Frequently Asked Questions

Marine Insurance is a complex subject. The following frequently asked questions and answers are designed to help simplify and clarify your insurance issues.

Why do my Clients need to use this insurance?

Accidents happen. Damage can occur to cargo being shipped and that damage, regardless of cause, means the Client will suffer a loss. If the cargo is insured, that loss can be passed on and is not suffered by the Client himself.

What are the benefits to my Clients?

By taking out insurance on their goods they can be safe in the knowledge that, whilst these are being transported with the highest degree of care possible, should something unexpected happen, they will be reimbursed for their losses according to the terms of the policy.

Payments can be arranged quickly and directly to the Client once the Insurers have seen the required information or documentation.

What are the benefits to me?

The benefits are twofold – improved Client servicing and financial.

Insurance is an effective tool in managing and improving client relations, and demonstrates an added value to your service. You can be confident that you are doing a full and thorough job for your Client as the insurance will minimise the disruption suffered by them in the unfortunate event of loss or damage being sustained.

Furthermore, simply offering this insurance may protect you from customers pursuing claims against you. They will know that you fulfilled your duty of care by offering it to them (even if they don’t purchase the cover). This can mean the difference between the retention of a happy Client and the loss of repeat business.

In addition, the purchase of the insurance is a potential source of additional revenue for you, improving the overall profitability of opening a file while involving very little additional work.

What does the insurance cover?

The insurance is structured to provide cover against “All Risks” of loss or damage to the cargo while it is in the ordinary course of transit, but is subject to a number of standard exclusions.

When does cover start?

Cover starts from the time the goods leave the warehouse or place of storage, including whilst being loaded, whether the carriage is by sea or air.

In cases where specific Institute Cargo and Commodity Clauses apply (for example, Frozen Food Clauses and Meat Clauses), attachment and expiry dates may differ. It is important that the relevant Institute and Commodity Clause is consulted to determine the definition in respect of the commodity you are shipping.

When does cover end?

The cover ends when the cargo is delivered to the Consignees’ or other final warehouse or place of storage at the destination named in the Certificate OR on the expiry of 60 days after completion of discharge overside of the goods from the ocean vessel.

If the cargo is being shipped by air, cover ceases on the expiry of 30 days after discharge from the aircraft at the final place of discharge.

Where specific Institute Cargo and Commodity Clauses apply (for example, Frozen Food Clauses and Meat Clauses), attachment and expiry dates may differ. It is important that the relevant Institute and Commodity Clause is consulted to determine the definition in respect of the commodity you are shipping.

Is cover provided globally?

Yes. It does not matter where the cargo shipment starts and ends, cover will be available for the entire carriage as long as it is correctly declared and premium has been paid thereon.

However, in certain jurisdictions where UN sanctions apply there may be restrictions. These will be referred to FP Marine by the online quotation system so that the most suitable cover can be arranged.

What types of cargo can be covered?

All types of cargo can be covered. However, where internationally accepted restrictions apply for special, sensitive or restricted commodities, your request will be referred to FP Marine by the online quotation system so that the most suitable cover can be arranged.

What types of cargo cannot be covered under the policy?

In theory, all cargo can be covered. However, where internationally accepted restrictions apply for special, sensitive or restricted commodities, your request will be referred to FP Marine by the online quotation system so that the most suitable cover can be arranged.

What types of transit can be covered?

The cargo can be insured whilst it is being shipped on any type of conveyance including ships, aircraft, barges and inland transportation methods such as trucks and trains.

What is the maximum value of insurance per package?

This will depend on the type of cargo being carried. Should the amount of cover you request be outside the limit, your request will be referred to FP Marine by the online quotation system so that the most suitable cover can be arranged.

What is the Sum Insured?

The Sum Insured is the maximum liability that the Insurer will accept under the insurance policy. It should be declared as the total value of:

i. the actual value of the item(s) being shipped;
ii. the shipping cost of the item(s); and
iii. the cost of the Insurance.

This total value is usually then increased by 10% to include the Insured’s hidden costs and a proportion of their profit. The Sum Insured is usually expressed as CIF +10% (Cost, Insurance and Freight).

If the property insured is declared for less than the total value of all of the above, then it will be deemed to be “under-insured”. In the event of a loss, the amount that can be recovered under the policy may be reduced by the same proportion that the under-insurance bears to the correct insured value.

It is important to declare the correct Sum Insured to avoid under-insurance.

What is a deductible and when will it apply?

A deductible is the amount that must be paid by the Assured on each claim made. Only claims of amounts in excess of the deductible will be paid and will be reduced by the amount of the deductible.

What shipping damage or loss is not covered?

You should check your policy carefully to review all exclusions. Generally we will not pay for any loss or damage caused by delay, loss of use, loss of market, or insufficient or defective packaging, but there may be specific exclusions that apply to either the commodity you are shipping or the region in which you are shipping it.

What should be disclosed at the time the cover is purchased?

The Insured needs to disclose everything that may adversely affect the risk. This includes, but is not limited to:

i. the voyage;
ii. the type of cargo;
iii. whether that cargo is dangerous in any way;
iv. how it is packed;
v. whether there is any pre-existing damage to the cargo.

If you are in doubt about whether the information you have is important or not, then you should include it.

When does the premium have to be paid?

Each time you confirm your wish to take the insurance cover you have been quoted for, you can produce a Certificate of Insurance – this is a declaration. The premium for each declaration you make within a calendar month will be collated. At the end of each month the online system will produce a statement of the declarations calculating the total amount due. You are required to make a payment for this amount within 30 days.

What is a Certificate?

A Certificate will be issued to evidence the purchase of the insurance cover and the terms thereof. The Certificate issued is subject to all of the clauses, conditions and warranties of the main policy.

Important Marine Cargo Open Policy Terms

Classification clause

The type or age of a ship is important when fixing the rate of premium. However, the names of ships carrying goods are not usually known when fixing premium rates for a marine cargo open policy.

This clause provides that the pre-agreed premium rate for the marine open policy refers to goods in transit in ships under a certain age and up to a certain Standard/Class. An additional premium may be payable for transits on other ships.

What is an Assured?

This is the person who owns the insurance.

What is an Insurable Interest?

For a person to have an Insurable Interest in the cargo or subject matter that has been insured, he or she must stand to lose something if the property at risk is lost, damaged or detained.

The Assured must have an Insurable Interest in the property insured at the time of the loss, even though he may not have an Insurable Interest at the time of effecting the insurance.

What if the Assured wants to assign the insurance to a third party?

This can be done as long as the third party has an Insurable Interest in the property insured at the time of the loss. The insurance cover is related to the property named in the Certificate, not the name of the assured.

As long as the third party has an Insurable Interest in the property insured at the time of the loss, the insurance will respond in the usual manner to loss or damage (where covered) of the property detailed on the Certificate.

What about War and Strikes Risks?

These are covered as part of the general terms and conditions of the insurance for all shipments.

What is it?

Freight Services Liability (FSL) is an insurance that protects you, the freight forwarder, against claims made upon you by your customers and/or your customer’s cargo insurers and/or other third parties for loss or damage to property/goods shipped by you or in your care, custody and control as the Freight Forwarder. Claims made upon you may be either under the limited liability terms of the contract you have with your customer even though the actual fault may not lay with you or in the event of Errors & Omissions (E&O) the full value of the property/goods. It also protects you against the cost of defending claims made upon you by your customers and/or your customer’s cargo insurers and/or other third parties.

