Marine Cargo Clauses A Collection of Non-Institute Clauses 2nd Edition by Joe Felice-Pace B.A. (Hons.), Lic.D. Marine Cargo Executive Consultant Middle Sea Insurance First Published 1998 Second Edition 2010 ISBN 1 85609 145 7 © Joe Felice-Pace 1998 © Joe Felice-Pace 2010 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Notice of Terms of Use All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publishers. While the advice given in this book (Marine Cargo Clauses A Collection of Non-Institute Clauses) has been developed using the best information currently available, it is intended purely as guidance to be used at the user’s own risk. Witherby Seamanship International accepts no responsibility for the accuracy of any information or advice given in the document or any omission from the document or for any consequence whatsoever resulting directly or indirectly from compliance with or adoption of guidance contained in the document even if caused by failure to exercise reasonable care. This publication has been prepared to deal with the subject of Marine Cargo Clauses. This should not however, be taken to mean that this publication deals comprehensively with all of the issues that will need to be addressed or even, where a particular issue is addressed, that this publication sets out the only definitive view for all situations. Printed and bound in Great Britain by Bell & Bain Ltd, Glasgow Published in 2010 by Witherby Seamanship International Ltd 4 Dunlop Square, Livingston Edinburgh, EH54 8SB Scotland, UK Tel No: +44(0)1506 463 227 Fax No: +44(0)1506 468 999 Email: info@emailws.com www.witherbyseamanship.com iii Foreword to the First Edition How often, in the busy world of marine insurance, has the practitioner been faced with the title of an unfamiliar clause or, even where the title is well known, been unable to find a copy of that particular clause in the office files? Frequently one sees the title to a clause that has more than one version in practice, with nothing to indicate which version it is intended shall apply to the contract. It was problems like this that led to the first standardisation of marine insurance clauses, culminating in the publication of the Institute Time Clauses in 1888. Not involved in this early standardisation, the cargo insurance market continued to attach a variety of miscellaneous clauses and wordings to the policy in a confused attempt to amend the basic cover provided by the SG Form but they, too, adopted standardisation in 1912 with the publication of the Institute FPA (free of particular average) clauses which, amongst other things, reduced the ambit of the WA (with average) cover in the SG Form. Universal acceptance of the Institute Cargo Clauses and their adoption as insurance conditions in other markets has illustrated their success. However, full standardisation is impossible to achieve in commercial insurance, where insurable interests range over a wide field of international trade. The ICC can provide only generalised insurance conditions, making no allowance for special requirements of underwriter or assured. So there remains a proliferation of insurance conditions, clauses and agreements that the underwriter finds it necessary to call on to complement the standard conditions, sometimes extending the cover and in other cases restricting it. It is not difficult to examine the insurance conditions provided by Institute clauses, for all these are to be found in a Reference Book of Marine Insurance Clauses published by Witherby Seamanship Ltd; but, until now, there has been no similar reference book available for consultation in respect of the Non-Institute clauses used in the marine insurance market. In attempting to fill this gap on the bookshelves of cargo insurance practitioners, Mr J Felice-Pace has taken upon himself the heavy responsibility of seeking out further elusive insurance wordings and clauses for inclusion in future editions, which I am sure will be demanded when the value of this work is realised, as it must be, by all those concerned with the insurance of goods in transit by sea and air. Robert H Brown F.lnst.A.M. Chartered Insurance Practitioner Marine Insurance Consultant and Author iv To Josephine as a token of gratitude for her patience. She and the sea have always been friends. v Preface When I took up marine insurance, Maurice Caruana-Curran, a leading Maltese judge, told me: “marine is dynamic”. This must be the reason why over the years there has developed a corpus of clauses meant to extend, restrict, modify or qualify the basic cover, given by the time-honoured Institute Clauses, according to new risks, needs or circumstances. Marine practice and its risks develop, and very rapidly. This collection of non-Institute clauses, endorsements, memoranda and warranties is by no means exhaustive. I have been amassing bits and pieces of paper for the past fifteen years. Identical, or very similar, copies have come from the most varied of sources. I have also come across verbatim reproductions that went unchecked and were reproduced in spite of very serious omissions or mistakes. Several underwriters and brokers must have other clauses. At times one has to construe a clause for a specific hazard. In fact, I would be grateful to receive a copy of other clauses, etc, or of important variations of those published, for inclusion in some future edition. I know that the day the finished book lands on my desk some other clause or exclusion will come about. It might be new. It might also have been around for years. My intention in offering this work for publication, which Alan Witherby took up with instant and great zest, was to share with other marine underwriters what I have collected. It might also provide some form of general cohesion. I have, in the main, retained wordings as I have found them. This is why some clauses are reproduced in a number of versions, each of which differs, at times slightly at times considerably, from the others. There must always have been a reason why one Underwriter adapted or changed a version used by another Underwriter. Given the nature of this book, which is a collection of material in circulation, I do not claim copyright in respect of any of the clauses. Indeed, it would be difficult to trace the ‘original’ clause to some specific source. The fact that I have received or can trace the same clause to, say, six or more sources shows how some of them have gone the rounds. I have added short comments to some clauses so that the book might also serve to give a word of advice on the perils underlying the extension of basic covers. Mainly, this work is concerned with a variety of non-Institute clauses that are used regularly, where appropriate, in marine cargo insurance contracts; but there are occasions when one sees clauses designed for the non-marine market incorporated in a marine insurance contract. For convenience of the reader, such clauses are shown herein, separately, in Part Two. Also shown in Part Two are some marine vi Marine Cargo Clauses, A Collection of Non-Institute Clauses insurance clauses that have not been used in the London market since the introduction of the MAR Policy Form and the phasing out of FPA cargo insurance contracts, but which can be seen in markets which continue to use the SG Policy Form and to offer the FPA form of cover. Research has shown that, in many cases, there is more than one clause used in practice under the same heading. Each version of these appears in the text under the common heading. It is for the underwriter to make clear, at the time the contract is being negotiated, which version is to apply. In cases of doubt, where the contract is concluded on a broker’s slip, a copy of the relevant clause should be affixed to the placing slip so that the correct interpretation is given to the agreement and the intended clause is attached to the policy or certificate, as the case may be. In conclusion I wish to acknowledge in a special way Alan Witherby’s promptness in accepting to publish the book, Robert Brown’s instant positive reaction as soon as he came to know of it and, of course, his valuable suggestions and foreword, Phil Vass of Wurttembergische UK Ltd for rummaging through his files to provide me with all sorts of material for what he described as a ‘mammoth task’, and David Deedman of