Insuring Cargoes - A practical guide to the law and practice

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Published Date

February 2010

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Insuring Cargoes - A practical guide to the law and practice

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This book is a comprehensive guide to underwriting and claims practices for insurance practitioners. It covers topics such as marine insurance and international trade, the basic principles of marine cargo insurance, cargo loss prevention, policy construction and insurable interest.

This book covers extensive insurance subjects and is supported by case laws from the UK, USA, Canada and Australia. It provides a detailed analysis of the fundamental principles of marine insurance and how modern practices interpret these principles. It also explains ‘duration of cover’ in Institute Cargo Clauses, giving the reader practical solutions. It explores salvage sales using the internet, examining how developed markets address the question of product liability and brand issues. The book is a useful tool for law firms, underwriters, adjusters and surveyors.

1          Marine Insurance And International Trade

            1.1       The Need For Marine Cargo Insurance

            1.2       Cargo Classification

            1.3       The Container Revolution

            1.4       Vessels and Classification

            1.5       Financing of International Trade

2          Basic Principles of Marine Cargo Insurance

            2.1       The Assured

            2.2       Indemnity

            2.3       Agreed Value – A Detailed Discussion

            2.4       Utmost Good Faith and Disclosure

3          Current Trends in Determining Depreciation

            3.1       Increasing Use of Salvage Loss Method Rather than PAM

            3.2       Are Instances of Salvage Sales Decreasing?

            3.3       Other Methods of Determining Depreciation

            3.4       Practice in Other Markets
            3.5       Manuscript Wordings Currently in Vogue and their Impact on Indemnity

            3.6       Other Modification to MIA 1906 Provisions

            3.7       Other Commonly Used Clauses

4          Insurable Interest

            4.1       General Introduction

            4.2       Assignment of Interest and Policy

            4.3       Incoterms (International Commercial Terms)

            4.4       The Risk vs Title Dichotomy

            4.5       Modern Trends in UK and US Markets

            4.6       CIF Term and Nature of the Insurance Policy

            4.7       For Whom it May Concern

            4.8       Banks and Marine Insurance

5          Contingent Insurable Interest

            5.1       The Origin of Seller’s Interest Cover

            5.2       Key Features of Seller’s Interest Covers

            5.3       Summary

            5.4       Buyer’s Interest and Difference in Conditions

            5.5       Specimen Wordings

6          Marine Open Cover

            6.1       Open Cover

            6.2       Limits of Liability

            6.3       Example of Limits per Bottom and Location Operating

            6.4       Certificate System Under an Open Cover

            6.5       Annual Sales Turnover Policies

            6.6       Stock Throughput Policies

7          Insuring Terms 1 – Institute Cargo Clauses (A), 1.1.82 209

            7.1       MAR Policy Form

            7.2       Institute Cargo Clauses (A) 1982

            7.3       Duration of Cover

            7.4       Termination of Transit – Some Further Issues

            7.5       Other Clauses of the ICC (A)

            7.6       Piracy

8          Insuring Terms 2 – The New Institute Cargo Clauses – A, Cl. 382, 1.1.09

            8.1       General Changes

            8.2       Institute Cargo Clauses 2009 – A Detailed Analysis

            8.3       Duration of Cover

            8.4       Other Clauses

9          Insuring Terms 3 – Frozen Food Clauses

            9.1       Temperature Controlled Cargoes

            9.2       Underwriting Considerations

            9.3       Temperature Recording Devices

            9.4       Institute Frozen Food Clauses

            9.5       Frozen Food Clauses, Some Issues

            9.6       Frozen Foods and Perishables Claims

10        Other Institute Clauses and Endorsements

            10.1     Institute Cargo Clauses – (B) and (C)
            10.2     (B) and (C) Causation

            10.3     (B) and (C) Exclusions

            10.4     Comparison of ICC (B) with Extended Transport Accident – B Clauses of                             Norwegian Market