What does it cover?

Freight Services Liability (FSL) covers you, the Freight Forwarder, against claims made upon you by your customers and/or your customer’s cargo insurers and/or other third parties for loss or damage to property/goods shipped by you or in your custody and control as the Freight Forwarder. Claims made upon you may be either under the limited liability terms of the contract you have with your customer even though the actual fault may not lay with you or in the event of Errors & Omissions (E&O) the full value of the property/goods.

Also included is the cost of defending claims made upon you by your customers and/or your customer’s cargo insurers and/or other third parties.
The coverage also protects you for loss or damage for cargo for which you are not responsible but just happens to be on the same voyage. If a shipowner or operator declares “general average” resulting from a peril of the sea, as a NVOC operator you will be liable to contribute for the additional costs of saving the vessel or its cargo. In turn you will claim from the shipper or cargo interests with whom you contracted but what happens if they are no longer in business, the liability remains with you.
You have a choice of limit and deductible to apply for both Legal liability and Errors & Omissions to suit the nature of your operation.

Please refer to the WCAF Schedule 1060511 for a full wording detailing extent of cover provided and applicable exclusions

WCAF Schedule 1060511  

Why do I need it?

Any number of parties can make a claim or bring legal proceedings against you

  1. The owners or operators of the vessel or aircraft
  2. The sub-contractors
  3. Your customer
  4. Other third parties

Claims are made under a contract containing standard terms of trade, ocean bill of lading or airway bill. In addition, third party claims where there is no contract, bailment (when a person gives property to someone else for safekeeping) and statutory liability.
Freight Forwarders face a complex range of liability exposures. Liability for loss or damage to the cargo will affect the majority of those operating within the transport sector. Depending on how you have contracted you can be held liable for losses as a result of cargo entrusted to your professional care by your customer, authorities and third parties.
Many Freight Forwarders will have a professional negligence exposure. In most countries the law requires any professional to possess the usual knowledge and skill of that profession, and furthermore, to use that standard of knowledge and skill to benefit their customer.

If as a professional you fail to deliver your service with the required degree of knowledge, or if you fail to perform with that degree of skill, the law may determine that you have “failed to meet the standard of care”. As a result it is likely that you will be liable for the losses of your client, and perhaps those of a third party who you could reasonably have know to be relying on your expertise.  The insurance for this risk is needed to protect against liabilities arising from errors and omissions.

What are the advantages to me?

This insurance will protect your balance sheet against inward claims being made by your customers and/or your customers’ cargo insurers and/or other third parties for loss or damage to property/goods shipped by you or in your custody and control as the Freight Forwarder. The value of cargo or property shipped can often be significant Claims made upon you may be either under the limited liability terms of the contract you have with your customer even though the actual fault may not lie with you or in the event of Errors & Omissions (E&O) the full value of the property/goods. Also included is the cost of defending claims made upon you by your customers and/or your customer’s cargo insurers and/or other third parties. Often the cost of defending a claim or claims may be a significant cost to you which can seriously affect your profit margin and take up a considerable amount of valuable time and energy.

Why is it different from the Cargo Property Program?

Cargo Property Insurance pays for the loss or damage to the cargo regardless of the fault of the Freight Forwarder or carrier. The Freight Forwarders FSL insurance cover responds when the Freight Forwarder has a legal liability for the loss or damage arising under the contract with the customer or is held liable for the full value of the loss as an Errors & Omissions. Your FSL insurance cover will respond by defending the claim made against you and provide cover in the event you are found liable for such loss or damage.

What happens if the customer purchases Cargo Property Insurance?

If the customer purchases Cargo Property Insurance through the WCAworld Risk Management program, then they should receive the value of their loss quickly and regardless of who was actually liable for the loss. The Cargo Insurer will not pursue the Freight Forwarder for the loss.

If the customer purchases separate Cargo Property Cover, not thru the WCAworld Risk Management program, then they will receive the value of their loss from their own Cargo Insurer. However, their Cargo Insurer may then make a claim against you for your liability under the contract with the customer. This claim will be covered by the WCAworld FSL program.

If you are a regular user of the WCAworld Risk Management Cargo Program you can obtain a discount on your first FSL renewal premium -
contact WCAworld Risk Management for details.


Glossary of Terms


Act of God
An inevitable event occurring without the intervention of man - such as flood, tempest, or death - operating in case of certain contracts, such as those of insurers and carriers.

Actual Total Loss
The insured property is completely destroyed; or The insured is irretrievably deprived of the insured property; or Cargo changes in character so that it is no longer the thing that was insured (e.g., cement becomes concrete); or A ship is posted missing at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.

Ad Valorem Bill
An expression used to state that the value of the goods or interest is to be taken into account.

The exposure of property to risk at sea.

A contract to carry goods by ship. Charter-parties and bills of lading are contracts of affreightment.

A person authorized to transact business for and in the name of another.

All risks
An insurance term used in cargo insurance which means that the policy covers the insured property for loss caused by any fortuity. However, the policy does not cover losses that are inevitable and thus not a fortuity, such as inherent vice or insufficient packing. In practice, such a policy always specifies certain risks that are excluded from cover. The term should not be confused to mean that all losses are covered ĘC there are exclusions contained within the policy.

The detention of a vessel and/or other property until the purpose of the arrest has been fulfilled.

Arrival Notice
A notice, furnished to consignee, of the arrival of freight

Arrival Notification Form
A document which advises a consignee or a container operator that goods or containers have arrived at the port of discharge.

One who receives rights from an assignor.

The passing of beneficial rights from one party to another. A policy or certificate of insurance cannot be assigned after interest has passed, unless an agreement to assign was made, or implied, prior to the passing of interest. An assignee acquires no greater rights than were held by the assignor, and a breach of good faith by the assignor is deemed to be a breach on the part of the assignee.

One who assigns his rights to another.

Astray Freight
Freight bearing marks indicating owner and destination, but separated from the waybill.

A partial loss.

Average (General)
Partial loss of the whole adventure deliberately made to prevent loss of the adventure. It may be sacrifice of property or expenditure incurred to save the adventure. Parties who benefit from a general average loss are required to make good that loss by contributing in the proportion that the saved value of the party's property bears to the saved value of all interests involved in the adventure. General average is a rule of the sea and is implied in all contracts of carriage by sea. Parties to the contract are liable to contribute in GA whether or not their property is insured.

Average (particular)
A fortuitous partial loss of insured property proximately caused by an insured peril, but which is not a general average loss.

Average Adjuster
A person appointed by a shipowner to collect data, guarantees, etc..., in relation to general average, and to calculate contributions due from the parties concerned to make good general average losses. The adjuster may also adjust claims on hull insurance policies for submission to underwriters.

Average Bond
An agreement signed by all interested parties acknowledging their liabilities to pay a share of the loss under general average. A "general average guarantee" is sometimes referred to (particularly in the USA ) as an "average bond"

Average Disbursements
Expenditure incurred by the shipowner in connection with a general average act or an act of salvage. Such expenditure, when properly incurred, is recoverable from the GA or salvage fund created by the adjuster. Hull underwriters are not liable directly for GA expenditure. The assured must recover his expenditure from the GA fund. Underwriters' liability for the GA contribution, if any, will incorporate their proportion of the GA expenditure that is included in the contribution paid by the insured.

