CLAUSES IN A MARINE POLICY (2)
A policy of marine insurance may contain several clauses. Some of the clauses are common to all marine policies while others are included to meet special requirements of the insured. Hull, cargo and freight policies have different standard clauses. There are standard clauses which are invariably used in marine insurance. Firstly, policies are constructed in general, ordinary and popular sense, and, later on, specific clauses are added to them according to terms and conditions of the contract. Some of the important clauses in a marine policy are described below:
1.Valuation Clause
. This clause states the value of the subject matter insured as agreed upon between both the parties.
2. Sue and Labour clause
. This clause authorizes the insured to take all possible steps to avert or minimize the loss or to protect the subject matter insured in case of danger. The insurer is liable to pay the expenses, if any,incurred by the insured for this purpose.
3. Waiver Clause
. This clause is an extension of the above clause. The clause states that any act of the insured or the insurer to protect, recover or preserve the subject matter of insurance shall not be taken to mean that the insured wants to forgo the compensation, nor will it mean that the insurer accepts the act as abandonment of the policy.
4.Touch and Stay Clause
. This clause requires the ship to touch and stay atsuch ports and in such order as specified in the policy. Any departure from theroute mentioned in the policy or the ordinary trade route followed will beconsidered as deviation unless such departure is essential to save the ship or the lives on board in an emergency.
5.Warehouse to warehouse clause
. This clause is inserted to cover the risks to goods from the time they are dispatched from the consignor’s warehouse until their delivery at the consignee’s warehouse at the port of destination.
6.Inchmaree Clause.
This clause covers the loss or damage caused to the ship or machinery by the negligence of the master of the ship as well as by explosives or latent defect in the machinery or the hull.
7. F.P.A. and F.A.A. Clause
. The F.P.A. (Free of Particular Average) clause relieves the insurer from particular average liability. The F.A.A. ( free of all average) clause relieves the insurer from liability arising from both particular average and general average.
8.Lost or Not Lost Clause.
Under this clause, the insurer is liable even if theship insured is found not to be lost prior to the contact of insurance, providedthe insurer had no knowledge of such loss and does not commit any fraud.This clause covers the risks between the issue of the policy and the shipmentof the goods.
9.Running down Clause.
This clause covers the risk arising out of collision between two ships. The insurer is liable to pay compensation to the owner of the damaged ship. This clause is used in hull insurance.
10.Free of Capture and Seizure Clause
. This clause relieves the insurer from the liability of making compensation for the capture and seizure of the vessel by enemy countries. The insured can insure such abnormal risks by taking an extra ‘war risks’ policy.
11.Continuation Clause
. This clause authorizes the vessel to continue and complete her voyage even if the time of the policy has expired. This clause isused in a time policy. The insured has to give prior notice for this and deposit a monthly prorate premium.
12. Barratry Clause
. This clause covers losses sustained by the ship owner or the cargo owner due to willful conduct of the master or crew of the ship.
13.Jettison Clause
. Jettison means throwing overboard a part of the ship’s cargo so as to reduce her weight or to save other goods. This clause covers the loss arising out of such throwing of goods. The owner of jettisoned goods is compensated by all interested parties.
14.At and From Clause
. This clause covers the subject matter while it is lying at the port of departure and until it reaches the port of destination. It is used in voyage policies. If the policy consists of the word ‘from’ only instead of ‘at and from’, the risk is covered only from the time of departure of the ship.
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