the Legal and General for his immediate cooperation and vetting of the book. Thanks are also due to Joe Mallia of the Malta Branch of the Assicurazioni Generali, and Ray Schembri of AON Bain Hogg Malta. A special thanks goes to Mario Grech, Chairman and Chief Executive of Middle Sea Insurance, who placed the Company’s resources at my services. His dedication to insurance and to the professional training of insurers has always been an inspiration. Joe Felice-Pace Middle Sea Insurance Malta, 1998 I have little to add by way of a preface to this second edition except to say that I am pleased at the reception that the book received. This encouraged me to continue looking for ‘new’ clauses to be included in some future edition. It was, therefore, with great satisfaction that I accepted the invitation to have the publication placed on line, taking the occasion to add these ‘new’ clauses, numbering some hundred, to the collection. I thank all those who over the years brought to my attention non-institute clause that came to their attention, and hope that marine cargo insurance practitioners will continue to find the publication useful. vii Preface I have often been asked for my view regarding the applicability of these ‘non- institute’ clauses. The answer is a multiple one. There are clauses I would not touch with a barge-pole, others which I have used myself, and still others I would deal with care. Circumstances differ, and so does the underwriter’s judgement as to whether to apply one clause or another in addition to the ‘normal’ ICC Clauses. As a journalist would say, and I have practiced the profession for over half a century; When in doubt, leave out. Otherwise, do not be afraid of risks, that is what insurance is all about. Joe Felice-Pace Middle Sea Insurance Malta, 2009 ix Contents The clauses, endorsements, memoranda, warranties, etc. contained in this book are listed alphabetically. Clauses, etc. marked with an asterisk (*) in this index refer to partial headings of other memoranda. PART 1 A 3 Accessories Clause .................................................................................................4 Accumulation Clause ...............................................................................................5 Additional Discharge Expenses ...............................................................................6 Aircraft Clause .........................................................................................................7 Airfreight Replacement/Charges Clause .................................................................7 All Risks and all Loss and/or Damage Clause.........................................................9 All Risks Extension Clause ....................................................................................10 Alteration Clause ...................................................................................................11 Apportionment of Recoveries Clause ....................................................................12 Approved General Merchandise Definition ............................................................12 Arbitration Clause ..................................................................................................13 Assured Acting as Carrier Clause..........................................................................15 Atmospheric/Climatic Conditions Clause...............................................................16 Atomic, Biological and Contamination Exclusion...................................................16 Attachment/Termination of Transit Clause .............................................................17 Average Clause .....................................................................................................20 B 21 Bailee Clause ........................................................................................................22 Basis of Valuation Clause ......................................................................................22 Bending and Twisting Exclusion ............................................................................23 Bigham Clause ......................................................................................................24 Bills of Lading Clause ............................................................................................25 Biological Exclusion ...............................................................................................25 Blowing of Tins Exclusion ......................................................................................25 Books and Records Clause ...................................................................................25 Both to Blame Clause ............................................................................................26 Brands and Trade Marks Clause ...........................................................................27 Breakage Exclusion (Asbestos Sheets) Clause ....................................................28 Breakage of Eggs (In Shell) Exclusion ..................................................................28 Breakage of Glass (Fine Arts) Exclusion ...............................................................29 Breakage of Mirrors and Glass Exclusion .............................................................29 Breakage of Strings, etc, Exclusion .......................................................................29 Broker’s Cancellation Clause ................................................................................30 x Marine Cargo Clauses, A Collection of Non-Institute Clauses Bruising Exclusion .................................................................................................31 Bulls Cover ............................................................................................................32 Bursting and Blowing of Tins Exclusion .................................................................33 Buyer’s Interest Contingency Risks Clause ..........................................................34 C 37 Cancellation Clause...............................................................................................38 Capital Equipment Clause .....................................................................................39 Cargo Clauses (‘J’ Form) .......................................................................................40 Cargo ISM Endorsement JC98/019.......................................................................41 Cargo ISM Forwarding Charges Clause................................................................41 Cargo Termination of Storage in Transit Clause (For Warehousing and/or Storage Risks Insured in the Ordinary Course of Transit) .....................................43 Cargo Termination of Transit Clause (Terrorism) ...................................................45 Cartons and/or Cases Clause ...............................................................................46 Casing Warranty ....................................................................................................46 Cement Clauses ....................................................................................................47 Certificates Clause ................................................................................................47 Change of Destination/Deviation/Delay Clause.....................................................48 Change of Institute Clauses Clause ......................................................................49 Change of Interest or Voyage Clause....................................................................50 Change of Voyage Clause .....................................................................................50 Charterer’s Clause ................................................................................................51 Chipping Exclusion ................................................................................................51 Choice of Law Clause............................................................................................52 Civil Authority Clause.............................................................................................53 Claims Control Clause ...........................................................................................54 