The right of an underwriter to avoid a contract of marine insurance from inception. This can occur in the event of a breach of good faith by the assured or by his broker or, in the case of a voyage policy, where the voyage does not commence within a reasonable time after acceptance of the risk by the underwriter.


Back Freight
Payment due to the shipowner for the carriage of goods beyond the contract port owing to circumstances beyond the control of the shipowner.

Bare Boat Charter
Charterer hires a vessel for a long period, appoints the master and crew, and pays all running expenses.

Any wrongful act, wilfully, committed, by the master, officers or crew to the detriment of the shipowner or charterer. The Institute hull clauses cover loss of or damage to the ship when it is proximately caused by barratry; except when it is excluded by the paramount exclusions in the clauses. For example, the latter would exclude barratry involving the use of an explosive or weapon of war; also barratry carried out by a seaman on strike.

Bill of Exchange
An order in writing from one person or firm to another requiring them to pay a certain sum to a person named therein.

Bill of Lading
A negotiable document by which a transportation line acknowledges receipt of freight and contracts for its movement. The surrender of the original Straight of Lading is not required by transportation lines upon delivery of the freight, exept when necessary for the purpose of identifying the consignee.

Bill of Lading - General
A document issued by an overseas carrier which is a receipt for cargo received on board and is evidence of the contract between shipper and shipowner. It is also evidence of title to the holder of the bill to the goods described on it.

Bill of Lading - O rder Bill of Lading
A negotiable document by which a transportation line acknowledges receipt of freight and contracts for its movement. The surrender of the original O rder Bill of Lading, properly endorsed, is required by transportation lines upon delivery of the freight, in accordance with the terms of the Bill of Lading.

Bill of Lading - Straight Bill of Lading
A negotiable document by which a transportation line acknowledges receipt of freight and contracts for its movement. The surrender of the original Straight Bill of Lading is not required by transportation lines upon delivery of the freight, except when necessary for the purpose of identifying the consignee.

Billed Weight
The weight shown in a waybill and freight bill.

Bonded Goods
Imported goods deposited in a Government warehouse until duty is paid.

Bonded Warehouse
A warehouse owned by persons approved by the Treasury Department, and under bond or guarantee for the strict observance of the revenue laws; utilized for storing goods until duties are paid or goods are otherwise properly released.

Bonding Company
An organization that is prepared to undertake an agreement to make good a financial guarantee on behalf of another responsible for such guarantee. O wners of "arrested" vessels may obtain such a bond to satisfy a court and to obtain release of the vessel.

The act of recording arrangements for the movement of goods by vessels.

Booking Cargo
Reserving space on a vessel.

Breach of Warranty
The Marine Insurance Act (1906) demands that the assured comply literally with any warranty in the policy, whether it be a express warranty or a implied warranty. Non compliance where not excused, is term "Breach of Warranty", and discharges the underwriter from all liability under the policy, whether or not it relates to the breach, as from the date of the breach; but without prejudice to any valid claims arising from accidents occurring prior to the date of the breach. Breach of warranty is excused where circumstances have changed so that the warranty has become unnecessary; or where it would be illegal to comply with the warranty; or where the policy conditions waive breach of warranty.

Break Bulk
Applies to goods that have been stripped from container (or other form of bulk carriage) for forwarding to final destination.

Breaking Bulk
The initial opening of hatches on entering port and the commencement of discharge of cargo.

An agent representing a principal to buy or sell goods, me rchan dise or marketable securities, or to negotiate insurance, freight rates or others matters, for a principal; the sales or transactions being negotiated not in his own name but in that of the principal.


Container Freight Station.

Container Load.

C. O .F.C.
Container on Flat Car (No Chassis)

Container Yard.

Cam - Door Lock
Locking bar which secures container doors when closed.

Cargo Shift
A term used to describe the shifting or moving of freight within a container and/or highway trailer.

Cargo Tonnage
(Weight or Measurement). The weight ton in the United States is 2,000 pounds. A short ton or 2,240 pounds. A long ton and in British countries it is the English long or gross ton of 2,240 pounds. In France and other countries having the metric system, the weight ton is 2,204.64 pounds. The measurement ton is usually cubic feet, but in some instances a larger number of cubic feet is taken as weight ton.

Carrier's Lien
The right to retain possession of goods pending payment of overdue freight charges. The term may refer, also, to the right of a carrier to retain cargo pending payment for a GA contribution; but may be discharged in such cases by the payment of a GA deposit or provision of an acceptable GA guarantee.

Causa Proxima
Proximate cause.

Cell guide
A structure which guides the container into the cell of a vessel hatch. A hatch can consists of ten cells, each containing ten containers.

Cellular Vessel
A ship designed and constructed for the stowage of containers in vertical stacks i.e. cells (containership).

Certificate of Origin
A certified document as to the origin of the goods.

Certificate of Registry
A document giving all particulars of the vessel, including the names of the owner and the master

Certificate of weight
An authoritative statement of the weight of a shipment.

Chain locking device used to secure cargo to a flat bed container.

An agreement whereby the shipowner hires his vessel to the charterer subject to certain conditions.

Chartered Ship
A ship leased by its owner or agent for a stated time, voyage or voyages.

Clean Bill of Lading
O ne in which there is nothing to qualify the admission that the goods are shipped in good order and condition.

Clearance Label
Denotes that a vessel has complied with all the regulations for clearance outward. It is attached to the Victualling Bill by the Customs officer who clears the vessel, and is then known as the O utward Clearance.

Where two or more parties share the same insured risk. A reinsurer is not a co-insurer with the original insurer.

Combi Ship
A ship designed to carry both conventional and containerized cargo.

A mixture of two or more cargoes which cannot be separated into the relevant consignments.

Any article of commerce. Goods shipped.

Commodity Rate
A rate applicable on a specific commodity between certain specified points.

Common Carrier
A carrier who offer their ships as general ships for the transit of goods of any shipper.

Concealed Damage
Damage to the contents of a package bearing no indication of having been opened.

Concealed Loss
A loss from a package bearing no indication of having been opened

Association of ship owners operating in specific areas and routes, who agree to operate under collective conditions of carriage and rates whereby a tariff is published governing same.

Conference Ship
A ship operated by a signatory to a shipping conference.

Consequential Loss
A market loss to goods brought about by fear that goods may have suffered from a known casualty whereas no such loss exists in fact ĘC this type of loss is not covered under cargo policies.

Designated person to receive the cargo from the carrier according to the Bill of Lading contract.

Consignee Marks
A symbol placed on packages for export generally consisting of a square, triangle, diamond, circle, cross, etc. with designated letters and/or numbers for the purpose of identification.

Constructive Total Loss
A right of marine assured to claim a total loss on the policy because (1) the property has been lost and recovery is unlikely; or (2) an actual loss appears to be unavoidable; or (3) to prevent an actual loss it would be necessary to incur an expenditure which would exceed the saved value of the property.

O cean going container in which articles are packed.

Container Cell
A unit of a vessel hatch cell in which the container is loaded.

Container Manifest
A listing of containers with relevant information concerning the movement of those containers.

Contributory Value
The value of property saved by a general average or salvage act , on which the contribution by each interest to the loss is calculated.

