I'm new to this forum and fairly new to letters of credits. A recent personnel illness has prompted a few of us to learn some new things pretty quick and on the fly. One of the issues that I've been dealing with is obtaining a letter of credit from an international customer. Getting one prepared was the easy part. Reviewing and understanding all requirements, etc. for acceptance has not been so easy.
One of the beneficiary documents required in sectin 46A refers to "a full set of insurance policy/certificate endorsed in blank for 110pct of the invoice value with claims payable in the currency of the applicants origin covering all risk." Is this terminology common? I questioned our freight forwarder and they thought we could have a problem with this language and suggested we request that a "beneficiary certificate" be accepted instead. FYI - The product being shipped to the buyer is edible.
Any help or suggestions would be greatly appreciated. Thank you.
l/c beneficiary insurance requirements
Hi,
First of all please check what your sales agreement states about the insurance details and the risks to be covered.
I guess the incoterm in the l/c is CIF or CIP and in that case must give proof of insurance under the l/c by presenting a negotiable insurance document.
I have never seen the wording" claims payable in the currency of the applicant's origin".
In the event of a claim the applicant might want to avoid litigation in a foreign jurisdiction and therefore the credit may stipulate that claims are payable in the home jurisdiction of the applicant so e.g the phrase used could be: claims , if any, payable in (name of country applicant).
or e.g.2) claims, if any, payable in (name of country applicant) in the currency of the l/c.
I hope this answer clarifies a bit in any case you should contact applicant and discuss the terms on which you can have the insurance document issued and then have the l/c amended accordingly.