I.A.(MR) key terms

A legal or financial relationship with the subject matter such that the insured benefits from its safety and suffers loss or prejudice from its damage, loss, or detention. Marine law requires it to attach at the time of loss.

The rule that insurance restores the insured financially to the position held before the loss, no better and no worse. Marine policies are contracts of indemnity, subject to agreed-value and sue-and-labour exceptions.

The mutual duty of insured and insurer to deal openly and honestly, disclosing every material circumstance known or presumed known. Breach may allow the insurer to avoid the contract under marine insurance law.

Any fact that would influence a prudent underwriter in fixing the premium or deciding whether to accept the risk. The insured must disclose such facts before cover is arranged.

Failure by the insured to reveal a material circumstance to the insurer before the contract is formed, whether deliberate or accidental. It entitles the insurer to remedies ranging from avoidance to a proportionate reduction of claim.

A false or misleading statement of fact made to the insurer that induces it to accept the risk or set the premium. It may be innocent, negligent, or deliberate, and the remedy depends on which.

A promise in the policy that a particular state of affairs exists or will be complied with. Breach discharges the insurer from liability from the date of breach, regardless of whether the breach caused the loss.

The dominant, effective, and operative cause of a loss, without which the loss would not have occurred. Marine claims are settled by identifying the proximate cause, not merely the last event in a chain.

Fortunes of navigation such as violent weather, grounding, collision, or sinking that are accidental and peculiar to sea transit. Ordinary wind and wave action, wear and tear, and inherent vice are excluded.

A partial loss of the insured subject matter caused by an insured peril and borne solely by the owner of the affected property, not shared across the venture. It contrasts with general average contribution.

A voluntary and extraordinary sacrifice or expenditure made intentionally and reasonably for the common safety of ship, cargo, and freight in a moment of peril, shared proportionately by all parties saved.

An internationally agreed set of rules governing the adjustment and apportionment of general average contributions between ship, cargo, and freight interests. Most marine policies incorporate them by reference.

A specialist who calculates general average contributions and apportions sacrifices and expenses among the parties to a maritime adventure, producing a binding adjustment statement.

The voluntary saving of maritime property in peril by persons with no contractual duty to do so. The salvor is usually rewarded from the property saved, and the reward is often shared as general average.

The insured's duty, and the insurer's obligation to reimburse reasonable costs, to take measures to avert or minimise a loss covered by the policy, even where the expenditure exceeds the insured value.

Loss of the whole insured subject matter, either actual where it is destroyed, sunk, or irretrievably lost, or constructive where it is abandoned as a commercial wreck.

A loss where the subject matter is not physically destroyed but is reasonably abandoned because recovery or repair would cost more than its insured value, or because it cannot be saved from peril.

The insured's notice to the insurer relinquishing all rights in the subject matter in exchange for a constructive total loss settlement. Once accepted, the insurer takes over the wreck and its liabilities.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue third parties responsible for the loss, recovering no more than the amount paid.

The right of an insurer that has paid a loss to recover a proportionate share from other insurers covering the same interest against the same peril, preventing the insured from recovering twice.

The situation where the same insured interest is covered by two or more policies against the same risk, so that the total sum insured exceeds the value. Each insurer contributes rateably.

A policy where the insured value is agreed in advance and is conclusive between the parties as to the insurable value of the subject matter, subject to proof of fraud.

A policy that does not fix the value of the subject matter in advance, so the insurable value is proved at the time of loss, up to the limit of the sum insured.

The subject matter of a marine policy, including the ship, cargo, freight, and any liability arising from the venture, whether at sea, in port, or on inland transit incidental to the voyage.

A marine policy covering the subject matter for a defined transit between named or described ports, beginning when the risk attaches and ending on safe arrival.

A marine policy covering the subject matter for a fixed period, usually twelve months, irrespective of voyages undertaken within that period. Common for hull and machinery cover.

The moment when the insurer's risk begins under a policy, often expressed as loading on board or departure from a named port. Losses before attachment are not covered.

A marine policy insuring the ship's structure, engines, and equipment against physical damage, typically written on a time basis with perils, warranties, and deductible provisions.

The state of a vessel being reasonably fit in hull, machinery, crew, and equipment to withstand the ordinary perils of the intended voyage. It is an implied condition in voyage policies.

The remuneration payable for the carriage of goods by sea. It is itself an insurable interest and can be covered against loss arising from the non-arrival of the cargo.

Standardised sets of clauses, designated A, B, and C, defining the perils and exclusions applying to cargo cover. Clause A is the widest, and C the most restricted.

Cargo cover under which all accidental loss or damage is insured except losses expressly excluded, rather than requiring the insured to prove a specific named peril caused the loss.

Cargo cover that responds only where the loss is proved to have been caused by one of the perils listed in the policy, such as fire, lightning, stranding, or collision.

A provision extending cargo cover from the time goods leave the consignor's warehouse at the place of departure until they are delivered to the consignee's warehouse at destination.

The cargo clause defining when cover attaches and terminates, including what happens on delay, deviation, transhipment, or storage after discharge.

An internal quality or natural tendency of the goods that causes them to deteriorate or damage themselves without external intervention, such as fermentation, decay, or spontaneous combustion. It is excluded from cargo cover.

A clause extending hull cover to losses from latent defects in machinery, negligence of master or crew, and similar internal causes that are not ordinary perils of the sea.

A cargo clause requiring the insured to take reasonable steps to avert or minimise loss and preserving the insurer's rights where those steps are taken, mirroring the sue and labour obligation.

A systematic inspection and report on a risk, vessel, or damaged property by a competent person to establish its condition, cause of loss, or extent of damage for underwriting or claims purposes.

The written record produced by a surveyor describing what was inspected, findings on condition or damage, likely cause, and recommendations, used to support underwriting decisions or claim settlement.

A person appointed to investigate a claim, determine its cause and quantum, and advise on the amount properly payable under the policy, acting fairly between insured and insurer.

A formal demand by the insured for indemnity under the policy, supported by evidence of loss, cause, and value, which the insurer must then validate against the cover granted.

Expenses incurred by or on behalf of the insured for the safety or preservation of the subject matter after a loss, other than general average and salvage charges, recoverable under the policy.

The amount of each loss that the insured must bear before the insurer pays, applied per claim or occurrence as stated in the policy, reducing small claims and moral hazard.

Insurance purchased by an insurer to transfer part of the risk it has accepted to another insurer, protecting its solvency and capacity without altering its obligations to the original insured.