Convertible Currency
A London market term for any currency other than sterling, US dollars or Canadian dollars.

Counter Guarantee
An undertaking given by a cargo assured to an underwriter agreeing to reimburse the underwriter in the event that the issue of the underwriter's guarantee to pay a general average contribution results in payment in excess of the amount properly due under the policy.

The regulatory body of most governments which inspects and certifies that the cargo is described. Administrates governmental regulations pertaining to foreign commerce.

Customs Seal
A seal applied by a Customs Agent which places the cargo in bond and cannot be opened without Customs Authority


Dead Freight
Freight rate which is paid on empty space in a vessel when the charterer is responsible for the freight rate of a full cargo. It should be paid before sailing.

Deadweight Tonnage
Technically, the term refers to the actual weight of cargo, fuel and stores required to bring the ship down to her loadline marks. In marine insurance practice the term refers to the dimension of a ship used for the purpose of calculating the premium for a hull & machinery policy on full conditions.

Deck Log
Ship's log recording general details concerning the running of the ship, including accidents concerned with ship or cargo.

An amount or percentage, expressed in a policy that is deducted from claims for loss or damage to the insured property.

Defeasible Interest
A cargo insurable interest that ceases during the transit of goods.

The act of transferring possession, as the transfert of property from consignor to carrier, one carrier to another, or carrier to consignee.

Demise Charterparty
An agreement whereby the charterer takes over control costs and responsibilities of the vessel for an agreed period.

The sum agreed by charter to be paid as damages for delay beyond the stipulated time for loading or discharging. It should be collected daily by the master or agent. The term is sometimes used in hull insurance practice to refer to loss of hire money.

Deposit Receipt
A receipt given in respect of a general average deposit payment.

Compensation payable to the ocean carrier/container owner for the detention of his equipment beyond the allowable free time.

A deviation occurs when a ship is on a voyage and departs from the customary or designated route with the intention of returning to that route to complete the voyage. A cargo policy that is subject to the Institute Cargo Clauses is not affected by a deviation

Direct Loading
Loading of freight in a container directly at a shipper's rate.

Expenses incurred by the shipowner in connection with running a ship.

Dispatch Money
When so agreed in the charter-party, this is paid by the shipowner to the charterer as a result of the vessel completing loading or discharging before the stipulated time.

Displacement Tonnage
This term is chiefly used when referring to warships and other non-cargo carrying vessels. It is the actual weight of water displaced by the vessel when floating at her loaded draught.

Disposition log of all containers on any particular ship. Used in booking to match off with final booking printout to verify destination ports.

A change in the billing after the shipment has been received by the carrier at the point of origin and prior to delivery at destination.

Dock Receipt
A receipt given for a shipment received or delivered at a pier to dock. When delivery of a foreign shipment is completed, the dock receipt is surrendered to the transportation line and a bill of lading is issued.

Documents of Title
Documents produced by a consignee as evidence of right to take delivery of goods (eg Bill of Lading).

Door to Door
Through transport of container and its lading from shipper to consignee.

Double Deck Load
A second tier of cargo on top of the first one.

A repayment of duty on the exportation of goods previously imported.

The movement of trailers or containers in or out of a marshalling yard, to or from a local shipper, consignee or another carrier.

The charge made for hauling freight, carts, drays, or trucks

A container totally enclosed for the handling of general cargo.

Dumb Barge
A barge that has no means of propulsion.

 The material used to protect or support freight in or on cars and vessels (bracings, false floors, meat racks, sawdust, etc.)

Dunnage Bag (inflatable)
Flexible air bags constructed of various plies of kraft paper in various sizes. Also made of rubber of various sizes used for in-house movements. Inflated so that movement of cargo is restricted.

Duty of Assured Clause (Cargo)
This appears in the Institute cargo clauses published for use with the MAR form of policy. It directs the attention of the assured, his agents, etc. to the duty (as required by the MIA, 1906) to take reasonable measures to avert or minimise any loss which is recoverable under the policy; also to ensure that all rights against carriers and others are properly preserved and exercised. Underwriters agree to reimburse the assured for any reasonable expenditure incurred by his compliance with the clause; in practice, these expenses are termed 'sue & labour' charges (which see)


An order prohibiting the acceptance and/or handling of freight at certain points or via certain routes due to emergencies, congestion, strikes, acts of God, etc.

English Jurisdiction Clause
This clause appears in the London market MAR policy form, and applies to all claims except where a foreign jurisdiction clause is attached, by agreement with the underwriters, to the policy. The clause provides that claims under the policy are subject to English jurisdiction in the event that action is taken in a court of law against the underwriters.

English Law and Practice Clause
This clause appears in all Institute clauses published for attachment to the MAR form of policy. It provides that when one applies law and practice to the interpretation of the policy conditions decisions must be based on English law and practice, and applies irrespective of the country of jurisdiction.

Entering Inwards
The reporting of the vessel's arrival in port by the master at the Custom House. Permission to commence discharging is obtained.

A place of transshipment.

Entry (Customs)
A statement of kinds, quantities and values of goods imported together with duties due, if any, and declared before a Customs O fficer or other designated officer.

Entry Outwards
The reporting of the intention to commence a new voyage by the master at the
Custom House. Permission to commence loading is obtained.

Export declaration.

The term 'excess' was used for many years in the marine market to denote an amount that had to be exceeded before a partial loss claim attached to the policy. O nce the excess was passed the amount of the claim above the amount of the excess was paid. The term has gradually disappeared in the marine market, to be replaced by the term 'deductible', which has the same effect on partial loss claims.

Export License
A certificate granting permission to export goods.

Express Warranty
A warranty that is specified in the policy document, or is attached thereto. A warranty that applies to the policy, but is not expressed therein (eg. warranty of legality), is termed an 'implied warranty'


Freight All Kinds.

False Billing
Describing freight or shipping documents so as to mis-represent the actual contents or weight of shipment.

Feeder Vessel
Generally a smaller vessel which is used to relay cargo in containers from/to a line vessel from/to a beyond/advanced port of call which is not served by the line vessel directly.

Flat Rack
 A 20, 35 or 40 foot container with no sides or frames at the front and rear of container used for loading machinery and heavy equipment by side loading.

Floor Load
Full floor load of cargo.

Cargo cast or lost overboard and recoverable by reason of its remaining afloat.

Force Majeure
An occurrence outside human control (eg earthquake).

Used primarily for lifting, stacking, and moving heavy objects; it consists typically of projecting blades that can be slid under the load and then raised or lowered.

Foul Bill
A bill of lading that has been claused to show that the goods were not received in a sound condition.

Free Astray
See Astray Freight.

Free Port
Area considered apart from the rest of the country for Customs purposes. Goods for local use or re-export can enter free ports duty free.

Free Time - Cargo
The amount of time provided by tariff for the consignee/agent to accept delivery of cargo at the expiration of which demurrage charges accrue.

Free Time - Equipment
 The amount of time provided by T.I.R. contract to carriers for the loading or unloading of container at the expiration of which detention charges will accrue.

Free in and out
Cargo to be loaded and discharged free to the vessel.

Free on board
Goods delivered on board the vessel free of extra charge to the purchaser. The goods become the responsibility of the buyer once they are on board the ship.

