coordinate the efforts of these experts in a number of areas in order to ensure quality control of the services provided to our clients

Specialists of the loss control and damage prevention team work in many countries around the world. The team has more than 200 years of combined experience in various fields related to the marine transportation industry. All our specialists have spoken at industry events and forums, and most have publications in specialised journals. Working closely with our clients' staff, we achieve success by getting to know the organisation of their operations and problem areas and finding solutions aimed at preventing damage.

This approach not only protects your interests during the carriage of cargo, but also helps strengthen relationships with the customers you serve.

AIG's cargo loss control and damage prevention division builds its activities on the confidence that our shared knowledge, resources and experience give us a leading position in risk management services for cargo transportation. Readiness to provide effective, high-quality services is our main distinguishing feature.

Measures to prevent damage to cargo will certainly pay off. We have noticed that about 80% of claims related to cargo damage could have been avoided if damage prevention measures had been taken. Therefore, we pay special attention to measures to prevent damage to cargo and to risk management during transportation.

Planning clients' risks is an essential part of risk management. If there are problem areas, we can find and propose alternative solutions and provide consulting services. During the most important stages, for example loading and unloading, more thorough follow-up control or inspection may be required. Our knowledge and experience can be particularly useful for transportation under special conditions. In addition to our own resources, we offer a global network of agents and surveyors. A link to the international Seaways system makes it possible to obtain information, valuable for risk assessment, about the vessels the customer intends to use. For warehousing during transportation, we have developed the Navigator warehouse risk survey programme. Our consulting and training services allow us to assist clients in all aspects of preventive measures to prevent damage to cargo. These services are provided to our clients by a professional damage prevention team whose strategic location ensures high efficiency and quality of the services provided. All services are coordinated by our office in New York and delivered by an international team of specialists. This approach ensures that high-quality services are provided by professional surveyors under our direct management and control.

10. A loss – what to do?

- take all possible measures to salvage and preserve the damaged cargo;
- notify the Insurer of the incident immediately;
- secure the right of recourse against the party at fault; When claiming insurance indemnity, the Policyholder is obliged to prove with documents: - their interest in the insured property;
- the fact of occurrence of the insured event;
- the amount of their claim for the loss; Indemnity is paid on the basis of the actual (real) value of the insured cargo, and the insurance premium is likewise paid on the basis of the same valuation.

11. Claim documents (These are the documents the Insurer needs in order to make a payment for a loss)

- documents of title to the cargo;
- invoice;
- waybill;
- cargo inspection report, commercial report;
- survey report, in case of damage to the cargo;
- documents confirming additional expenses incurred;
- certificates from government authorities, where the investigation of the insured event falls within their competence;
- formal claim to the Insurer;
- documents securing the right of recourse against the party at fault (carrier, charterer);