A shipper obtains a marine policy covering the shipment of textiles from China to Poland. The declared value of the shipment was $15,000 although the real (market) value of the merchandise was $7,500. If the goods are lost at sea, is the insurance company liable for $15,000? Why?
In the exportation trade, risk is bound to be encountered. To protect themselves from any sort of risks, the shippers insure the cargo. The cargo risk can be insured against by using the marine insurance. The marine insurance is the insurance cover for the loss of ships, cargo, terminals and any cargo when the product is being transported from one place to another. This insurance aims at protecting the goods on transit against physical loss and damage (Mc Duffy, 2011).
The declared value of the product is the value of the cargo placed by the shipper. It is the value that the shipper is claiming on the packages that are being shipped from one destination to another. It is appropriate for the shipper's opinion to be on the basis on the market value of the goods. In case the goods are lost at sea, the insurance company will be liable for $ 15, 000 which is ...
The solution discusses international logistics.