            10.5     Institute Classification Clause

            10.6     Radioactive Contamination Clause

            10.7     Termination of Transit (Terrorism) JC2001/056

            10.8     ISM Endorsements

            10.9     ISPS Endorsements

11        Construction of a Policy and Extraneous Perils

            11.1     Rules for Underwriting

            11.2     Some Manuscript Wordings

            11.3     Rules of Construction

            11.4     Rules of Proximation

            11.5     Burden of Proof

            11.6     Need for Careful Drafting of Policies

            11.7     Extraneous Perils

            11.8     Deductibles

            11.9     Warranties

12        Physical Loss or Damage to Cargo

            12.1     Changing Trends

            12.2     Widening of Cover

            12.3     Manufacturer’s Guarantee or Warranty

            12.4     Guaranteed Outturn Covers

            12.5     Packing

            12.6     Treatment of Delay in Marine Insurance Policies

13        Physical Loss or Damage to Cargo – Other Claims Issues

            13.1     Concealed Damage or Delayed Discovery of Loss

            13.2     Shortage from ‘Seal Intact’ Containers

            13.3     Sweat Damage

            13.4     Odour Claims

            13.5     Vermin Damage

            13.6     Pollution Hazard Clause

            13.7     General Average (GA)

            13.8     Salvage

            13.9     Nature of LOF (and other forms of salvage) – Liability under Clause 2 or 16 of                    ICC?

            13.10   Exchange Rates in Marine Cargo Insurance

14        Cargo Loss Prevention – Including Some Current Trends

            14.1     Loss/Damage from Container Shipments

            14.2     Damage Detection Devices

            14.3     Dry Bulk Cargoes

            14.4     Project Cargo

            14.5     Difficult Destination

Many technical works on marine cargo insurance concentrate on the London market and clauses and court cases relating to risks placed in London. However, KS Vishwanath (Vish) has produced a book that is global in its content, with detailed comment and discussion on clauses not just from London, but also from Norway, France, the USA and other countries.

Whilst the London clauses form the framework for much of this book, refreshingly his international underwriting experience has enabled Vish to produce a reference work that draws upon issues and examples from many insurance regimes.

London has been at the forefront of the development of internationally adopted cargo insurance clauses, from the time of the introduction of the first market cargo clauses in 1912 through to the revised clauses of 2009 and beyond. In recent years, I have been very fortunate to be close to some of the major technical changes in the London market, one of the aims of these changes being to enable the London clauses to be more acceptable to insurers worldwide. However, the clauses and conditions of other markets and legal regimes cannot and should not be ignored.

Vish is not afraid to ask questions nor to put forward questions to which there may be several answers, making this a stimulating way in which to approach a technical subject. There may be some practitioners who will disagree with Vish’s suggestions in some of his more subjective points, but that does not detract from the book’s value.

This book goes well beyond a simple description of the clauses. It contains cases that are relevant to the points being made, with many references to case law, as well as in depth information on particular cargoes and the perils they face. Wordings and coverage outside standard printed clauses, such as the Institute Cargo Clauses, are discussed and the coverage they provide reviewed. This will be of great use to insurance practitioners, wherever they may be located.

With many direct cargo placements being underwritten in markets other than London, the rise of other international markets, such as Singapore, and the generalisation of wordings, opportunities for cargo practitioners to learn from their own experience become fewer. There are other reference works that give more detailed information on specific cargoes; this book also gives guidance on how insurance problems may be resolved.

The practical explanation of cases provides a very useful guide to students of cargo insurance, at whatever stage of their career they may be, as well as thoughtful information on shipping terms, including Incoterms.

In addition to being a valuable source of technical information, this book gives a good insight into the development of coverage and clauses in markets other than London. It is also a useful guide to the differences which have evolved between various clauses in various regimes.

KS Vishwanath

KS Vishwanath MA(Econ) is an underwriter and adjuster of international repute. Starting his career in 1981, he has since held several senior management roles and has spoken on insurance at prestigious forums worldwide. Vish now works as a freelancer, offering consultancy on all classes of insurance business, including risk management.

