What are the important Clauses in Marine Policies?

The British policy of marine insurance in general use, still maintaining its ancient rude form and vague expressions, does, in many par­ticulars, no longer correspond to the altered condi­tions of trade and navigation, so that a great variety of supplementary clauses have been and are still invented and framed by contracting parties to express some special engagements entered into by mutual agreement.

It is, therefore, almost impossible to enumerate and distinguish all such clauses, which may refer either to the subject matter of the insurance or to the circumstances of time and place accompany­ing the adventure, or to the conditions of the risk.

There are some, however, so generally adopted as to be found in most English policies, and therefore worth mentioning. Supplementary clauses usually stamped, written, or in any other way inserted in the margin of the policy, are considered as binding upon the parties, notwithstanding any other contrary condition con­tained in the printed body of the policy.

We quote here some of the most frequently used:

(a) Lost or not lost-

usually inserted in the case of ship or “goods insured while sailing, for which the underwriter accepts the risk, whatever be their lot at the moment when the insurance is effected.

(b) Free from particular average;

also : free from average unless general.

The purport of both these clauses is that the under­writer is not bound to indemnify the insured for damages arising from partial loss or deterioration.

(c) Free from average unless general, or the ship be stranded, sunk or burnt, or in collision.

The words : or the ship be stranded, sunk or burnt, or in collision, form a restriction to the preceding clause, pointing out three special cases when even a partial loss would be covered by the policy.

(c) Free from particular average under………………. percent

When this clause is applied to an insurance on hull it is intended to protect underwriters against claims for such slight damage as any ship will meet with in almost every voyage.

When applied to goods, it limits the underwriter’s responsibility as to certain classes of articles which are apt to deteriorate from the most trifling causes.

Thus the limit may be fixed at a different percentage according to the nature of the goods insured. In both cases it implies that damage arising from par­ticular average will not be recoverable under the policy unless it amounts to the specified percentage on the value of the subject matter of the insurance.

(d) Warranted free from capture, seizure (P.C.S.) and detention, and the consequences of any attempts thereat, and all other consequences of hostilities.

In the old standard form of the English policy, the so-called risks of war are accepted through the follow­ing general clause:

Touching the adventures and perils, which we, the assurers, are contented to bear and to take upon us in this voyage, they are of the sea, men-of-war, fire, enemies, pirates, rovers, thieves, jettisons, letters of marque and counter marqzie, surprisal, taking at sea, arrests, , restraints and detainments of all Kings, Princes and People, of what nation, condition and quality soever. . . .

In modern policies, however, such risks are often excluded by the above exemption stamped in the margin by which the insurer declines liability for any loss or damage depending on hostilities.

(e) With leave to call at any intermediate ports and places to all purposes-when it is intended that the ship is not bound to any fixed route or rotation. The interpretation of the word intermediate having often given rise to much controversy, such a word is now often superseded by the expression: on or out of the way.

(f) No third new for old. The clause is to be found in hull policies, and means that, in case of damage, the cost of repairs is to be paid without the usual deduction of one-third.

It implies, therefore, a waiver on the insurer’s part of the customary allowance of one-third, to be deducted out of the sum due for damage in consideration of the advantage arising to the ship-owner from his getting new gear in the place of the lost or damaged ones already deteriorated by usage.

(g) In and over all, including risk of craft and deck- load. Besides the risk of craft, already explained in this chapter, the clause points out that the goods are covered by insurance while afloat, whether stowed in or out of the vessel’s hold.

No such condition being inserted in the policy, the insurer is not liable for the jettison or damage of deck-load.

(h) General average payable as per foreign statement. It is a matter of course that the underwriter super­sedes the insured in all risks and liabilities attendant on the subject matter of the insurance.

By this clause, therefore, the former binds himself to pay whatever share of contribution to general average be assessed upon the thing insured, through an adjust­ment effected abroad according to the laws and customs of the place.

(k) York-Antwerp rules. It is understood by this clause, or any one more complete to the same effect, that, in case of general average, the adjustment shall proceed according to a system of general average framed by a Congress held for that purpose in 1864 in the City of York, which, having been lately changed by the Association for the Reform and Codification of the Laws of Nations, at their conference at Antwerp in 1877, was adopted as a uniform system of average adjustment, under the name of York-Antwerp rules.

A new conference, in connection with the above Association, was held at Liverpool in 1890, in which the rules were somewhat altered and extended to correspond with current practice. The rules thus re­formed are still quoted under the old name of York- Antwerp rules.