Claims Co-operation Clause..................................................................................55 Claims Preparation Costs ......................................................................................55 Claims Quantum/Payment Clause ........................................................................56 Claims Settling Authority........................................................................................56 Clarification Endorsement – Property Damage .....................................................56 Clause Paramount .................................................................................................58 ‘Claused’ Bill of Lading ..........................................................................................59 Cleaning, Dying, Repair or Renovation Exclusion .................................................59 Climatic Conditions Clause....................................................................................60 Climatic Conditions, Breakage of Strings, etc, Exclusion ......................................60 Coins Warranty ......................................................................................................60 Co-Insurance Clause .............................................................................................61 Co-Mingling Clause ...............................................................................................62 Combing Clause ....................................................................................................63 Commercial Vehicles Conditions ...........................................................................63 Commodity Trades Clauses ..................................................................................64 Companies Collective Policy .................................................................................64 Concealed Damage Clause...................................................................................65 Concealed Damage Extension Clause ..................................................................68 xi Contents Condensation Cover ..............................................................................................68 Conditions for Commercial Vehicles ......................................................................69 Confiscation and Detention Exclusion ...................................................................70 Confiscation and Expropriation Clause (L.P.O. 329) .............................................71 Confiscation and Expropriation Clause (L.P.O. 329) (Amended) ..........................73 Confiscation and Expropriation (Port of Refuge) Clause .......................................74 Confiscation and Expropriation (Port of Refuge) - Including Laundered Documents - Clause ..........................................................................................77 Confiscation and Expropriation Clause (Imports) ..................................................79 Confiscation and Expropriation Clause (Exports) ..................................................82 Consolidation, Repacking and/or Breakdown Clause ...........................................86 Consolidation and Deconsolidation Clause ...........................................................86 Container Clause ...................................................................................................87 Container Re-Coopering Clause ...........................................................................87 Container Shipments .............................................................................................87 Containerisation Clause ........................................................................................88 Containers and/or Railwagons Supplied by Shipowners or Others .......................88 Contamination Exclusion .......................................................................................89 Contamination Exclusion Clause ...........................................................................89 Contamination Inclusion Clause ............................................................................89 Contingency Clause ..............................................................................................91 Contingent Freight and Duties Clause...................................................................91 Contract Clause .....................................................................................................93 Contracting Clause ................................................................................................93 Contribution Clause ...............................................................................................94 Control of Damaged Goods/Merchandise Clause .................................................95 Conveyance Clause ..............................................................................................96 Country Damage Clause .......................................................................................97 Craft Clause...........................................................................................................98 Crop Dates Warranty .............................................................................................99 Crushing Clause ..................................................................................................100 Customs Detention of Storage Clause ................................................................101 Cutting Clause (Cables) ......................................................................................102 Cutting Clause (Pipes, Sheets or Tiles) ...............................................................102 Cutting Clause in Respect of Shipments of Steel Pipes ......................................102 D 103 Damaged Goods Clause .....................................................................................104 Date of Shipment(s) Warranty .............................................................................104 Dates Fumigation Warranty .................................................................................104 Debris Removal Clause .......................................................................................105 Declarations Clause ............................................................................................106 Declined Goods Clause .......................................................................................107 Deconsolidation Clause .......................................................................................107 Deductible Clause ...............................................................................................108 Definitions Clause................................................................................................109 xii Marine Cargo Clauses, A Collection of Non-Institute Clauses Delay Clause .......................................................................................................110 Delay to Cover, War Cargo ..................................................................................110 Delay in Opening Cases Clause..........................................................................110 Deliberate Damage – Pollution Hazard ...............................................................111 Demonstration Risks Extension...........................................................................111 Demurrage Risks .................................................................................................111 Denting Exclusion ................................................................................................112 Depreciation Exclusion ........................................................................................113 Depreciation Exclusion (Fresh Fruit) ...................................................................113 Deprivation Clause ..............................................................................................114 Detention of Storage by Customs........................................................................114 Deterioration Exclusion........................................................................................115 Deviation Clause .................................................................................................115 Difference in Conditions Clause ..........................................................................116 Difference in Conditions on ‘CIF’ Shipments .......................................................116 Direct Discharge Warranty ..................................................................................118 Direct Shipment Warranty ...................................................................................118 Disclosure Clause................................................................................................119 Discolouration Exclusion .....................................................................................119 Dismantling and/or Installation Clause ................................................................120 Dock Strikes or Labour Disputes Clause .............................................................121 Drawback Clause ................................................................................................122 Due Diligence Clause ..........................................................................................123 Duration of Coverage Clause (Irrespective of Terms of Purchase or Sale) .........124 Duty Clause .........................................................................................................125 Duty, Potential, Clause ........................................................................................126 E 127 Electrical Derangement Exclusion .......................................................................128 Electrical Derangement Inclusion ........................................................................128 Electronic Derangement Exclusion......................................................................128 Electronic Derangement Inclusion .......................................................................128 Embargo/Prohibition Clause ................................................................................129 Errors and Omissions Clause ..............................................................................130 Excess All Claims Clause ....................................................................................131 Excess Costs Clause...........................................................................................131 Excess/Deductible Clause ...................................................................................131 Excess General Average Clause .........................................................................132 Excess per Item Clause.......................................................................................132 Exhibition and/or Demonstration Risks Extension ...............................................133 Expropriation and Confiscation Clauses..............................................................136 Extension at Destination Clause..........................................................................137 Extra Expense Clause .........................................................................................138 xiii F 139 Fitness of Container Clause ................................................................................140 FOB, FAS and C&F Wording ...............................................................................141 FOB Shipments Clause .......................................................................................141 Fogging Exclusion Clause ...................................................................................142 Foreign Legal Provisions Exclusion.....................................................................143 Fraud Exclusion Clause.......................................................................................144 Fresh Fruit ...........................................................................................................145 Frozen Beef Knuckles Clause .............................................................................148 Frozen Food Clauses Extension .........................................................................148 Full Container Load Warranty ..............................................................................150 Full Reinsurance Clause .....................................................................................151 Full Value Declaration Warranty ..........................................................................152 Fumigation Clause...............................................................................................153 Fumigation Warranty ...........................................................................................154 Furniture in Transit (by Sea and Air) Clause........................................................155 G 157 Garbling Clause ...................................................................................................158 General Average Clause .....................................................................................159 General Average Guarantee Clause ...................................................................159 General Average in Full Clause ...........................................................................159 General Average, Salvage and Special Charges Clause ....................................159 General Merchandise ..........................................................................................161 Glass Clause .......................................................................................................162 Goods at Repairers’ Extension ............................................................................163 Goods Damaged Prior to Shipment Clause ........................................................163 Goods in Vehicles Under the Control of The Insured and/or their Employees ....163 Goods Purchased by the Assured on CIF Terms ................................................164 Goods Purchased by the Assured on FOB, FAS or C&F Terms ..........................165 H 167 Heating Exclusion ................................................................................................168 Held Covered Clause ..........................................................................................169 Hijacking Clause ..................................................................................................170 Hold Fumigation Warranty ...................................................................................171 Hook Damage Exclusion Clause .........................................................................172 Household Goods and Personal Effects Conditions ............................................173 Hull of Vessels or other Craft Made or Intended to be Waterborne or Airborne ....175 I 177 Important Instructions in Event of Claim ..............................................................178 Important Notice Clause ......................................................................................179 Contents xiv Marine Cargo Clauses, A Collection of Non-Institute Clauses Inaccuracy Clause ...............................................................................................182 Inchmaree Clause ...............................................................................................183 Increased Value Clause .......................................................................................184 Infestation Exclusion............................................................................................187 Inland Transport Clause ......................................................................................188 Insolvency Exclusion Clause (JC 93) ..................................................................189 Inspection by Customs Clause ............................................................................190 Installation Clause ...............................................................................................190 Interlocking Clause ..............................................................................................191 Inuring Clause .....................................................................................................192 ISM Endorsement JC98/019, Cargo....................................................................193 