IRDAI Surveyor Marine Cargo (S-03) cheat sheet

Marine insurance is a contract of indemnity: the assured is restored to pre-loss financial position, never profit from a loss; valued policies fix the agreed value and displace later proof of value.

Insurable interest must exist at the time of loss (Marine Insurance Act 1963, Indian framework): a buyer under an unfulfilled CIF contract may still hold a contingent interest.

Uberrimae fidei (utmost good faith) obliges both parties to disclose all material circumstances; non-disclosure or misrepresentation renders the contract voidable at the insurer's option.

Proximate cause governs recovery: the efficient, dominant cause of loss decides coverage, not the first or last event in the chain.

Warranties in marine policies must be exactly complied with; breach discharges the insurer from liability for losses arising after the breach, unless the warranty is waived.

The Marine Insurance Act 1963 (India) codifies indemnity, insurable interest, disclosure, warranties, and the measure of indemnity; the Insurance Act 1938 and IRDAI regulations govern conduct.

An insurable interest includes any legal or equitable relation to a marine adventure such that the assured benefits from its safety and is prejudiced by its loss.

Doctrine of subrogation arises on payment of a total loss or a partial loss within the sum insured; the insurer steps into the assured's rights of recovery against third parties.

Constructive total loss arises when the subject matter is abandoned because actual total loss appears unavoidable, or cost of recovery and repair would exceed its value.

ICC (A) is all-risks cover with named exclusions; the burden of proving an exclusion applies rests on the insurer, while the assured must show the loss occurred during the insured transit.

ICC (B) and (C) are named-perils cover: the assured must prove the loss was caused by a listed peril; unlisted perils are not covered.

ICC (C) covers only major perils: fire or explosion, vessel stranding, grounding, sinking or capsizing, overturning or derailment of land conveyance, collision, and discharge of cargo at a port of distress.

ICC (B) adds earthquake, volcanic eruption, lightning, water damage from sea, lake or river, washing overboard, and total loss of a package overboard or dropped during loading.

Common ICC exclusions: wilful misconduct of the assured, ordinary leakage, ordinary wear and tear, insufficient or unsuitable packing, inherent vice, delay, insolvency, and use of atomic weapons.

ICC transit clause (Clause 8) attaches cover from the time goods leave the warehouse for the commencement of the transit and terminates on delivery to the consignee's warehouse or on expiry of 60 days after discharge.

Both-to-blame collision clause in cargo cover protects the assured's liability to the carrying vessel under a collision clause in the bill of lading.

Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo) are separate covers; ICC (A) excludes war and strikes unless these clauses are separately attached.

Perils of the seas means fortuitous accidents or casualties of the sea, not ordinary action of wind and waves; ordinary heavy weather is not a peril of the sea.

Inherent vice is a quality of the goods themselves that causes deterioration without external accident: e.g., spontaneous combustion of coal, fermentation of grain, natural shrinkage.

Insufficient packing exclusion applies when packing is inadequate for the ordinary risks of the contemplated transit; the surveyor must distinguish packing failure from carrier mishandling.

Proximate cause is the efficient cause that sets the chain in motion; remote causes are disregarded, so a loss by seawater entering through a broken hatch caused by a collision is a collision loss.

Loss caused by delay is excluded even when the delay itself results from a covered peril; consequential loss such as market decline is also excluded.

Wilful misconduct of the assured is excluded; negligence of the assured is generally not excluded under ICC (A), but is treated differently under (B) and (C).

Insufficiency of containers or packaging is judged against the ordinary handling of the insured transit, not against extraordinary mishandling by the carrier.

Where a loss is caused by a sequence of events, the surveyor's report must identify the dominant, efficient cause and explain why other causes were subordinate.

A voyage policy covers a single defined transit; a time policy covers a defined period, usually up to 12 months, and is standard for hull rather than cargo.

A valued policy states the agreed value of the goods; an unvalued policy leaves value to be proved at the time of loss, subject to the sum insured limit.

A floating (open) policy covers multiple shipments automatically within agreed terms; a declaration is made for each shipment and a certificate of insurance is issued.

A certificate of insurance evidences cover under an open cover but is not itself a policy; it must be presented with the bill of lading for a CIF sale.

A blanket policy covers all shipments without individual declarations; a specific policy covers one identified consignment.

Endorsements amend the policy: change of voyage, change of destination, increase in sum insured, addition of war or strikes cover, or named-perils extension.

CIF and FOB terms determine who bears risk at the point of shipment; the surveyor must confirm the insured party's insurable interest at the time of loss.

A warehouse-to-warehouse clause extends cover from the seller's premises to the buyer's premises, subject to the transit clause's time limits.

Seaworthiness is the carrier's obligation under the Hague-Visby Rules (Article III) and is not a cargo assured's duty; the cargo surveyor records it as a cause, not as a defence against the assured.

Cargo must be packed to withstand ordinary transit: export-worthy packing, inner cushioning, moisture barriers, and correct marking of fragile or this-way-up cargo.

Container stuffing: heavy cargo at the bottom, weight distributed evenly, lashing and dunnage to prevent shifting, and a verified gross mass (VGM) declaration under SOLAS.

Reefer containers require pre-trip inspection, correct set-point temperature, and continuous data logging; a temperature deviation record is central evidence in reefer claims.

