What Are The Important Clauses In Marine Insurance?
It’s Important To Read The Fine Print
Clauses in marine insurance are the fine print you should not overlook when seeking coverage. These clauses often illustrate what is or isn’t covered in the policy. Clauses protect insurers and clients from misunderstanding and financial obligations covered in the marine insurance policy.
Some of the important clauses in marine insurance are the valuation clause, warehouse to warehouse clause, sue and labour clause, and change of voyage clause. The touch and stay clause, At and From clause, and jettison clause are also important.
This article will look at the various clauses in detail and how they impact your choice of marine insurance.
The valuation clause states the agreed amount, beyond which the insurer will not compensate for the loss or damage of the agreed goods. In some cases, the insurer and policyholder agree to assess the losses at the time of the event. So, this clause remains blank.
Holding off from filling the valuation clause has advantages and disadvantages. The advantage is if you incur massive losses, the insurer will base the claim on the current cost of products. Unfortunately, once the amount is listed, the policy does not cover inflation, and other factors will increase the cost of goods.
The downside is you will be operating blindly. You will not know the compensation due to you should an accident result in the damage or loss of goods.
You also need to be good at record-keeping if you want to be guaranteed fair compensation.
Warehouse To Warehouse Clause
Marine insurance is vast. It can also cover the risks on land, as well as at sea. If your cargo moves from the warehouse to the port, this policy protects you from any damage or loss incurred when moving goods from one warehouse to another.
Sue And Labour Clause
If you, the insured, have to take measures to protect against any imminent losses, the insurer must compensate you. For example, if you are exporting goods to a specific country but discover that a war has broken out, you may decide to send the goods to a nearby country as you assess the situation.
In this case, you spent money to divert the goods, but you also saved your business from incurring losses. You have also saved the insurer from paying for the damages. So, it is only fair that the insurer compensates for quick thinking and action.
Change Of Voyage Clause
When taking marine insurance, the policy will list all the ports you expect your goods to pass. The route the ship takes will also be listed. If the ship deviates from the listed routes, and anything happens to the goods, the insurer is not liable.
Even when the ship made a detour and ended in the original route, this is seen as a breach of the contract. The insurer will not pay for any claims made.
Touch And Stay Clause
This clause is similar to the change of voyage clause, but the touch and stay clause is specific to ports. Your policy only covers stops at specified ports. If the ship decides to dock at an unlisted port, the insurer will not be liable. The only exceptions are if the ship had valid reasons for the detour.
The jettison clause refers to when cargo is deliberately thrown off the ship in emergencies. It could be to save the ship from sinking. This is often covered in the general clause.
At And From Clause
This clause specifies when the policy comes into effect. This policy covers goods when they are loaded onto the ship and from the time the ship departs. So, you need not worry about your cargo staying at the port and the risks.
These are some of the clauses you need to look at when requesting marine hull insurance cover. Policies differ depending on the cover you take. Find out what clauses are covered in the different policies and how these clauses protect your business against losses.