Page 169 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes Important Clauses

The following are the usual clauses that may be incorporated in a marine policy:
1. Assignment Clause: This clause makes it clear that the marine policy is assignable unless
it contains terms expressly prohibiting assignment. A marine policy may be assigned
either before or after a 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.

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

2. Lost or Not Lost Clause: Where the subject matter is insured “Lost or not lost” and the loss
has occurred before the contract is concluded, the risk attaches. But if this fact is in the
knowledge of the assured and insurer was not, then the policy will not be valid.
3. At and From Clause: The risk starts as soon as the contract of insurance is concluded
provided the ship is in good safety at that time. If the ship is not in good safety at that time,
the risk will begin on her till arriving in good safety at the port of departure. Where
freight, other than chartered freight is payable without special conditions and is insured
“at and from” a particular place, the risk attaches pro rata as the goods are shipped,
provided that if there be cargo in readiness which belongs to the ship owner or which
some other persons had contracted with him to the ship, the risk attaches as soon as the
ship is ready to receive such cargo.

4. Transit Clause or Warehouse-to-Warehouse Clause: This 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. This clause helps to provide protection for the entire period of transit.

Did u know? The period of cover extends from the time the goods leave the exporter’s
warehouse until they are delivered to the importers 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 the expiry of
60 days after discharge from the overseas vessel at the final port of discharge which ever
first occurs.
5. Change of Voyage Clause (or) Deviation Clause: According to Marine Insurance Act, it
provides that where there is a change of 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.
6. Touch and Stay Clause: In the absence of any further license or usage, 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.
7. Negligence Clause: This is designed to extend the underwriters 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:

Accident in loading or shifting cargo or fuel explosions on shipboard or elsewhere

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