Cargo
carried on the main deck of the vessel, or other spaces above the main deck;
cargo carried on deck is subject to damage by wind, sea water, and being washed
overboard.
Open
Policy A cargo policy with no expiration date that provides automatic coverage
of cargo shipments to or from an Assured in a specified trade at agreed rates,
terms, and conditions. The marine and war policies are usually two separate
open policies.
Partial
Loss: Any loss to cargo or a vessel that is less than a total loss. If the
partial loss is directly caused by a peril insured against, it is a particular
average loss.
Particular
Average (PA) A partial loss of the property insured (vessel or cargo, including
total loss of part of a cargo shipment) caused by a peril insured against, and
which is not a General Average loss.
Pilferage
The
theft of part or all of the contents from a shipping package where the package
itself is delivered at destination.
Recovery
Amount received from a third party responsible for a loss on which a claim has
been paid.
Risk
A
fortuitous peril or hazard; i.e. something that may happen, not something that
is inevitable.
Sacrifice
The
deliberate destruction or jettisoning of property to prevent greater loss.
Settling
Agent
An
insurance company's representative in a foreign country who is authorized to
settle claims and make payment on behalf of the insurance company.
Special
Drawing Rights (SDR)
An
international monetary unit used to measure and compare the changing market
values of currencies of member countries of the International Monetary Fund. It
is equal to the market value of currencies of the 5 member countries: United
States, France, Germany, Japan and England. SR&CC Warranty (Strikes, Riots
& Civil Commotions)
A clause
in marine insurance policies that excludes liability for losses caused by the
acts of strikers, locked-out workers, or persons taking part in labor
disturbances or riots or civil commotions or for losses which are directly
caused by persons acting maliciously. This coverage may be restored to the
policy by means of the SR&CC Endorsement, for an additional premium. Total
Loss Only (TLO)
An
insurance policy covering ONLY the total loss of an entire vessel, an entire
cargo shipment, or other property from an insured peril. A partial loss, even
from an insured peril, is NOT covered by the Total
Loss
Only policy. Valuation Clause
The
clause in the Marine Policy that contains a consistent basis of valuation
agreed upon by the Assured and the insurance company and which establishes the
insured value of the cargo or vessel when the insurance attaches.
Warehouse
To Warehouse Clause
A clause
in a cargo policy defining when coverage attaches and terminates.
Coverage
attaches when the cargo leaves the warehouse at the place named in the policy,
and
continues
during the ordinary course of transit after discharge at the final port.
Coverage
ends when one of the following first occurs:
When the
cargo is delivered at the final warehouse at the destination named in the
policy , or 15 days after discharge if the final destination is within the
port, or 30 days after discharge if the final destination
is
outside the port.
Warranty
An
undertaking in which the Assured promises to comply with certain conditions.
Non-compliance constitutes a breach of warranty and the insurance company is
discharged from liability from the date of the breach.
Expressed
Warranty - An agreement written in the policy that the Assured must strictly
and literally comply with. A violation thereof voids the insurance; e.g.
trading warranties.
Implied
Warranty - Fundamental conditions implied in a contract of marine insurance:
1.
Seaworthiness of the vessel;
2.
Legality of the adventure.
War
Risks
Those
risks related to two (or more) belligerents engaging in hostilities, whether or
not there has been a formal declaration of war. Such risks are excluded by the
F.C. & S. (Free of Capture and Seizure) Warranty, but may be covered by a
separate War Risk Policy, at an additional premium.
Wear
& Tear
The
ordinary wearing away of the various parts of a vessel, machinery, and
equipment through use.
Such
damage is not accidental in nature, but is inevitable.
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