New Institute Cargo Clauses (From Technical Point of View)

Transcription

1 New Institute Cargo Clauses (From Technical Point of View) 10th May 2011 Daniel Morrison Underwriting Manager Marine Middle East rechter Rand right margin marge droite margine destra

2 Agenda Background General Changes Principal Changes Other Changes Summary Questions 2

3 Background Old clauses, in use date from , were seen as a step forward Some markets still use earlier versions of Cargo Clauses - Japan uses clauses After 26 years there was a need to review the clauses and bring them up to date in terms of: Terminology Cover Process of Revision of Clauses commenced in February 2006, drafts were sent in 2008 with final version ready for implementation 1 st January

4 General Changes Terminology used in Clauses updated: liftvan no longer used Servants updated to Employees Goods & Cargo replaced by subject matter insured except as provided amended to except as excluded Side headings replaced by sub-headings 4

5 Principal Changes Insufficiency of packing exclusion revised in favour of Assured Insolvency exclusion now the same as in Commodity Trades clauses Unseaworthiness and unfitness exclusion modified in favour of Assured Terrorism excluded under A, B and C clauses but covered under revised Institute Strikes Clauses Duration Clause revised to include loading and unloading Change of voyage clause revised in favour of Assured to avoid the technical term held covered and to provide cover in a phantom ship situation 5

6 Insufficiency of Packing Exclusion Provisions of clauses total exclusion of insufficiency or preparation of subject matter insured packing included stowage in a container when stowage carried out prior to attachment of cover or by Assured or their servants Provisions of clauses exclusion only applies where the Assured or their employees are responsible for the poor packing or preparation at whatever time this is carried out or the packing or preparation is carried out prior to the attachment of the risk Note : employees does not include independent contractors 6

7 Insolvency Exclusion Provisions of clauses total exclusion of loss damage or expense arising from insolvency or financial default of vessel owners managers, charterers or operators Provisions of clauses exclusion now the same as in Institute Commodity Trades Clauses exclusion only applies if the Assured, at the time of loading onto the vessel, are aware or in the ordinary course of business should be aware that insolvency or financial default could prevent the normal prosecution of the voyage 7

8 Unseaworthiness Exclusion Provisions of clauses total exclusion of loss damage or expense arising from unseaworthiness of vessel or craft unfitness of vessel craft conveyance liftvan or container for safe carriage of subject matter insured where the Assured or their servants are privy to such unfitness at time of loading breach of implied warranties of seaworthiness of ship/unfitness of ship waived unless Assured or their servants privy to unseaworthiness/unfitness Provisions of clauses now excludes unseaworthiness/unfitness of vessel or craft for safe carriage of subject matter insured where Assured /employees are privy to this at the time of loading unfitness of container or conveyance for safe carriage of subject matter insured where loading is carried out prior to attachment of this insurance or by the Assured/employees and they are privy to the unfitness at time of loading Exclusion does not apply to assignees who have bought under binding contract any breach of implied warranties of seaworthiness of ship/unfitness of ship waived 8

9 Terrorism Provisions of clauses excludes loss damage or expense caused by any terrorist or any person acting from a political motive Provisions of clauses excludes loss damage or expense caused by any act of terrorism terrorism is defined using UK Terrorism exclusion also excludes loss damage or expense caused by any person acting from a political, ideological or religious motive Note: Cover for these exclusions is provided by the new Institute Strikes Clauses subject to the exclusions in those clauses 9

10 Duration Provisions of clauses cover attaches from the time the goods leave the warehouse or place of storage cover terminates either on delivery to consignees or other final warehouse or place of storage at named destination on delivery to any other warehouse or place of storage which Assured elect to use for storage or allocation or distribution on expiry of 60 days after discharge whichever first occurs Provisions of clauses cover attaches when first moved for the purpose of immediate loading cover terminates on completion of unloading from carrying vehicle/conveyance at named destination on completion of unloading from carrying vehicle/conveyance at any other warehouse or place of storage which Assured elect to use for storage or allocation or distribution when the insured or their employees elect to use the carrying vehicle/conveyance or a container for storage other than in the ordinary course of transit on expiry of 60 days after discharge whichever first occurs 10

11 Change of Voyage Provisions of clauses held covered at premium and on conditions to be arranged and subject to prompt notice being given to underwriters Provisions of clauses must be notified promptly to insurers for rates and terms to be agreed but if loss occurs prior to agreement of terms cover may be provided but only if cover would have been available at a reasonable commercial market rate and on reasonable market terms if subject matter insured commences transit but without knowledge of Assured or their employees the ship sails for another destination, the insurance is deemed to have attached at commencement of such transit 11

12 Other changes Both to Blame Collision clause redrafted to make meaning clear Nuclear Weapons exclusion amended to be more consistent with radioactive contamination exclusions the word proximately has been omitted from the Delay exclusion (Clause 4.5) to reflect the changes in the interpretation of this word in law cases. Benefit of Insurance clause (Clause 15) amended to clarify that it extends to both the Assured and an assignee to omit the antiquated word inure. 12

13 Summary Clauses updated to generally reflect cover already being provided in the market A number of amendments made in favour of Insured Amendments to A Clauses carried through to B, C and War & Strikes Clauses Opportunity to simplify cover by reducing additional clauses in policy Progressive approach 13

14 New Institute Cargo Clauses Thank You