Marine Insurance Law, The terms of the contract; risks; and causation

Attachment, Duration and Termination of The Insured Risk

April 27, 2022July 25, 2022By Tan Pui Yen
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Attachment, Duration And Termination Of The Insured Risk

1. Policy Period, Time Policy And Voyage Policy

The same considerations within section 25 MIA. These considerations can be found in Parts 7 and 8 of this Mini Series.

2. Cargo Policies And The Institute Clauses

Cargo is invariably insured under voyage policies given that the very nature of cargo is that it is property or goods which are being transported from one place to another.

Cargo is very commonly insured under the Institute Cargo Clauses (1/11/82). A revised version of the Institute Cargo Clauses was introduced in 2009 (1/1/09). There are three versions of the Cargo Clauses – A, B and C. The Institute Cargo Clauses A insure the cargo against ‘all risks’ of loss. The B and C clauses insure the cargo against a more restricted range of perils or risks.

All three sets of the Institute Cargo Clauses contain a number of provisions concerning the attachment (or commencement), duration and termination of the risk:

a) Clause 8 (the Transit Clause): this clause provides for the attachment and termination of the risk; it is often referred to as a ‘warehouse to warehouse’ clause in that it provides cover for the cargo not merely from the time of loading of the cargo or the time of sailing of the ship carrying the cargo to the time of discharge at the destination, but also in respect of the ‘land risks’ from the warehouse at the port of departure until loading and also from the time of discharge until the earliest of: 

(i) delivery of the cargo to the consignee at the warehouse; or (ii) delivery of the cargo at the warehouse for storage other than in the ordinary course of transit or for distribution or allocation; or (iii) the expiry of 60 days after completion of discharge of the cargo from the vessel at the final port of discharge. (As to the meaning of ‘final warehouse’, see Deutsche-Australische Dampfschiffsgesellschaft v Sturge, G H Renton & Co Ltd v Black Sea & Baltic General Insurance Co Ltd and John Martin of London Ltd v Russell). 

Clause 8.3 provides that the insurance shall remain in force during any delay beyond the control of the assured or any deviation and during any variation of the adventure arising from the exercise of a liberty granted to shipowners or charterers under the contract of carriage. 

The Institute Cargo Clauses (1/1/09) provide broader cover by providing that:

“this insurance attaches from the time the subject-matter insured is first moved in the warehouse or at the place of storage…for the purpose of the immediate loading into or onto the carrying vehicle or other conveyance for the commencement of transit…”

b) Clause 9 (Termination of Contract of Carriage Clause): this clause provides that if, beyond the control of the assured, the contract of carriage (e. the contract between the shipowner or charterer of the ship and the cargo-owner) is terminated at a port or place other than the destination in the contract of carriage or the transit is terminated before delivery of the goods in accordance with clause 8, the insurance will terminate. However, there is provision for the cover to be continued if notice is given to the insurer and an additional premium is agreed.

c) Clause 10 (Change of Voyage Clause): this provision allows for the assured to be ‘held covered’ in the event that the destination is changed after the attachment of the insurance, provided that prompt notice is given to the insurer. This clause qualifies section 45, not section 44, MIA, because it is concerned with a change of destination after the attachment of the risk. However, as we have seen, where the insurance incorporates the Transit Clause, the risk may attach before the vessel sails as contemplated by section 44 MIA (Nima SARL v Deves Insurance Public Co Ltd (The Prestrioka)).

d) Clause 18 (Reasonable Despatch Clause): this clause essentially reinforces section 48 MIA by providing that it is a condition of the insurance that the assured shall act with reasonable despatch in all circumstances within their control.

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