ISM Premium Clause...........................................................................................193 Issue of Certificates Clause .................................................................................194 J 195 ‘J’ Form ................................................................................................................196 The Jason Clause................................................................................................197 Java Tobacco Survey Clause ..............................................................................198 Jeddah Survey Clause ........................................................................................199 Jetty Clause .........................................................................................................200 Jurisdiction Clause ..............................................................................................201 L 203 Labels Clause ......................................................................................................204 Labels Clause (Extension)...................................................................................204 Label Clause (Exclusion) .....................................................................................205 Land Transit Clause (Fire, Collision and Overturning).........................................206 Late Discovery Clause.........................................................................................208 Late Penalties and Demurrage Charges .............................................................209 Leader’s Clause ..................................................................................................210 Leakage Excess Clause ......................................................................................210 Letter of Credit Clause.........................................................................................211 Levy Clause .........................................................................................................214 Liability of Carrier Clause ....................................................................................215 Liability of Carriers, Bailees or Other Third Parties Clause .................................215 Limit of Liability Exceeded ...................................................................................216 Limitation of Indemnity Clause ............................................................................217 Liner Negligence Clause .....................................................................................217 Live Lobster Endorsement...................................................................................218 Livestock Clause No. 1 ........................................................................................219 Livestock Clause (Aviation) No. 1 ........................................................................219 Livestock Clause No. 2 ........................................................................................220 Livestock Clause No. 3 ........................................................................................221 Livestock Clause No. 4 ........................................................................................222 Livestock Clause No. 1 L.S.1.(1972) ...................................................................223 xv Livestock Clause No. 1 (Amended) .....................................................................225 Livestock Clause No. 2 L.S.2. .............................................................................227 Loading and Unloading Clause ...........................................................................229 Lobster (Live) Clause ..........................................................................................230 Local Policies Clause ..........................................................................................231 Locking Warranty .................................................................................................231 Loss of Weight Exclusion (Almonds, Casein, Sultanas and the Like) .................232 Loss Payable/Payee Clause................................................................................233 M 235 Machinery Clause ................................................................................................236 Machinery and Equipment Casing Warranty .......................................................236 Machinery, etc. (Replacement) Clause ................................................................236 Machinery Parts Replacement Clause ................................................................236 Machinery Shipped by Trailer ..............................................................................236 Malicious Damage and Sabotage Clause (Lloyd’s LSW 237) .............................238 Marine Law and Practice Clause .........................................................................241 Marine Pollution Exclusion Clause 1/5/71 ...........................................................242 Mechanical Breakdown Clause ...........................................................................243 Mechanical Electrical and Electronic Derangement Exclusion Clause................243 Mechanical Electrical and Electronic Derangement Inclusion Clause .................243 Mildew Exclusion .................................................................................................244 Moth and Vermin Damage Exclusion Clause ......................................................244 Mould and Mildew Exclusion Clause ...................................................................244 N 245 Name of Insured (Extension) Clause...................................................................246 Negligence Clause ..............................................................................................247 New Crop Warranty .............................................................................................248 New Drums Warranty ..........................................................................................249 New Equipment ...................................................................................................250 New Machinery Clause........................................................................................250 New Plant &/or Equipment &/or Machinery Clause .............................................250 No Survey Clause................................................................................................250 Non-Contribution Clause .....................................................................................250 Non-Declaration Clause ......................................................................................252 Non-Delivery Clause............................................................................................253 Non-Delivery Losses Clause ...............................................................................253 Not Shipped on Deck Warranty ...........................................................................254 O 255 On Deck Shipments Clause ................................................................................256 On Deck/Under Deck Shipment Warranty ...........................................................257 On Deck Shipment (Timber) Warranty ................................................................257 Onus of Proof Clause ..........................................................................................258 Contents xvi Marine Cargo Clauses, A Collection of Non-Institute Clauses Overage ...............................................................................................................259 Overcarriage Clause............................................................................................260 Over-Declaration Clause .....................................................................................261 Oxidisation Exclusion ..........................................................................................261 P 263 Packers’ Premises Extension Clause ..................................................................264 Packing Clause....................................................................................................264 