CONDICIONES DE REFERENCIA

The following are the important clauses:

a. Assignment Clause: This clause makes it clear that the marine policy is assignable unless it contains terms expressly prohibiting assignment.

 Marine policy may be assigned either before or after the loss.

 Assignment may be through endorsement or in other customary manner.

 Where the assured has parted with or lost his interest in the subject matter insured, any subsequent assignment is inoperative.

 The assignee who has acquired the beneficial interest in the policy is entitled to see thereon in his own name.

b. Transit Clause or Warehouse to Warehouse Clause :

 Transit clause provides with respect to goods, for the risk to attach 'from the loading thereof aboard the said ship' and for the insurance to continue until the goods are discharged and safely landed at the port of discharge.

 Warehouse to Warehouse clause helps to provide protection for the entire period of transit. The period of cover extends from the time the goods leave the exporter's warehouse until they are delivered to the importer warehouse at the named destination or to any other warehouse whether prior to or at the named destination, which the assured elect to use either for storage or for allocation or distribution or on expiry of 60 days after discharge from the overseas vessel at the final port of discharge whichever occurs first.

c. Change of Voyage Clause (or) Deviation Clause

 According to Marine Insurance Act, where there is a change in voyage, unless the policy otherwise provides, the insurer is discharged from liability as from the time of the change.

 Through this clause, the policy does provide otherwise (that means permits deviation) and the event is held covered.

d. Touch and Stay Clause

 The liberty to 'touch and stay' at any port or place whatsoever does not authorize the ship to depart from the course of her voyage from the port of departure to the port of destination.

e. Inchmaree Clause or Negligence Clause

 This clause extend the underwriter liability to cover risks of a kind, which are not included within the ordinary meaning of maritime perils.

 It provides for the insurance to cover loss or damage to hull or machinery directly caused by:

i. Accident in loading or shifting cargo or fuel explosion on ship board and or elsewhere

ii. Bursting of boilers

iii. Negligence of master, officers

iv. Negligence of repairs provided such repairs are not assured hereunder v. Contact with aircraft

vi. Contact with any land conveyance, dock or harbor equipment’s or installations

vii. Earthquake, volcanic eruption or lightning

f. Running Down Clause :

 This clause provides a supplementary contract whereby the assured is given some protection against third party damages.

 It provides that if the insured vessel collide with another vessel, the underwriter agree to pay three quarters of the amount of damage to which the assured becomes liable.

g. Sue and Labor Clause :

 This clause provides that liability shall not be exceeding the proportion that the amount insured bears to the value of the vessels.

 In absence of this provision, underwriters would be liable for the full amount of sue and labor charges even when there was under insurance.

h. Reinsurance Clause :

 There are various reasons why an underwriter may deem it prudent to reinsure part or all of a risk for which he has accepted liability.

• E.g. He may find that his commitment on any one vessel or in any locality have become too burdensome.

• Declarations under open covers or floating policies and acceptances by his agents in other markets give him an accumulated liability considerably in excess of his usual retention

• He may have accepted a line on 'all-risks’ terms and then desire to reinsure in respect to total loss only.

i. Memorandum Clause :

 This clause is meant to provide a minimum limit to the underwriter's liability regarding claims for particular average by exempting him from such claims.

j. Continuation Clause :

 This clause refers that the vessel shall continue to be covered even after the completion of voyage under the policy at a pro rata premium to her port of destination.

k. Perils of the Sea Clause :

 The term 'perils of the sea' refers to fortuitous accidents and casualties of the sea. It does not include ordinary action of the winds and waves.

L. Warrior Clause :

 This is supplementary to ' Sue and Labor' clause.

 In this clause, either party to the contract may take such steps, or incur such expenses, as are contemplated under the sue and labor clause, to minimize a loss without prejudice in the light of the assured on the one hand and the underwriter on the other

m. All Risk Clause :

 This clause provides that the insurance is against all risks of loss or damage to the subject matter insures and the claims are payable irrespective of percentage of loss.

n. General Average Clause :

 The general average clause refer to the losses that must be partly borne by someone other than the owner of the goods that were damaged or lost.

 General average losses may be total or partial, whereas particular average losses, by definition are always partial.

n. General Average Clause :

Ex: Suppose that a certain cargo of lumber wrapped in a large bundle is stored on deck. To lighten the ship during heavy storm that is threatening the safety of the voyage, the captain orders the limber worth Rs.50000 to be jettisoned. The action of the captain is successful in saving the ship and all other interests. Such a sacrifice is termed as general average, and the interests that were saved would be required to share a pro-

rata part of the loss. Thus is the ship and freight interests were valued at Rs.1000000 and other cargo interests at Rs.950000, the ship owner would pay one half (100/200) of the value of the lumber. The other cargo interests would share 95/200 of the loss and the owner of the lumber would bear 5/200 of the loss

 All marine policies provide coverage for general average claims that may be made against the insured.

o. Foreign General Average Clause :

 This clause means that the arrangement in case of General Average Claim which may arise under the policy, the average settlement made in foreign country will be adopted as the basis for settlement.

p. Free of Capture and Seizure (FCS) :

 This clause is generally inserted in times of war.

 It means that insurer/ underwriter will not be liable for loss or claim arising from seizure of ship as a price of war.

 In times of war, this clause is inserted unless the insured pays the underwriters additional premium for war risks.

 In ocean marine policy, losses from pirates, assailing thieves or overtly dishonest actions by the ship's master or crew (barratry) are considered burglary and robbery protection on land and are not losses from war. Typically pilferage is not covered.

q. Free of Particular Average Clause (FPA) :

 This clause restricts the liability of the insurer/underwriter.  Insurer is liable only for total loss and not for particular average or partial loss

 Particular average means partial loss to an interest that must be borne entirely by that interest.

 The free-of-particular average clause provides that no partial loss will be paid to single cargo interest unless the loss is caused by certain perils such as

stranding, sinking, burning or collision.

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Chapter 7 :-