For insurance purposes, the term 'freight' relates to the remuneration received or receivable by a carrier for the carriage of goods, and can include the profit he derives from the carriage of his own goods. Where freight is paid in advance by the shipper, on a non returnable basis, the insurable interest is vested in the shipper and is normally embraced within the insured value of the goods. Where freight is paid on 'outturn' of the goods at the destination port, the insurable interest is vested in the carrier (shipowner or charterer). In shipping practice, the term freight may be used to define the goods carried in transit. Thus, personnel involved in arrangements for such transit may be termed 'freight forwarders'. It is commonplace to hear goods referred to as 'freight' in regard to rail carriage, air carriage, etc.

Freight Bill
a) Destination Freight Bill: A bill rendered by a transportation line to consignee, giving a description of the amount of charges (if not pre-paid)

b) Pre-paid Freight Bill: A bill rendered by a transportation line to shipper, giving a description of the freight, the names of consignee and destination, weight and amount of charges.

Freight Charges
The charges assessed for transporting freight.

Freight Contingency
The insurable interest of a consignee who has paid freight on goods when delivered over the ship's side, but where the goods are still subject to peril until they arrive at the final destination.

Freight Rate
The charge for transporting goods by water.

Frustration of Adventure
A circumstance whereby a ship or goods cannot reach the contemplated destination but remain undamaged and are not lost to the owner. Claims based on frustration of the voyage or adventure are normally excluded from policies covering war risks and strike risks


General Average
An internationally accepted rule of the sea. When a ship is in danger at sea, whereby the maritime adventure is likely to become a total loss, the master is at liberty to sacrifice property in the adventure or to incur reasonable expenditure to save the adventure. Measures taken for the sole benefit of any particular interest are not general average. O n successful completion of the adventure. or if it is abandoned in a place of safety, on successful attainment of such place the ship is declared as entering .under average". Security in the shape of deposits or guarantees is taken from each cargo interests and an average adjuster is appointed. The adjuster calculates the value of the saved interests and each interest is required to contribute a rateable proportion to make good the general average loss. The MIA, 1906, provides that underwriters are liable for general average contribution only where the circumstances causing the GA act constitute the operation of an insured peril but it is customary for cargo insurers to qualify this by applying the exception only to exclusions expressed in the cargo clauses. Marine policies on standard conditions, comply with the MIA provision that underwriters' liability is reduced by any underinsurance indicated by a comparison between the insured value, less any PA claim and the contributory value in the GA adjustment.

General Average Bond
An agreement signed by all parties involved in a general average act.

General Average Contribution
The proportion payable by one of the parties involved in a general average act to make good the loss suffered in that act.

General Average Deposit
A deposit paid by a consignee in return for delivery of the goods where such goods are subject to general average contribution.

General Average Disbursements
Expenses paid by the shipowner as part of a general average act. Such expenses are recovered by the shipowner from the general average fund. Unlike GA sacrifice, there is no direct liability on hull underwriters to reimburse the assured for GA disbursements. The disbursements will be included in the final GA adjustment and incorporated in the GA contribution, underwriters paying this insofar as it is recoverable under the policy.

General Average Fund
The total arrived at by adding together general average expenditure and the value of property sacrificed in a general act, plus costs of its adjustment.

General Average Guarantee
An undertaking by a financial house or an underwriter to pay the contribution due towards a general average fund.

General Exclusions Clause
A clause in the Institute Cargo Clauses 1982, which specifies risks that are excluded, irrespective of the risks covered elsewhere in the wording.

General Order Warehouse (G.O.)
Warehouse for the storage of freight which has not cleared Customs. All must be entered within a period of 14 days from date of vessel sailing or must be taken from dock and put into this warehouse. The Customs depart may pickup from the carrier who has a lien on cargo in order to be paid ocean charges before entry can be made from the warehouse.

Good Faith
See " Utmost Good Faith " .

Gross Tonnage
This is the volume of the interior of the vessel including all spaces which are permanently closed in (but excluding the double bottom). This is calculated not by weight but by space; one ton being represented by 100 cubic feet or, where metric measurement is concerned, 1000 cubic centimeters per ton.

Gross Weight
Total weight of container, chassis, tractor and payload.

To separate a container physically from a chassis stacking the container on the ground


Hague Rules
International Agreement setting forth conditions governing the carriage of goods by sea. Article IV, Rule 5, states that liability for the shipowners negligence is limited to $500 per unit

The Hague Rules package limit is Sterling 100. 
U.S. C O GSA $500 per package. 
Hague Visby is 555.67 SDR's. 
Hamburg Rules 2.5 SDR's per Kg or 835 SDR's per package

Warsaw Convention $20 per Kg.

High seas
Maritime areas that are outside the jurisdiction of any State.

Hull Insurance
Insurance on the ship, its machinery and equipment


Implied Warranty
A warranty that is not expressed in a policy, but which is implied to be therein by
law (eg warranty of seaworthiness in a voyage policy, warranty of legality in all policies).

Goods or services purchased from another country and brought into one's own country.

A set of ICC (International Chamber of Commerce) terms offered for optional use in trading contracts and intended to reduce misunderstandings in the meaning of international trading terms.

Liability of an insurer for loss under a policy.

Inherent Nature
The natural tendency of certain cargoes to suffer from inevitable loss; usually engendered by delay in transit. An example would be fruit which deteriorates naturally during delay. Unless the policy provides otherwise, inherent nature of the subject matter insured is excluded by the MIA, 1906.

Inherent Vice
A quality in a cargo which, in event of certain circumstances, will cause loss to the cargo. An example would be the inherent vice in soft coal which can give rise to spontaneous combustion when the coal is carried in a wet condition in a hot humid hold. Unless the policy provides otherwise, inherent vice of the subject matter insured is excluded by the MIA, 1906.

Initial Carrier
The transportation line to which a shipment is delivered by the shipper.

Inland Carrier
A transportation line which hauls export or import traffic between ports and inland points.

Institute Cargo Clauses
Standard insurance conditions, published by the Institute of London Underwriters, for policies covering goods in transit overseas.

Institute Clause
A standard clause published by the Institute of London Underwriters.

Institute of London Underwriters
An organization representing the interests of member insurance companies. Although the majority of members are British companies, membership is available, at the discretion of the ILU, to foreign companies. The Institute maintains a close liaison with Lloyd's marine market, and provides facilities for a number of joint committees to operate.

Insulated Container
A container used to protect cargo from freezing or extremely warm temperatures with no refrigeration unit.

Insurable Interest
The interest one has in relation to property exposed to peril whereby one may lose financially by the loss of, or damage to, such property or may incur a liability in respect thereof. A person who effects a marine insurance contract without an insurable interest or a reasonable expectation of acquiring such interest is guilty of an offence under English law. In order to claim under a policy, one must have an insurable interest in the subject matter insured at the time the loss occurs.

Insured Value
The value of property as expressed in a policy of insurance.

Between one coast and another, as between the Atlantic and the Pacific coasts.

Between two or more transportation lines or a carrier with which one inte rchan ges cargo and/or equipment.

Interline Freight
Freight moving from point of origin to destination over the lines of two or more transportation lines.

Combination of modes of transportation.

Invoice (Export)
A document setting out in detail the goods consigned, marks and numbers, cost, any charges, and name of consignee.

