Marine Cargo Policy Covers, Clauses and Institute Cargo Clauses
Marine Cargo Policy Covers, Clauses and Institute Cargo Clauses
This domain tests how a cargo policy is assembled and how the three Institute Cargo Clauses sets differ in the perils they buy.
Structure of the cover
The policy consists of a schedule (assured, subject matter, voyage or period, sum insured, premium, deductible) plus operative wording and the incorporated Institute clauses or bespoke manuscript clauses, amended by endorsements such as deck cargo, container or f.a.p. wording. Cover may be single voyage, annual open cover with declarations, or a floating policy.
The 1/1/2009 sets
- (A) all risks of loss or damage, subject only to exclusions 4–7.
- (B) enumerated perils: fire/explosion, stranding, grounding, sinking or capsizing, overturning or derailment, collision or contact with an external object, discharge at a port of distress, earthquake/volcanic eruption/lightning, plus general average sacrifice, jettison, washing overboard, sea/lake/river water entry, and a package lost overboard.
- (C) only fire/explosion, stranding or similar casualty, land conveyance overturning, collision or contact, discharge at a port of distress - no earthquake, no washing overboard, no water entry.
- All three include general average and salvage (clause 2), both-to-blame collision (clause 3), the same exclusions (wilful misconduct, ordinary leakage/wear and tear, inadequate packing, inherent vice, delay, charterers' or owners' insolvency, nuclear weapons), privy unseaworthiness (5.1), war (6) and strikes, riots and terrorism (7). Piracy is expressly excepted from the war seizure exclusion, so it is covered under (A) but not under (B) or (C).
Duration
Clause 8 runs warehouse to warehouse and ends on delivery to the final warehouse, on delivery to premises used for storage or distribution outside the ordinary course of transit, or 60 days after discharge from the overseas vessel, whichever happens first.
Worked example
Laptops are stolen by stevedores during transhipment. Under (A) theft is an unexcluded all risk and the claim is paid; under (B) or (C) theft is not an enumerated peril, so nothing is payable. If the same consignment had been left on the quay for 75 days after discharge before delivery, cover would have ceased at day 60 regardless of wording.
Marks-losing traps
- Assuming (B) covers theft, non-delivery or water damage from rain.
- Assuming (A) covers delay, ordinary leakage or insolvency.
- Forgetting war and strikes are excluded everywhere and need separate Institute War and Strikes Clauses.
- Overlooking the 60-day post-discharge cut-off.