Title: Insuring Cargoes - A practical guide to the law and practice
Number of Volumes: 1
Edition: First
Number of Pages: 542
Product Code: WS1198K
ISBN: ISBN 13: 978-1-905331-95-6 (9781905331956), ISBN 10: 1-905331-95-9 (1905331959)
Published Date: February 2010
Binding Format: Paperback
Book Height: 244 mm
Book Width: 189 mm
Book Spine: 27 mm
Weight: 1.80 kg
Author: K S Vishwanath

Customer Reviews

Missing puzzle! Review by MA
It's like a missing puzzle for my master of law thesis completion! (Posted on 07/11/2013)
An Appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers Review by Phillip Taylor MBE & Elizabeth Taylor of Richmond Green
If you’re reading or watching this review, you are probably a shipping practitioner faced with complex claims which tend to hinge on detail and minute practicalities. Or perhaps you’re an insurer, owner, or claims adjuster confronted by complicated underwriting issues. If you’re in any way professionally involved in marine cargo insurance, read this book.

You could well find the answer to most -- if not all -- of your enquiries in it. As you’ll discover, it’s thoroughly researched and readable -- and in our view (although we are not experts in this field) it should be required reading, not just for legal practitioners, but also -- as the author points out -- for underwriters, brokers, forwarders, surveyors, P & I Clubs, cargo owners and shippers.

The sub-title, ‘a practical guide to the law and practice’, is certainly apt. As Vishwanath is an underwriter and adjuster himself, the emphasis is placed on what has happened, what can happen, and what actually does happens to marine cargoes -- and the insurance implications and consequences which can result.
To cite only one example; the consequences of an improperly drafted insurance policy on a cargo can be financially disastrous, whether for individuals or companies. This book can certainly alert practitioners and all others concerned to the contingencies and risks that may impact on a particular cargo and on a particular voyage. The specific aim here is obviously to construct insurance cover that is -- no pun intended – watertight!

Unlike most other books of its kind which focus on the London market and on risks placed in that market, Vishwanath’s book is global in its scope and orientation, with detailed comment on and almost innumerable case references to, issues and events drawn not just from London, but from a number of other jurisdictions, including France, Norway and the US.

The book is also an invaluable source of technical information in plain English, much of it illustrated graphically with photos and diagrams. It’s therefore intelligible not just to the techies of this world, but to the general informed reader. For further ease of reference, crucial points are highlighted and footnoted where appropriate.

Of particular note, there’s an exhaustive and highly detailed chapter four on Incoterms and Insurable Interest included in this edition, with a separate chapter on Seller's Contingency Insurance. None of the contemporary books available on the insuring cargoes contain such a detailed commentary on practical issues concerning these topics which will be most useful to some readers.

So, for practitioners and insurance professionals, not to mention students in this field, ‘Insuring Cargoes’ is a welcome contribution to the literature of cargo insurance and the development of coverage and clauses in international markets, describing in a refreshingly topical way the actual practice of the principles involved.
(Posted on 13/06/2011)
profound, unprecedented, original....” Review by Alan Jervis B.A. Hons. F.C.I.I. Chartered Insurer
'You know - compared to other works and publications I have seen, your analysis of these topics is very profound, unprecedented, original....”'
(Posted on 07/01/2011)
It’s the best book on marine insurance Review by Thomas J. Lynch, CPCU, SCLA, AMIM, MLA, Director of Claims and Recoveries, CSL, N.A-New York City Office
"I am reading your book. It’s the best book on marine insurance that I have read to date. I am sure the book will be a success in U.S.A."
(Posted on 07/01/2011)
Your book stands out compared with other books.. Review by Viggo Kristensen The Nordic Association of Marine Insurers
Your book stands out compared with other books on this subject in the sense that the text is straight forward and understandable to people outside the small group of marine lawyers and insurers. The illustrations and your practical approach will undoubtedly make this book essential reading for insurers, lawyers and other involved persons who lack practical experience in handling and shipping cargo. Old stagers will also have something to learn from your book"'
(Posted on 07/01/2011)

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