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insurance contract that would cover the interests of petitioner's
shippers. The proposal indicated that the documentation of
coverage under such a contract would be identified through a
"Service Instruction Agreement" and the declared value entry on
the bill of lading. AIGRM's proposal was based upon insurance
coverage for values in excess of $100, at a premium charge of 25
cents per $100 of insured value in excess of $100. Among other
things, AIGRM proposed that: (a) Premiums be remitted by
petitioner to NUF on a monthly basis less any losses paid and
loss expense incurred; (b) petitioner administer all claims under
the policy on behalf of NUF; and (c) petitioner be responsible
for bad debts or uncollectible items since NUF had no control
over the payment of premiums by shippers. Hall found the AIGRM
proposal to be more reflective of petitioner's requirements than
the Traveler's proposal and submitted the AIGRM proposal as its
recommendation for review by petitioner's management.
NUF prepared a "binder of insurance" under which it
described the insured as "United Parcel Service of America, Inc.
on behalf of its customers, shippers, consignees or other
interested parties, as Their Interest may Appear." The binder
described the insurance as "Shippers Interest". The rate or
premium under the binder was set at 25 cents per $100 of declared
value, and the insurance would become effective as of August 8,
1983.
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