CIIG Advanced Diploma key terms

Standard international trade terms published by the ICC that allocate costs, risks and delivery obligations between buyer and seller, determining when risk of loss passes and therefore who must insure the cargo.

A trade term under which the seller arranges and pays for carriage to the named destination port and must obtain minimum cargo insurance cover for the buyer's benefit, typically on Institute Cargo Clauses (C).

A trade term under which the seller delivers goods on board the vessel at the named port and risk passes at that point, so the buyer normally arranges and buys the marine cargo insurance.

A legal or financial relationship to the goods whereby the insured benefits from their safe arrival and suffers loss or prejudice if they are damaged, required for a valid cargo claim.

The core insurance principle that the insured is restored, financially, to the position held before the loss, no better and no worse, subject to policy limits, deductibles and sums insured.

The mutual duty on insured and insurer to deal openly and disclose all material circumstances affecting the risk, breach of which may allow the insurer to avoid the contract.

Any circumstance that would influence a prudent underwriter's decision on whether to accept a cargo risk and on what terms and premium, which the proposer must disclose.

Failure by the proposer to reveal a material fact to the underwriter, which may entitle the insurer to avoid the policy or reduce a claim depending on the applicable law and remedy regime.

The dominant, effective and operative cause of a loss, which determines whether the loss falls within the insured perils or is excluded, regardless of earlier or later contributing events.

Fortunate maritime accidents or casualties of a fortuitous nature arising from navigation or the sea, excluding ordinary wear and tear, inevitable loss and ordinary action of wind and waves.

The widest standard London market cargo cover, insuring all risks of loss or damage to the subject matter except those expressly excluded, with no closed list of insured perils.

A named-perils cargo cover narrower than (A), insuring risks such as earthquake, volcanic eruption, lightning, water damage from certain causes, washing overboard and total loss of packages overboard.

The narrowest of the three standard London market cargo clauses, covering catastrophic perils such as fire, explosion, stranding, grounding, collision, discharge at a port of refuge and sacrifice.

The express exclusions applying to the all-risks cover, including wilful misconduct, ordinary leakage, insufficiency of packing, inherent vice, delay, insolvency, war and strikes, and unseaworthiness or unfitness defences.

The transit clause extending cover from the time goods leave the named warehouse at the place of shipment until they are delivered to the final warehouse at destination, subject to termination provisions.

The clause defining when attachment, continuation and termination of cargo cover occur, including the 60-day limit after discharge for onward storage or distribution.

A maritime principle under which extraordinary expenses or sacrifices intentionally incurred to save ship and cargo from a common peril are shared proportionately by all parties whose property was saved.

A partial loss of or damage to the insured cargo itself, borne by the owner of that property and recoverable under the cargo policy, as distinct from a general average contribution.

A loss where the subject matter is not destroyed but is reasonably abandoned because actual total loss appears unavoidable, or because restoration costs would exceed the insured value.

The insured's notice to the insurer relinquishing remaining rights in the property when claiming a constructive total loss, which the insurer may accept or decline.

An internal defect or natural propensity of the goods to deteriorate, spoil or self-damage during ordinary transit, which is excluded because the cause lies in the goods themselves.

A state in which the vessel is not fit in hull, equipment, crew or stowage for the intended voyage, creating a defence or exclusion for the insurer in certain circumstances.

A cargo clause stating that the insurer waives any defence based on unseaworthiness or unfitness of the vessel or container, provided the insured acted with due diligence at attachment.

The reasonable care and enquiry expected of the insured, for example in selecting a carrier, packing goods or declaring shipments, and a condition of certain extended covers.

A clause requiring the insured to take reasonable measures to avert or minimise loss and to preserve rights of recovery against third parties, with associated costs recoverable under the policy.

Expenses reasonably incurred by the insured to prevent or reduce a loss covered by the policy, recoverable in addition to the sum insured where the clause so provides.

The insurer's right, after paying a claim, to step into the insured's shoes and pursue recovery from the party responsible for the loss, limited to the amount paid.

The disposal of damaged goods to mitigate loss, with proceeds credited against the claim so the insurer pays only the net loss after salvage realisation.

Steps taken to reduce or contain loss after an incident, such as reconditioning, forwarding or selling damaged cargo, which the insured is expected to take and which lower the claim.

Details the insured must declare under an open cover, such as vessel, voyage, goods, value and packing, enabling the underwriter to rate and accept each individual shipment.

A standing agreement that automatically insures all shipments falling within its scope during a period, on agreed terms, subject to declarations, limits and cancellation provisions.

The insured's notification of an individual shipment under an open cover, which attaches cover and provides the information the insurer needs to record and rate the risk.

Reinsurance of a single risk or shipment negotiated individually, giving the reinsurer the right to accept or decline and the cedant freedom to decide what to cede.

A standing agreement under which the reinsurer automatically accepts a defined class or share of risks written by the cedant, in exchange for premium and subject to treaty terms.

A proportional reinsurance arrangement in which the reinsurer takes a fixed percentage of every risk within scope, sharing premium, losses and expenses in the same proportion.

A proportional reinsurance treaty under which the cedant retains a fixed line per risk and cedes the excess up to an agreed multiple, sharing premium and losses proportionally.

Checks against embargo and restricted-party lists to ensure the insurer does not provide cover or pay claims involving prohibited trade, vessels, cargo or counterparties.

Adherence to applicable laws, regulations, sanctions and market codes governing cargo insurance conduct, including fair treatment of customers and anti-money-laundering obligations.