IRDAI Surveyor Marine Cargo (S-03) key terms

The legal duty on both insured and insurer to disclose all material facts relevant to the risk honestly and without concealment. Breach by the insured can let the insurer avoid the cargo policy.

A financial stake in the cargo such that the holder benefits from its safe arrival and suffers loss if it is damaged or lost. Required at the time of loss for a valid claim.

The rule that a marine cargo claim should restore the insured to the same financial position as before the loss, no better and no worse. It caps recovery at the insured value.

Any information that would influence a prudent underwriter's decision on whether to accept the cargo risk, or on what terms and premium. Must be disclosed before cover is bound.

Failure by the insured to reveal a material fact to the underwriter, whether innocent or deliberate. It may entitle the insurer to avoid the policy or reduce a claim.

Standard London market wordings defining cargo cover on an all-risks (A), named-perils-plus (B), or restricted named-perils (C) basis. They set insured perils, exclusions, duration and claim duties.

Cover under Institute Cargo Clauses (A) that responds to any accidental loss or damage to cargo, subject to the stated exclusions. The burden of proving an excluded cause does not apply rests on the insurer.

Cover that responds only to perils expressly listed in the policy, as under Institute Cargo Clauses (B) and (C). The insured must prove the loss was caused by a listed peril.

The transit clause defining when cover attaches and terminates, typically from the consignor's warehouse through ordinary course of transit to the consignee's warehouse, with stated cut-offs.

The dominant, effective and efficient cause of a loss, determined as a matter of fact and not merely the last event in time. It decides whether a cargo claim falls within cover or an exclusion.

A fortuitous event or hazard, such as fire, sinking, collision or theft, that may cause loss or damage to cargo. Policies cover specified perils or all risks subject to exclusions.

The requirement that a loss arise from an accidental or unexpected event rather than from the certain or inevitable nature of the goods. It underpins the distinction between insured perils and inherent vice.

The internal tendency of particular goods to deteriorate, spoil, ferment or self-heat without external accident, such as moisture in grain or natural ripening of fruit. It is normally excluded from cargo cover.

A long-standing maritime principle requiring all cargo interests to share proportionately in a sacrifice or extraordinary expenditure intentionally made to save the adventure from a common peril.

A partial loss accidentally suffered by one cargo interest alone, not shared with others. It is recoverable under the cargo policy only if the loss exceeds any franchise or deductible.

A specialist who collects general average contributions, apportions sacrifices and expenses among ship, freight and cargo, and issues the adjustment. Cargo must contribute before release of goods.

A document signed by cargo interests undertaking to pay their general average contribution, allowing the carrier to release the cargo before the adjustment is completed.

The rescue of cargo or ship from peril at sea, giving the salvor a right to reward under maritime law. Salvage charges are distinct from general average contributions.

A policy clause reimbursing the insured for reasonable costs incurred to avert or minimise a loss covered by the policy, in addition to the sum insured.

A stated amount or percentage below which a partial cargo loss is not payable at all. Once the threshold is exceeded, the whole loss becomes recoverable.

A document issued under an open or floating cargo policy evidencing that a particular shipment is insured. It is not itself the policy and is often required for letters of credit.

A standing agreement under which the insurer automatically accepts all shipments falling within its terms, and the insured must declare them. Individual certificates are issued per shipment.

The insured's periodic or per-shipment notice to the insurer under an open cover, stating details of goods, value, vessel and voyage so that cover is confirmed.

A written amendment to a cargo policy that alters, adds to or restricts its terms, such as a change of voyage, increased value or added peril. It forms part of the contract.

The amount on which premium and claim are based, commonly the invoice or CIF value plus an agreed percentage for expected profit and charges. It caps the indemnity.

The condition of a vessel being reasonably fit in hull, equipment and crew to carry the intended cargo through the contemplated voyage. Cargo cover is not a warranty of the ship's fitness.

A policy exclusion removing liability for loss arising from the vessel's unfitness, where the insured had knowledge of it at the time of loading. It protects insurers from knowingly bad shipping arrangements.

Carriage of cargo in standard sealed metal boxes that protect goods and speed handling. Surveyors assess container condition, sealing, stowage and any resulting condensation damage.

The manner in which cargo is arranged, secured, ventilated and separated on board or in a container. Poor stowage can cause damage and may affect recoverability.

Wet damage caused by condensation forming on cargo or container surfaces when warm moist air meets a cold surface during transit. Often linked to ventilation and stowage choices.

The reasonable care expected of the insured and the carrier in packing, stowing and shipping goods, and of the surveyor in investigating a loss. Failure can reduce or defeat a claim.

The surveyor's written record of inspection, including facts observed, documents examined, cause of loss and recommendations. It is the main evidential basis for claim assessment.

An inspection carried out together by surveyors representing cargo and carrier or insurer interests, producing agreed findings. It reduces later disputes over the extent and cause of damage.

A written statement by the insurer or surveyor that the claim is being investigated without admitting liability. It preserves defences while evidence is gathered.

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, such as the carrier or a negligent third party.

The insured's duty to take reasonable steps to prevent or reduce loss after an incident, for example by reconditioning or re-selling damaged cargo. Costs may be recoverable under sue and labour.

Insurance bought by an insurer to transfer part of its cargo risk to another insurer. It does not change the original insured's rights against the first insurer.

Sharing of a single risk by two or more insurers, each accepting a stated percentage of the same terms, or a clause requiring the insured to bear part of each loss.

The process of assessing a cargo risk, deciding whether to accept it, and setting terms, limits and premium based on goods, packing, route, carrier and claims history.