Pair and Set Clause.............................................................................................266 Paramount War Clause .......................................................................................267 Partial Loss Clause..............................................................................................269 Payment on Account Clause ...............................................................................269 Personal Effects Conditions ................................................................................270 PGM Personal Effects Clause .............................................................................270 Pickings Clause ...................................................................................................272 Pilferage Clause ..................................................................................................272 Pitting and Oxidisation Exclusion Clause ............................................................273 Policy Proof of Interest (PPI) ...............................................................................274 Policy Signing Clause ..........................................................................................275 Pollution Endorsement 1/5/71 .............................................................................276 Pollution Exclusion Clause ..................................................................................276 Pollution Hazard – Deliberate Damage ...............................................................277 Port Delay Clause................................................................................................278 Postal Sendings Clause ......................................................................................279 Potato Clause ......................................................................................................281 Potential Duty Clause ..........................................................................................282 Premium Finance Clause ....................................................................................283 Presentation Packing Clause ..............................................................................284 Private Motor Vehicles Exclusions.......................................................................284 Process Clause ...................................................................................................285 Professional Packing Warranty ...........................................................................287 Profit-Sharing Agreement Clause ........................................................................288 Profit Commission Clause ...................................................................................292 Profit Commission & 5 Year Deficit Clause..........................................................293 Prohibition Clause ...............................................................................................293 Proof of Posting Warranty ...................................................................................294 Proof of Value Warranty.......................................................................................295 Property Damage Clarification Endorsement ......................................................295 Q 297 Quarterly Notice Clause ......................................................................................298 R 299 Railwagons Supplied by Shipowners and Others................................................300 xvii Reasonable Despatch Clause .............................................................................301 Reconditioned Machinery Replacement Clause..................................................302 Reconditioning or Replacing Clause ...................................................................302 Recording Equipment and the Like and other Capital Equipment Clause ..........303 Refined Oils Special Terms .................................................................................304 Refrigerating Machinery Breakdown Clause .......................................................306 Refused/Returned Shipments Clause .................................................................307 Reinforcing Bars, Rods, Mesh, Steel Sheets, Steel Pipes, Tin Plate and Similar Interests ...............................................................................................308 Reinsurance Clause, Full ....................................................................................308 Re-Issue Clause ..................................................................................................309 Rejection Exclusion Clause .................................................................................311 Rejection (Inclusion) Clause ................................................................................311 Release Clause ...................................................................................................313 Removal of Debris/Cost of Transfer Clause ........................................................314 Repacking Clause ...............................................................................................315 Repacking and Repairing Packing Clause ..........................................................315 Repainting Exclusion ...........................................................................................317 Repairs Effected by the Assured .........................................................................318 Replacement by Air Clause .................................................................................318 Replacement (Machinery etc.) Clause ................................................................319 Restitution Payments Clause ..............................................................................320 Returned Items for Repair, etc. Clause ...............................................................321 Returned Shipment Clause .................................................................................322 Rust Oxidisation and Discolouration Exclusion Clause .......................................324 S 325 Sabotage Clause .................................................................................................326 Sale of Damaged Goods Clause .........................................................................327 Salvage Clause ...................................................................................................328 Salvage and Recovery Clause ............................................................................328 Salvage Waiver Clause .......................................................................................328 Scratching Chipping Denting and Bruising Exclusion Clause .............................329 Seals Intact Clause..............................................................................................330 Secondhand Machinery Replacement Clause ....................................................331 Seller’s Interest Clause .......................................................................................332 Seller’s Interest Declarations ...............................................................................338 Seller’s Interest in Respect of Shipments Sold by the Assured On FOB, C&F or Similar Terms .......................................................................................339 Several Liability Notice ........................................................................................340 72 Hour Stoppage and Pollution Buy-Back Clause .............................................341 Shipment Clause .................................................................................................342 Shore Risks .........................................................................................................343 Short Delivery Clause ..........................................................................................344 Shortage or Leakage Excess Clause ..................................................................344 Shortages from Container ...................................................................................344 Contents xviii Marine Cargo