III IC-67 cheat sheet

Utmost good faith (uberrimae fidei): the assured must disclose every material circumstance known to them before cover attaches; a circumstance is material if it would influence a prudent underwriter's judgment on acceptance, premium or terms.

Insurable interest: the assured must stand to benefit from the safety of the subject-matter or be prejudiced by its loss. In marine insurance the interest must exist at the time of loss, not necessarily at inception (contrast with life insurance).

Indemnity: the assured is restored to the financial position held immediately before the loss, never better. New-for-old is not given; deductions for wear, tear and depreciation apply to partial losses.

Proximate cause: liability attaches to the dominant, efficient cause of loss, not the last or most remote cause. Where perils operate concurrently, the insured peril that is proximate prevails.

Actual total loss: subject-matter is destroyed, so damaged as to cease to be a thing of the kind insured, or irretrievably lost (e.g. vessel missing for a reasonable period, presumed total loss).

Constructive total loss: subject-matter is reasonably abandoned because actual total loss appears unavoidable, or because the cost of recovery and repair would exceed the insured value. Notice of abandonment must be given to insurers.

Particular average: a partial loss of the insured subject-matter borne by the owner of that property alone, as distinct from general average contribution which is shared by all parties to the adventure.

General average: an extraordinary sacrifice or expenditure intentionally and reasonably made for the common safety of ship, cargo and freight is shared proportionately by all saved interests, adjusted per the York-Antwerp Rules.

Sue and labour: the assured's duty (and right to recover) for reasonable expenses incurred to avert or minimise a loss covered by the policy, recoverable in addition to the sum insured.

Institute Cargo Clauses (A) is all-risks cover subject to exclusions; (B) and (C) are named-perils lists, with (C) narrower than (B). Neither (B) nor (C) covers theft, non-delivery or general breakage.

Cargo cover attaches from the time goods leave the warehouse at the place named in the policy and terminates on delivery to the consignee's warehouse, or on expiry of 60 days after discharge at the final port, whichever first occurs.

Hull and machinery policies are typically on a valued basis; the agreed value is conclusive between the parties absent fraud, so the measure of indemnity for a total loss is the insured value, not market value.

Institute Time Clauses (Hulls) include a 3/4 collision liability clause: insurers pay three-quarters of the assured's liability to the other vessel, with the remaining quarter left with the assured (or covered elsewhere).

Running down clause and sistership clause: liability to a sister ship is treated as liability to a third party, but recovery is limited to the proportion that the insured value of the offending ship bears to its sound market value.

Perils of the sea: fortuitous accidents or casualties of the sea, not the ordinary action of wind and waves. Ordinary wear and tear, inherent vice and ordinary leakage are excluded.

Inchmaree clause covers loss from accidents in loading, discharge, navigation, or from latent defects in machinery and hull, provided due diligence has been exercised by the assured and management.

Both-to-blame collision clause: where both vessels are at fault and cargo owners are forced to pay the non-carrying vessel's share, the carrying vessel may recover that amount from cargo, preserving the contractual exemption.

Claims documentation for cargo: original policy or certificate, bill of lading, commercial invoice, packing list, survey report and letter of subrogation; subrogation transfers the assured's rights against third parties to insurers on payment.