Inward Charges
Pilotage and other expenses incurred on entering port


Jason Clause
A clause in a contract of carriage relating to liability of the shipowner under the US Harter Act in disputes concerning general average.

Jason Clause
A clause in a contract of carriage relating to liability of the shipowner under the US Harter Act in disputes concerning general average.

Jerque Note
A document given to the master by the Customs after the inward cargo is discharged and the vessel has been rummaged.

Cargo or goods which sink when jettisoned. The term applies also to such goods when washed ashore.

The act of throwing overboard part of a vessel's cargo or hull in hopes of saving the ship from sinking.

Jurisdiction Clause
A clause in a policy that specifies the country in which any court action relating to the policy must be pursued


Keep From Freezing.

Knocked Down Condition
Goods (eg vehicles) dismantled for transit


Less than a full container load.

Less than a full Truck Load.

Cargo thrown overboard, but buoyed so that it may be recovered.

Materials used to secure cargo in a container or trailer, or to secure containers or other heavy lifts in or on the vessel. Such materials usually consist of wire rope, turnbuckles, chains, and binders, etc. The act of securing cargo in containers or trailers or securing other heavy lifts and/or containers in or on a vessel.

Lay Days
Days allowed by charter for loading or discharging cargo.

Legal Weight
The weight of the goods and interior packing, but not the container (a term used in foreign trade). A maximum weight limitation for a total highway authorities which, when exceeded, may subject carriers to fines or impounding vehicles.

Letter of Credit
A form letter issued by a bank indicating that a purchaser in a foreign country has established credit in a specified amount in the seller's favor and that payment will be made upon presentation of draft together with certain specified documents.

A claim against property which then serves as security for the payment of that claim.

Light Bill
A receipt for the payment of light dues.

Light Box
A container containing less than the full load of cargo by volume or weight and in which other small shipments can reasonably be loaded.

Light Dues
Moneys collected by the U.K. Customs on behalf of Trinity House for the maintenance of lighthouses and buoys. Dues are levied on vessels according to their net registered tonnage.

Light Vessel
A vessel which has space available for the acceptance of additional loaded containers.

The price paid for loading or unloading ships by lighters or barges.

The movement of freight between major market areas, i.e., Japan to U.S. versus feeder vessel operations.

A ship on a regular schedule calling at specified ports

Lloyd's Agents
Persons appointed by the Corporation of Lloyd's and stationed in most world ports. O ne of their many functions is to safeguard Lloyd's interests and report movements and losses of ships.

Lloyd's Broker
An intermediary who negotiates insurance contracts with Lloyd's underwriters on behalf of his clients, the assured. For a broker to be admitted as a Lloyd's broker he must satisfy the Committee of Lloyd's that he is a suitable person to become a Lloyd's broker. O nly Lloyd's brokers and their nominated substitutes (holding a valid Lloyd's security pass) are permitted to enter the underwriting room at Lloyd's to transact business with underwriters.

Load Line
The Load Line, sometimes called the Plimsoll Line, or "marks", indicates the depth in the water down to which a ship may be loaded; the position of these marks is governed by international convention and is calculated by a Classification Society surveyor.

Long Ton
2,240 pounds.

Loss of Specie
A change in the character of cargo which, in insurance terms, is effectively an actual total loss.

Lump Sum Freight
A fixed freight rate, regardless of how much cargo is loaded


Made Good
The sums paid to a general average fund to make good losses incurred by the general average act.

A document giving the description of a ship's cargo or the contents of a railcar, truck, or container.

Maritime Lien
The claim a master and crew have on the vessel for the payment of wages due. The terms may be applied, also, to the rights of a salvor in regard to property that is subject to a salvage award; also, to the rights of a carrier in regard to cargo that is liable for a general average contribution.

Letters, numbers, and/or characters placed on a package for purposes of identification.

The admiralty law term for the captain of a ship.

Mate's Receipt
A receipt signed by the mate to say the cargo has been received on board in good order and condition.

Material Circumstances
Any circumstances that would affect a prudent underwriter in deciding whether or not to accept an insurance contract and in assessing the correct premium to charge.

Measurement Cargo
Cargo on which the transportation charge is assessed on the basis of measurement.

Memorandum Bill of Lading
The triplicate copy of a an inland/domestic bill of lading.

Missing Ship
A ship is deemed to be "missing" when, following extensive inquiries, she is officially posted as "missing" at Lloyd's. She is then considered to be an "actual total loss" and policy claims for both hull and cargo are settled on that basis


Net Loss
The amount of loss sustained by an insurer after giving effect to all applicable reinsurance, salvage, and subrogation recoveries.

Net Tonnage
This is the gross tonnage of a ship less the machinery, boiler and bunker, crew and stores spaces.

No Cure -No Pay
The principle of pure salvage whereby the salvor who fails in his task receives no reward for his effort


O.C.P. (Overland Common Point)
Movement of a trailer to or from an inland location to a port at the shipper's or consignee's expense.

O.C.P. Shipment
A shipment to/from an inland location to/from a port.

Open Charter
Where the charter-party specifies neither the kind of cargo nor the ports of destination.

Ordinary Leakage
Natural loss of liquid in a cargo (e.g. evaporation of water in grain, evaporation of oil, contraction of oil, etc. during transit).

Original Bill
Original Bill of Lading.

The quantity of cargo discharged from a ship.

Over-Booked Vessel
A condition in which all available container spaces aboard a given vessel are reserved and more containers have been booked to the vessel that it can carry.

A term used to define the addition premium paid under a cargo open cover in regard to the 'held covered' provision in the Institute classification clause.

Owner - Operator
Independent trucker, usually moving trailers under the authority of a motor carrier


P & I Club
A mutual association formed by shipowners to provide protection from large financial loss suffered by one member by contribution towards that loss by all members. The P & I club covers liability not insurable by the shipowner in the running of his ship. For example, collision liability not covered by the hull policy, contractual liability to cargo owners and others, defense costs, etc. Members pay an initial subscription which may be 'topped up' with calls on members if the fund held by the club is insufficient to meet demands upon it.

Permanently Out of Service.

Packing List
A detailed specification as to goods packed.

Particular Average
A fortuitous partial loss to the subject matter insured, proximately caused by an insured peril but which is not a general average loss. In a freight at risk policy the term may be applied to a claim for loss of freight following a particular average loss of goods.

Particular Charge
An expense incurred by an assured in relation to an insured loss. This can be a means of preventing further loss in transit (e.g. sue and labor charges), of assessing loss (e.g. a survey fee) or making good a loss at destination (e.g. repacking); the latter being sometimes referred to as an "extra charge" when connected with a claim on the policy.

Per Diem
By the day.

Percentage of Depreciation
The proportion of the total value of cargo that is the subject of loss from an insured peril. The percentage is applied to the sum insured by the policy to determine the amount of claim payable.

Perfecting the Sight
Adding necessary details of the bill of lading when such had been previously omitted.

A term used in the Marine Insurance Act, 1906, to denote a hazard. The principle of proximate cause is applied to an insured peril to determine whether or not a loss is recoverable. In modern practice the term 'risk' replaces 'peril'.

Perishable Freight
Freight subject to decay or deterioration.

Pier to House
Container stowed at pier and unloaded at destination consignee.

Feloniously breaking into containers and/or individual cartons and taking and removing property of others.