Clauses, A Collection of Non-Institute Clauses Shortlanding Claims Clause ................................................................................345 Shut-out Clause ...................................................................................................346 Simultaneous Payments Clause..........................................................................347 Skimming Clause.................................................................................................348 Small Claims Clause ...........................................................................................349 Sorting Charges Clause ......................................................................................350 Special Labels Clause .........................................................................................351 Special Replacement Clause (Air Freight and Duty) ...........................................352 Special Valuation Clause .....................................................................................353 Specialist Fees and Expenses ............................................................................354 Spotting Exclusion Clause ...................................................................................355 Sprouting Exclusion Clause.................................................................................356 Stain Exclusion Clause ........................................................................................357 Stamp Clause ......................................................................................................358 Storage Cover Exclusion .....................................................................................359 Storage Extension Clause ...................................................................................359 Stowing and Securing Clause .............................................................................360 Strike Expenses Clause ......................................................................................362 Strikes, Riots and Civil Commotions Warranty ....................................................362 Subject-Matter (Extension) Clause ......................................................................362 Subrogation Clause .............................................................................................364 Subrogation Waiver Clause .................................................................................364 Sue and Labour Clause .......................................................................................365 Suit Clause ..........................................................................................................366 Superseding Clause ............................................................................................367 Survey Clause (Some Versions also Called no Survey Clause) .........................367 Survey Fees Clause ............................................................................................369 Sweating and Condensation Cover .....................................................................370 Sweating and Heating Exclusion Clause .............................................................370 Sweating and Melting Clause ..............................................................................370 Sweating, Heating and Freshwater Damage Exclusion ......................................370 T 371 Teheran Clause ...................................................................................................372 Termination of Transit Clause ..............................................................................373 Termination of Transit Clause, Cargo (Terrorism) ................................................373 Testing Extension Clause ....................................................................................374 Theft, Pilferage, Short and/or Non-Delivery Clause ............................................375 Three Contracts Clause.......................................................................................376 Timber Products Clauses ....................................................................................377 To Follow Clause .................................................................................................378 Total Loss of Vessel only (Cargo) Clause ............................................................379 Total Loss only Clause.........................................................................................379 Trade Shortage Exclusion Clause .......................................................................380 Transhipments Clause .........................................................................................381 xix Transhipments War Rate .....................................................................................381 Transit by Inland Transport ..................................................................................382 Transit Extension Clause .....................................................................................382 Travellers’ Cheques and/or Cash and/or Tickets and/or Credit Cards and the Like Extension Clause ...............................................................................383 Twisting Exclusion ...............................................................................................384 Two Contracts Clause .........................................................................................385 U 387 Unaccompanied Baggage (by Sea or Air) Clause ...............................................388 Unattended Vehicle Warranty ..............................................................................390 Under Deck Shipments Warranty ........................................................................391 Undiscovered Loss Clause ..................................................................................392 Unexplained Shortages and/or Losses in Respect of Imports.............................393 Unpaid Vendor Coverage ....................................................................................394 Used Plant and/or Equipment and/or Machinery Clause.....................................395 US Oil Pollution Exclusion Clause .......................................................................396 V 397 Vehicle Accessories Clause.................................................................................398 Vehicle Clause .....................................................................................................398 Vehicles (Commercial) Conditions.......................................................................398 Vehicle Exclusions ...............................................................................................399 Vehicle in Container Clause ................................................................................399 Vehicle in Locked Compound Warranty ..............................................................340 Vehicle in Locked Garage Warranty ....................................................................340 Vehicle Locking Warranty ....................................................................................340 Vehicle Under Own Power Warranty ...................................................................340 Vermin Damage Exclusion ..................................................................................341 Voluntary Storage in Intermediate Warehouse ....................................................402 Voyage Description Clause .................................................................................403 W 405 Waiver and/or Release Clause ............................................................................406 Waiver of Subrogation and/or Recourse Rights Clause ......................................407 War and Civil War Exclusion Clause ...................................................................409 War Clause Paramount .......................................................................................409 War Cover in Case of Delay to Cargo .................................................................409 War Rate Addition in Case of Carriage Beyond Destination ...............................411 War Rate Adjustment Clause ..............................................................................411 War Rate, Transhipments ....................................................................................412 War Risks Cover ..................................................................................................412 Warehousing, Forwarding, etc. Charges .............................................................413 Warranty Clause ..................................................................................................414 Contents xx Marine Cargo Clauses, A Collection of Non-Institute Clauses Washing-Out Clause ...........................................................................................415 Wear and Tear, etc. Exclusion Clause .................................................................416 Wilful Misconduct Clause ....................................................................................417 Worldwide Extension Clause ...............................................................................418 PART 2 NON-MARINE CLAUSES USED IN MARINE CARGO PRACTICE AND MARINE CARGO CLAUSES FOR USE ONLY WITH THE SG POLICY FORM It should be noted that Part Two incorporates a number of marine clauses which have been separated from Part One because they are not suitable for use with the modern MAR Policy Form, or they have been superseded in modern practice by more restrictive conditions in the current ICC, or they were drafted for conditions other than for cargo insurance. Clauses, etc, marked with an asterisk (*) in this index refer to partial headings of other memoranda. A 421 Alarm Warranty ....................................................................................................422 American FPA (1.4.1966) ....................................................................................422 American Shore Clause.......................................................................................423 Apples and Pears Warranty .................................................................................423 Assignment Clause..............................................................................................424 Automobile and Vehicle Clause ...........................................................................425 Average Clause ...................................................................................................426 Average Disbursements Clause ..........................................................................428 C 429 Coal Shipments ...................................................................................................430 Confidentiality Clause ..........................................................................................433 Cotton Contribution Clause .................................................................................434 E 435 Exhibitions – Adjustment Clause .........................................................................436 Exhibition Insurance Exclusion Clause................................................................437 Exhibition Insurance – Temporary Structures and Tents Clause .........................438 F 439 FPA, but Including Theft and Non-Delivery of whole Packages or Shipments ....440 xxi Free of Capture and Seizure Warranty ................................................................440 Fruit Clauses .......................................................................................................442 H 447 Hotel/Motel Clause ..............................................................................................448 I 449 Immobiliser and Alarm Warranty .........................................................................450 Inchmaree Clause ...............................................................................................450 Also known as the Negligence or Additional Perils Clause .................................450 L 453 Liner Negligence Clause .....................................................................................454 M 457 Motel Clause........................................................................................................458 Motor Truck Clause .............................................................................................459 N 461 Non-Contribution Clause .....................................................................................462 O 463 Overnight Definition .............................................................................................464 Overnight Warranty .............................................................................................464 Overnight Warranty (Co-Insurance) ....................................................................464 P 467 Pears Clause .......................................................................................................468 Perils Clause .......................................................................................................469 Personal Conveyance and Hotel/Motel Clause ...................................................470 Property in Vehicles Clause.................................................................................471 Pro-Rata Contribution Clause..............................................................................472 S 473 Seaworthiness Admitted Clause ..........................................................................474 Service of Suit Clause .........................................................................................475 Service of Suit Clause (USA) ..............................................................................476 Contents APPENDIX War Risk Waterborne Agreement ........................................................................480 General Average Clause 159 General Average Clause At times only the second paragraph of this clause is used. This insurance covers General Average and Salvage Charges, adjusted or determined according to the contract of affreightment and/or the governing law and practice (or, if there is no contract of affreightment, according to Foreign Statement or to York-Antwerp Rules) incurred to avoid or in connection with the avoidance of loss from any cause except those specifically excluded herefrom. For the purpose of claims for General Average Contribution and Salvage Charges recoverable hereunder, the Subject-matter insured shall be deemed to be insured for its full contributory value. General Average deposits shall be payable on production of General Average deposit receipts. General Average Guarantee Clause Lloyd’s General Average Guarantee (ordinary or American form) and/or Adjusters to be signed, if required. When General Average Guarantees are required the signature of the Leading Lloyd’s and Company Underwriters to be binding on the whole. General Average in Full Clause General Average and Salvage Charges shall be payable under this insurance in full without reference to insured and contributory values. General Average Deposits shall be payable on production of General Average Deposits Receipts. General Average, Salvage and Special Charges Clause Version 1 General Average, Salvage and Special Charges payable as provided in the Contract of Affreightment and/or in accordance with laws and usages at port of Destination and/or in accordance with foreign statement. In the event of the contributory value exceeding the insured value for the purpose of contribution to General Average or Salvage Charges, it is agreed that any amount due shall be paid in full by Underwriters. Marine Cargo Clauses, A Collection of Non-Institute Clauses 160 General Average Deposits payable on production of General Average Deposits Receipts. Version 2 General Average, Salvage and Special Charges, as per foreign custom, payable according to Foreign Statement, and/or per York-Antwerp Rules and/or in accordance with the contract of affreightment, or, if there be no contract of affreightment, payable in accordance with the Laws and Usages prevailing at the port of destination or at the termination of the voyage or in accordance with the statutes of the Country of domicile of the Insured. For the purpose of claims for General Average contribution and Salvage Charges recoverable hereunder, the subject-matter insured shall be deemed to be insured for its full contributory value.