Bagged Cargo Clause
Excluding shortage from sound bags but including shortage from torn/burst bags with loss of quantity to be determined by the difference between the weight of the damaged bags and the average weight of an equal number of sound bags at destination selected at random by the attending surveyor
[ the above basis to be used for computing shortage from torn/burst bags, whether fully or partially empty.]
Subject to policy deductible, if any.
Explanation: To the standard Bagged Cargo Clause, I added "selected at random" in the above version. In fact in my book there are other versions created by me to lend more certainty to the principle behind this clause. Often the packing list or weight list would give the weight per bag (say 80kgs). However, in reality, shipments of commodities from some country do not achieve such a standardisation. Weight even from sound bags vary and this variation is not necessarily due to loss of moisture during the voyage! The bagged cargo clause ensures that Insurers pay only for shortage caused fortuitously.
Buyers Interest Clause
In respect of interest purchased by the Assured on C.I.F or similar terms where seller is responsible for effecting insurance.
This insurance to indemnify the Assured in respect of and to the extent of claims which they fail to recover from the insurance effected by the seller, following loss or damage which would be recoverable under the conditions of this contract applicable to similar interest bought or sold on terms where the Assured is responsible for effecting insurance.
The existence of this insurance not to be disclosed to any third party.
All rights and benefits against the seller and/or sellers insurance and/or carriers and/or others are to be subrogated to underwriters.
Any assignment of this policy or of any interest or claim hereunder shall discharge underwriters from all liability.
Explanation: Again, many versions of this clause has been discussed in my book. The version given above mentions CIF imports by the assured. However a Buyer’s Interest cover is also applicable when the buyer is purchasing FOB or CFR or ExW or similar. To give an example, let us say cotton bales are bought from India by a buyer in the UK. If later investigation proves that the damage to bales could only have been caused during the inland transit within India whilst the goods were on their way to the port of loading, the buyer had no insurable interest for this pre-FOB damage. A Buyer’s Interest cover therefore comes to his rescue.
In CIF Incoterms, the Seller is not under an obligation (unless otherwise agreed between parties), that he procures an all risks form such as one based on ICC (A). Some versions therefore incorporate the Difference in Conditions clause also. See my book for a detailed commentary on this clause and various versions available.
Brands Clause
In case of damage to property bearing a brand or trademark, the sale of which carries or implies a guarantee of the supplier or Insured the salvage of such damaged property shall be determined after the removal of all brands or trademarks.
Explanation: The above is a very simple Brands clause. There are many (and more sophisticated) versions of this clause. One must chose the appropriate version based on underwriting information and requirement of the trade. My book contains a detailed chapter on Labels, Brands and Control of Damaged Goods clause. The book also contains a detailed commentary on how brands clause impacts premium rating and brands, logos etc can sometimes be removed before salvage sale.
This an interesting case which I have experienced.
ReplyDeleteOne full truck load consignment of chemical in powder form i.e PTA duly packed in Jambo bags was completely gutted due to fire during transit alongwith the carrying vehicle. The insured lifted the ash content and transported the same by a relief truck from the accident spot to their factory premises. The insured incurred some expenses for shifting of the materials due to the following reasons:
(i) To avoid environment pollution.
(ii)To destroy the Brand name of the company as printed in the bags.
The insured claimed for total loss of cargo which was allowed. The insured further claimed for additional expenses in addition to total loss which they incurred for removal of debries and destruction of bags. Such expenses, however, were not allowed since it was not considered as loss minimisation expenses.
Very interesting! When I was researching material for my book, I was told by a leading broker in London that he has not seen any claim under the Debris Removal clause which figures in all most all open covers arranged by a broker for large clients. But your example shows that had there been a debris clause, there would have been a recovery of such expenses! Interestingly the Institute Cargo Clauses only mention loss or damage. They do not mention expense in the perils clause and therefore unless expenses are in the nature of sue&labour expense, they are not payable. You took the right decision in the claim.
ReplyDeleteThanks for sharing your observations.
Sir,
ReplyDeleteI am in need of Customary Shipment Clause but could not find it.
Can you help me in this regard.
I thought I had replied to your query but I dont find my response in the blog! If my memory serves me right, there is no clause called Customary Shipment Clause. Can you explain exactly what you are looking for? By Customary Shipment , do you by any chance mean barges/lighterage which are customarily used within port areas? Some Open Policies mention that customary barging/ligherage within port areas is held covered or words to that effect.
ReplyDelete