Marine Cargo & Goods in transit

What is Cargo?
Simply stated, cargo is defined as all goods that are in transit, or in any stage of transportation.

What is Marine Cargo insurance?

Marine Cargo Insurance covers loss or damage to goods and/or merchandise in transit from one place to another by sea, air, rail, road or registered post. The cover provided is in respect of marine perils, war and strike, riot and civil commotion perils.

What is Goods in Transit Insurance?

Goods in Transit Insurance it is an extension of Marine Insurance. This covers goods against loss or damage while in your vehicle or when sent by a third party carrier, such that it covers in land transits. The sum insured may be a limit for each package, each vehicle or any one consignment.

What are the different types of Marine or/Goods in transit Policies offered by Goldstar Insurance Company?

  1. An "Open" policy/ cover or Un Valued policy
    An open cargo policy is a contract prepared in general terms covering specified goods on agreed conditions. Although no sums insured are stated, limits are applied to any one conveyance or location. These policies require fairly prompt notification of each shipment.

Under an Open cargo policy, if documentation is required for a particular shipment, a certificate of insurance is prepared. Otherwise, monthly or periodic declarations are all that is needed for most companies.

  1. Valued Policy: A valued marine insurance policy is the opposite of an open marine insurance policy. In this type of policy, the value of the cargo and consignment is ascertained and is mentioned in the policy document beforehand thus making clear about the value of the reimbursements in case of any loss to the cargo and consignment.
  1. Voyage Policy: A voyage policy is that kind of marine insurance policy which is valid for a particular voyage.
  1. Time Policy: A marine insurance policy which is valid for a specified time period – generally valid for a year – is classified as a time policy.

What does Marine Cargo & Goods in Transit Insurance cover?

The perils covered and excluded depend on which type of coverage you choose. There are three basic forms of coverage known as Institute Clauses A, B and C.

Marine Insurance offered by Goldstar Insurance is issued based on an All Risks basis.

What is an "All Risk" policy?

An All Risk policy offers even broader coverage than a With Average policy. As the name suggests, this policy covers all transportation risks. An All Risk policy will not, however, cover loss of market or loss or damage caused by delay, inherent vice of the goods, war, strikes, riots and civil commotions, unless specifically included. However, these clauses have been replaced by the A Clauses previously mentioned.

Are losses caused by war and strikes covered?

Marine cargo policies always contain a FC&S (Free of Capture & Seizure) clause that excludes war risks and strikes, riots and civil commotions, and similar risks. A specific agreement must be made for an additional premium to be paid if these perils are to be insured. In 1938, marine underwriters agreed that they would not cover war risks on land, except under certain circumstances. There are three Institute War Clauses covering cargo, air cargo and postal shipments:

  • Institute War Clauses - Cargo
    These clauses cover war risks from the time the insured cargo is loaded on board the vessel until the cargo is unloaded at the final port of discharge. The insurance continues for another 15 days while the cargo is at port, but ceases when the cargo is transported over land
  • Institute War Clauses - Air Cargo
    These are very similar to the cargo clauses. Coverage begins when the cargo is loaded on the aircraft and ceases when it is unloaded at its final destination
  • Institute War Clauses - Post
    These cover the goods from the time they leave the sender's premises until they arrive at the addressee's. War risks are not covered while the goods are at the packer's premises

There are also clauses to cover strikes. The Institute Strikes Clauses apply to cargo and air cargo and cover losses caused by strikers, locked-out workers, people taking part in labor disturbances, riots and commotions, as well as acts by terrorists or any person acting for a political motive.

Are duties on lost or damaged goods covered?

As duties are levied at the point of entry, no duty will be payable if goods are lost prior to arrival. However, damaged goods are still subject to duty. These charges can be covered in addition to the value of the merchandise. Because of a reduced hazard to the insurer, a specially worded clause and lower rate are used.

Can "on deck" cargo be insured?

Goods carried on the deck of a vessel are subject to greater hazard than those carried in holds, and it is unusual to cover deck cargo under an All Risk policy. It is usual to cover deck cargo on a Free of Particular Average (FPA) basis with the risks of jettison and washing overboard included. The rates for deck cargo are generally much higher than for cargo in the holds.

Does coverage vary by cargo type?

Some goods are susceptible to particular hazards and require special treatment. For example, cement shipped in paper bags is often subject to a deductible for shortage, while liquids in barrels are insured with a deductible for leakage. Insurance for chocolate and confectionery usually exclude the risks of heating, freezing and sweating while coverage for eggs and other fragile items exclude breakage.

Are goods covered throughout the journey?

Most cargo policies contain Warehouse to Warehouse and Extended Cover Clauses which insure goods from the time they leave the warehouse at the point of shipment, through the ordinary course of transportation by rail, truck, lighters, steamers, aircraft or other conveyance, until they are delivered to the warehouse at the final destination.