An assault on a vessel, cargo, crew or passengers at sea by persons owing no allegiance to a recognized flag and acting for personal gain. It also includes acts of rioters who attack a ship from the shore and of passengers who mutiny.

Point of Entry
A port at which foreign goods are admitted into the receiving country. Ports of Entry are officially designated by the government.

Point of Origin
The station at which a shipment is received by a transportation line from the shipper.

A contract of insurance.

Power of Attorney
A document which empowers one person to act for another.

Permission to land crew and cargo after the vessel has satisfied the port doctor as to the
state of health on board.

A written declaration by the master and witnessed before a Notary Pu blic.

Proximate Cause
The most effective cause of a loss in a chain of events leading to the loss. A basic
principle of insurance in that, unless the policy provides otherwise, the underwriter is not liable for any loss that is not proximately caused by an insured peril


Railroad Freight Station provides for the handling of less than container load cargo.

A container which requires unloading and reloading to the same vessel during the stevedoring sequence of events.

Unloading the cargo from one container into another container due to defective equipment or the freight's requiring rehandling or weight adjustment, or improper blocking and bracing.

The act of changing the original bill of lading as to consignee before cargo is tendered for delivery.

Refrigerated Container (Reefer)
A container capable of maintaining a given temperature inside the container, either heated or cooled, usually with mechanical machinery.

Relay Container
A container arriving on one vessel into a port and reloading onto another vessel to reach its ultimate destination.

O nce a load has been authorized to be stowed, a transfer of stowage information within the computer takes place. This information is then used by the stowage department to assign a specific ship position to a container. A signification by Customs that proper entry has been made on an import shipment and the cargo can be delivered to principals. 

A force causing container and cargo to move front to rear, side to side.

A fortuity, it does not embrace inevitable loss. The term is used to define causes of loss covered by a policy


Property taken over by an insurer to reduce its loss.

Salvage Adjustment
A compromised settlement on a cargo policy, usually when the adventure has been terminated short of destination and damaged goods are sold at the intermediate port. The underwriter pays the difference between the sum insured by the policy and the proceeds of the sale.

Salvage Association
An association, closely connected with the London insurance market, whose functions is to take instructions from interested parties (eg underwriters) to investigate casualties and to make recommendations for the preservation and protection of property; also to determine the extent and proximate cause of loss when required.

Salvage Loss
A compromised settlement on a cargo policy, usually when the adventure has been terminated short of destination and damaged goods are sold at the intermediate port. The underwriter pays the difference between the sum insured by the policy and the proceeds of the sale.

A device that must be broken before the container can be opened. The seal is generally secured to the container by the shipper.

The fitness of a ship to encounter the hazards of the sea with reasonable safety. In addition to having a sound hull the ship must be fully and competently crewed and sufficiently fuelled and provisioned for the next stage of voyage. All her equipment must be in proper working order and, if she carries cargo, she must be cargoworthy and properly trimmed and stowed. An implied warranty applies to seaworthiness of the carrying vessel in regard to a cargo policy; but underwriters waive breach of the warranty in this case, provided the assured and their servants are not privy thereto.

A term used in marine insurance to define the insurers with whom a policy has been effected.

Settlement Currency
The currency in which a premium or claim is settled

Ship's Husband
The shipowner's agent who superintends the vessel when in port.

Shipped Bill
A Bill of Lading that acknowledges the goods have been loaded on the ship.

The owner and/or manufacturer of the cargo or the individual authorized to act as an agent for the supplier.

Shipper's Load and Count
A term denoting that the contents of a container when loaded and counted by the shipper and not checked or verified by the transportation line.

Short Delivery
The quantity of cargo delivered is less than the bill of lading quantity.

Short Shipment
When the full amount intended to be shipped has not been shipped.

Short Ton
2,000 pounds.

Shut Out
A container which was not loaded aboard the vessel due to an overbooked situation or by an action initiated by carrier.

Special Drawing Right
A term, introduced in 1984, to facilitate exchange rating regarding limitation of liability under international law. The SDR replaced the 'gold franc' in such calculations, from November 1984. The value of the SDR varies daily, and is obtainable from the customary financial sources of information.

Valuable cargo such as money, precious metal, jewelry, etc. (see also "Loss of Specie" ).

Staging receipt
A document prepared recording the booking and stowage information upon receipt of an outbound load at the marshalling yard.

The person having charge of the loading and unloading of vessel. The act of loading and/or unloading a vessel. A firm or company which specializes in the loading and/or unloading of vessels.

Stoppage in Transitu
Right of a seller to give instruction to a carrier or other bailee to withhold delivery to the buyer, usually due to non-payment for the goods.

Strike Expenses
Expenses incurred as a result of a strike, such as forwarding costs for goods that cannot be discharged at the scheduled destination port or extra freight charged for overcarriage to another port when the scheduled discharge port is strikebound. These expenses are not covered by the marine policy with the standard strikes clauses attached thereto.

Placing goods into a container.

The right enjoyed by an underwriter to take over the rights and remedies available to an assured, following payment of a claim on the policy, in order to recover up to the amount of the claim from another party who was responsible for the loss.

Substituted Expenses
Expenses incurred in place of loss or expense which would be allowed as general average (eg cost of removal of a ship, with general average damage, to a place where repairs would cost less).

Sue and Labour Charges
Expenses incurred by a marine assured to prevent or minimize loss for which underwriters would have been liable. Expenditure incurred as part of a GA act is not allowed as sue and labor, nor are expenses incurred in a salvage operation involving a salvage award. Sue and Labor charges are recoverable under a marine insurance policy whether or not the purpose for which. they were incurred was achieved. They are recoverable in addition to any other loss under the policy, even a total loss. Under a hull policy, except where they are associated with a total loss, S & L charges are subject to the policy deductible. Claims for S & L charges under a hull policy are subject to reduction to reflect underinsurance, if any.

A charge above the usual or customary charge.

Sweat Damage
Damage caused to cargo by condensation, usually due to lack of ventilation in a ship's hold.

Sympathetic Damage
Loss suffered by cargo following damage to other goods in the same ship. An example would be taint arising from odor given off by another cargo. Such loss is not recoverable under a cargo policy except, possibly, where the odor was caused by an insured peril (eg seawater entering the hold)


Trailer Interchange and Receipt. Contract used to interchange equipment between one carrier and other carriers.

T.I.R. Carnet (Transport International Routier)
International Customs document allowing passage of goods from origin to destination over several international borders without en route Customs inspection of goods.

T.K. Unit
Thermo King, mechanical refrigeration unit to cool or heat the inside of the refrigerated container.

Truck Load.

Trailer On Flat Car (container and chassis).

A railcar which is capable of transporting trailers, either C.O.F.C. or T.O.F.C., utilizing permanently mounted and retractable fifth wheel mechanism.

Railcar to carry containers C.O.F.C only.

A flatcar capable of moving container T.O.F.C only.

A cylindrically-shaped container intended for transport of liquid cargo.

The weight of a container, box or other carrier of goods when empty.

Tare Weight
(a) The weight of a container and the material used for packing

(b) As applied to a carload, the weight of the car exclusive of its contents.

The time the coverage under an insurance policy ends, either because its term has expired or because it has been cancelled by either party.

Third Party Liability
Legal liability to anyone other than another party to a contract (eg liability of one ship to another consequent upon a collision).

