Introduction:
International commercial insurance is coverage for businesses and corporations, generally designed to cover the business, its employees and ownership. Since there are so many types of businesses with different needs and situations, commercial insurance can come in many shapes, sizes and colors.
International Commercial insurance overview:
Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed amount called premium to pay the other party on the happening of a certain event.
At a basic level, commercial insurance is aimed at helping businesses stay protected against risks than may threaten its success. Depending on the Commercial lines’ coverage, it can be specifically aimed at protecting the reputation, wellbeing and financial situation of a business entity, as well as the employees working for the business.
Working in international business requires all individuals and entities to comply with insurance standards. Given that the individual is operating abroad, therefore, domestic insurance laws and regulations are no longer applicable and international insurance is involved. International insurance is based on the laws and regulations established by various conventions and treaties. This type of insurance has a different title, one of the most important of which is international transportation insurance, which we will cover below.
Principles of International Commercial Insurance:
In the insurance world there are six basic principles that must be met i.e., insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution.
Insurable Interest
The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized.
Utmost good faith
An action to disclose accurately and completely, all facts material (material fact) about something that will be insured is requested or not. The meaning is: the insurer must honestly explain everything clearly about the extent of the terms/ conditions of the insurer and the insured must also provide a clear and correct for objects or interests of the insured.
Proximate cause
Proximate cause is an active and efficient cause that chain of events that lead to a result without the intervention of the start and working actively from a new and independent.
Indemnity
One mechanism by which the insurer provides financial compensation to place the insured in financial position that he had prior to the loss.
Subrogation
Right transfer request from the insured to the insurer after a claim is paid.
Contribution
While the insurer the right to invite any other person equally bear, but do not have the same obligations to the insured to participate in providing indemnity.
Types of International Commercial Insurance:
There are many types of international commercial insurance. A few of the most common include:
International transportation insurance
we all know that this type of transport involves many different ways. International transportation is actually the transportation of goods from one country to another. In the case of international transport insurance, the insurance contractor or the same insurer undertakes to pay for the loss incurred by the employer or insurer in the whole process of freight transport along the route in the event of any loss to the employer. Compensate according to the provisions and materials mentioned in the insurance contract concluded between the parties.
International transportation takes place in a variety of ways, including air and land. The losses that may be incurred by the goods and freight in each of these methods will also be different, and therefore the provisions and items placed in the relevant international transportation insurance will also vary. Types of international transportation insurance include the following:
- Land Transportation Insurance
- Maritime Insurance
- Aviation Insurance
- International Export Insurance
- Imported international insurance
Product liability
As the name suggests, Product Liability insurance protects businesses in the event that their products cause injury or death to someone or loss or damage to other people’s property. If this happens, businesses could potentially be sued for compensation. Product Liability offers protection from this risk including costs and expenses.
Professional Indemnity
Professional indemnity (PI) insurance covers you in the event of you providing negligent or sub-standard services or advice that caused harm or damage in some way.
Trade Credit
Trade Credit insurance gives businesses protection in the event their customers do not pay their invoice and therefore protects against bad debt. In light of the increased number of insolvencies due to the economic downturn caused by the global pandemic, Trade Credit insurance is becoming more and more in demand.