Stowage on deck versus under deck affects exposure to seawater and washing overboard; deck cargo requires specific agreement and is often excluded unless declared.

Cargo sweat and ship sweat arise from condensation; ventilation, hygroscopic cargo, and temperature cycling across climate zones are key survey considerations.

Container damage, contamination, and cross-stuffing of incompatible cargo (e.g., odorous goods with food) are frequent causes of cargo loss.

Lashing calculations and securing arrangements must comply with the CSS Code and the vessel's cargo securing manual.

The surveyor's report should record: policy and certificate details, voyage, cargo description, date and place of survey, extent of damage, cause, and quantum with supporting documents.

Standard documents: policy or certificate, bill of lading, invoice, packing list, survey report, photographs, repair or reconditioning estimates, and salvage sale records.

Joint survey with the carrier's representative preserves evidence and supports later recovery; the surveyor should record the carrier's observations and any protest.

Damage assessment methods: sound market value versus damaged market value, cost of repair, or gross proceeds of salvage sale, applied consistently to the whole consignment.

Notice of loss must be given promptly to the insurer and to the carrier; a clean receipt (no remarks on delivery) weakens a later claim against the carrier.

Photographic evidence should be dated, show container and seal numbers, and depict the damage in context before any re-stacking or re-packing.

The surveyor must state the cause of loss and the clause under which it falls, not merely describe the damage; the insurer relies on this for admissibility.

Salvage sale of damaged cargo requires the insurer's consent where practicable; proceeds are credited against the claim.

Particular average is a partial loss borne solely by the owner of the damaged cargo; it is not contributed to by other parties.

General average is a sacrifice or extraordinary expenditure intentionally and reasonably made for the common safety; all parties to the adventure contribute in proportion to their saved values.

York-Antwerp Rules govern general average adjustment; the 1994 and 2016 versions differ on salvage remuneration and time limits, so the policy must specify which applies.

General average sacrifice examples: jettison of cargo, damage from firefighting, and extraordinary expenditure such as port of refuge charges.

General average contribution is calculated on arrived sound values; the cargo assured is liable for its share even if its own goods were undamaged.

Sue and labour clause obliges the assured and insurer to act to avert or minimise loss; reasonable costs are recoverable in addition to the sum insured.

Salvage under Lloyd's Open Form is a reward for saving property at sea, distinct from general average; the amount is determined by arbitration, not by the policy sum insured.

A general average guarantee or bond may be demanded by the shipowner before delivery; the cargo insurer typically issues the guarantee.

Claim documents in cargo: policy or certificate, invoice, packing list, bill of lading, delivery receipt, survey report, claim bill with calculation, and letter of subrogation.

Subrogation transfers the assured's rights against third parties to the insurer upon payment; it cannot exceed the amount paid and does not apply until payment is made.

Recovery against the carrier is limited by Hague-Visby package or weight limits (666.67 SDR per package or 2 SDR per kg, whichever is higher, under the 1996 Protocol).

Time bars: suit against the carrier under Hague-Visby must be brought within one year of delivery; the surveyor must flag this to preserve recovery.

Deductibles and franchise clauses affect the payable amount: a franchise waives the deductible if the loss exceeds it, while a deductible is always deducted.

Under-insurance triggers average: the insurer pays the claim in the proportion that the sum insured bears to the insurable value.

Double insurance: where the same interest is insured with more than one insurer, contribution is rateable among insurers and the assured cannot recover more than the loss.

Claim settlement must be documented with a discharge voucher; the surveyor's report forms the basis of the insurer's liability decision.

Co-insurance: several insurers cover a single risk under one policy with a lead insurer and agreed percentages; each is liable only for its share unless the policy provides joint and several liability.

Reinsurance is the insurer's own cover; the original assured has no direct right against the reinsurer except under specific statutory or contractual provisions.

Facultative reinsurance covers a single risk by offer and acceptance; treaty reinsurance covers a portfolio automatically under pre-agreed terms.

Quota share and surplus treaties cede proportional shares; excess of loss treaties protect against large individual losses above a retention.

Underwriting factors for cargo: commodity, packing, route, carrier quality, vessel age and flag, transit duration, season, and claims history.

Rating considers the Institute Cargo Clauses selected (A, B or C), the sum insured, the voyage, and any extensions such as war or strikes.

Accumulation control: an underwriter must monitor exposure on a single vessel, port or route to avoid catastrophic aggregation.

Moral hazard and adverse selection are assessed through disclosure, inspection, and prior claims experience.

IRDAI licenses surveyors under the Insurance Surveyors and Loss Assessors Regulations; a surveyor must hold a valid licence and act within its category.

A surveyor cannot accept a survey assignment where a conflict of interest exists, such as a financial interest in the cargo or a prior role for the carrier.

The surveyor must be independent and impartial; fees must not be contingent on the amount of the claim admitted.

IRDAI requires the surveyor to submit the report within 30 days of the assignment, extendable with recorded reasons where the insurer agrees.

Confidentiality: policy, claim, and commercial information must not be disclosed without authorisation.

The surveyor must record findings truthfully; misrepresentation of damage or quantum is a professional and regulatory violation.

Continuing professional education and adherence to the code of conduct are conditions of holding a surveyor licence.

The surveyor's report is advisory; the insurer decides liability, but the report must be complete enough to support an informed decision.