Through Bill
A contract of affreightment that covers goods throughout the period of transit, including both overland and sea transit.

Through Rate
A rate applicable through from point of origin to destination. A through rate may be either a joint rate or a combination of two or more rates.

Time Charter
The charterer has the use of the vessel for a specified period. The shipowner supplies the crew and provisions.

Metric measurement of weight. 1000 kilograms.

Total Loss
This can be actual total loss or constructive total loss.

Tower's Liability
Liability incurred by any ship or vessel when she is towing another ship, vessel or other object.

(a) A request upon a transportation line to establish the whereabouts of a shipment for the purpose of expediting its movement or establishing delivery

(b) A request for an answer to a communication or for advice concerning the status of a subject.

Trade Ullage
An allowance for natural loss to cargo (eg evaporation).

A Customs document used when a vessel is coasting, giving full cargo details. It serves as clearance from the port of issue.

Transit Clause
A clause in the Institute Cargo Clauses, specifying the attachment and termination of cover.

To transfer goods from one transportation line to another or to transfer goods from one vessel to another.

The act of transferring goods from one vessel to another or from one conveyance to
another, including periods at transshipping ports or places.

A powered mobile portal frame with four wheel steering. Capable of lifting, stacking and transferring containers.

A vessel which tows another vessel, the other vessel being termed the "tow"


Uberrimae Fidei
Utmost good faith.

See Trade Ullage .

Unclean Bill
A bill of lading that has been claused by the carrier to show that the goods were not in
sound condition when received.

Under Insurance
Insuring for less than the amount at risk.

A technician trained in evaluating risks and determining rates and coverage for them. The term derives from the practice at Lloyd's of each person willing to accept a portion of the riskwriting his or her name under the description of the risk.

The condition of a vessel where from any cause it is unsafe to send her to sea.

Utmost good faith
A fundamental principle of insurance with which strict compliance is required during negotiations to conclude an insurance contract. Its intention is to ensure that. by proper disclosure and representation, both parties are aware of all circumstances material to the risk at the time the contract is concluded between them. Breach of good faith on the part of the assured or his broker entitles the insurer to avoid the contract from inception


Vessel Voyage and Direction. This is used to describe the movement of the container. Example: The SS St. Louis, sailing from Elizabeth to Rotterdam on her 13th trip, would be listed as SL 13E.

Estimation of the value of an item, usually by appraisal.

Valued Policy
A policy which specifies the insured value of the ship or goods insured, as the case may be. The value so expressed is conclusive of the insurable value of the ship or goods, as applicable, in the absence of fraud; but is not to be used to establish a constructive total loss, except where the policy so provides (as in hull policies). A policy that does not specify the insured value as such is an 'unvalued' policy.

Vice Propre
Inherent vice.

Victualling Bill
A document showing bonded stores for the vessel's use.

Voidable Policy
A policy in respect of which the underwriter is entitled to avoid liability (see Avoidance ).

Voyage Charter
The shipowner hires out his vessel, subject to various conditions, for the carriage of cargo for a single voyage


Waiver Clause
A clause which entitles both underwriter and assured to take measures to prevent or reduce loss, without prejudice to the rights of either party.

Warehouse Receipt
A receipt given for goods placed in a warehouse (may be issued as a negotiable or non-negotiable document).

The person responsible for the care of goods while they are in store.

Warehousing Entry
A document required by Customs authorities when goods are placed in a bonded warehouse.

A warranty in a marine insurance policy is an undertaking by the assured, whereby he
promises that a certain thing shall be done or shall not be done, or that some condition will be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. A warranty may be express or implied, and must be complied with literally. Failure to comply with the warranty is termed 'breach of warranty', which, if not excused, discharges the underwriter from all liability under the policy as from the date of the breach.

A document prepared by a transportation line at the point of origin of a shipment, showing the point of origin, destination, route, consignor, consignee, description of shipment, and amount charged for the transportation service, and forwarded with the shipment, or directly by mail, to the agent at the transfer point or waybill destination.

Weather Working Day
A day of 24 hours on which work is not prevented by bad weather.

The person in charge of a wharf.

Without Benefit of Salvage
A term in a marine insurance policy whereby the underwriter forgoes his subrogation rights. A marine insurance policy that incorporates such term is deemed by the Marine Insurance Act to be a gambling policy and, as such, is invalid in a court of law


York/Antwerp Rules
A set of internationally accepted rules for application to general average
circumstances. Most contracts of affreightment provide for general average to be adjusted in accordance with these rules. In the absence of such agreement adjustment is made in accordance with the law of the place where the adventure is terminated

Terms of Sale

EXW (Ex Works)
The buyer is responsible for all costs and risks from the time the goods leave the seller’s warehouse until they arrive at their final destination.
FAS (Free Alongside Ship)
The seller is responsible for all charges until the goods are alongside the ship. (The definition of “alongside the ship” varies from port to port. It may mean customs warehouse, ship’s storage shed and so on.) The buyer is responsible for all costs and risks from that point until the goods arrive at their final destination.
FOB (Free On Board)
The seller is responsible for all costs and risks until the goods are onboard the vessel. The buyer is responsible from then on.
CFR (Cost and Freight)
The seller is responsible for all charges incurred to the place of discharge, except for loss or damage after they have been delivered into the custody of the shipowner at the place of shipment or point of FOB. It is the buyer’s responsibility to insure the goods once they are delivered to the place of shipment or FOB until they reach their final destination.
CIF (Cost, Insurance, Freight)
The seller’s responsibilities are the same as for CFR sales, except that the seller arranges insurance to the final destination of the goods, providing cover in terms that are usual to the trade. The buyer pays for and takes title to the policy when the goods are paid for.
FIS (Free Into Store)
The seller is responsible for all costs and risks until the goods are delivered to the buyer’s warehouse. The buyer does not need to arrange insurance at all.
Terms of Sale - How they Work
In commerce, sales are made under internationally recognised terms of sale. Risk responsibility for goods passes at different stages of transit, according to the terms of sale. This is a general summary of terms:

Terms Risk transfers Insurance required by
Ex Works (EXW) When goods have been placed at the disposal of the buyer Buyer from seller's warehouse
Free Carrier (FCA)

When goods have been delivered into the custody of the carrier Buyer (and seller up to the carrier)
Free Alongside Ship (FAS) When goods have been effectively delivered alongside the ship at the named port of shipment Buyer (and seller up to the ship's side)
Free On Board (FOB) When goods pass the ship’s rail at port of shipment Buyer (and seller up to the ship)
Cost and Freight (CFR) As FOB, but the seller prepays freight to destination Buyer (and seller up to the ship)
Cost, Insurance, Freight (CIF) When goods cross the ship's rail at port of shipment Seller (insurance policy sold to buyer with cost of goods)
Delivered at Frontier (DAF) When goods are put at the disposal of a buyer at a named place at frontier Seller (to frontier) Buyer (from frontier)
Carriage Paid To.... (named
point of destination) (CP)
When goods are delivered into custody by a first carrier who undertakes carriage from the place of departure Buyer (seller until delivered into custody by first carrier)
Delivered Duty Paid (DDP) When goods are put at the disposal of a buyer at a named place or destination Seller
Seller Free Into Store (FIS) When goods are accepted with duty paid at the buyer’s warehouse (not an internationally
recognised term of sale).