| TITLE |
DESCRIPTION |
| C & F |
Cost and freight. Sale term relating to goods in transit. This is the same as C.I.F. except that the seller does not arrange insurance for the buyer. |
| C.I.F. or c.i.f. |
Cost, insurance, freight. A term of sale for goods in transit. The seller pays all costs of transit to the final destination and arranges insurance protection on the terms specified by the buyers. The insurance premium and shipping charge are included in the price paid by the buyer. Whilst the seller is responsible for the goods under they are handed over to the buyer he assigns the policy or certificate to the buyer on receipt of payment for the goods, leaving the buyer to claim on the insurance in the event of an insured loss occurring. It is customary for the insured value to include, in addition to C.I.F., a percentage to cover the seller’s profit. |
| C.M.R. |
Convention on the Contract for the International Carriage of Goods by Road. |
| C.O.G.S.A. |
Carriage of Goods by Sea Act. |
| C.R.O. |
Cancelling Returns Only. |
| C/N |
Cover Note or Credit Note |
| Cancellation |
If the risk does not attach and the subject matter is not imperilled the insurance is cancelled automatically. Once he subject matter has been imperilled cancellation can only be effected by agreement between parties, except where one of the parties is at fault in circumstances where he aggrieved party is entitled to avoid the policy. (See “Cancellation Clauses”, “Termination Clauses” and “Cancelling Returns”.) |
| Cancellation Clauses |
These should not be confused with a ‘termination clauses’. A termination clause is incorporated in the contract to cancel cover immediately upon the happening of a specified circumstance (e.g. outbreak of a major war brings into operation the termination clause in a policy covering a ship against war risks and automatically terminates the policy with immediate effect). A cancellation clause, on the other hand, is incorporated in the contract to allow either party the option of cancelling the contract by giving notice of intent. |
| Capacity |
The maximum amount of liability in the aggregate that an insurer can accept without risking insolvency. |
| Cargo |
Goods and/or property and/or merchandise carried by a vessel for the purpose of earning freight. |
| Cargo All Risks Clauses |
This term was used to define the standard Institute “all risks” cargo clauses for use with the S.G. form of policy. These clauses were withdrawn with abrogation of the S.G. policy, in 1982. The replacement clauses (for use with the MAR form of policy) still cover “all risks” and are known as the A clauses; but the cover is subject to many exclusion clauses which did not appear in the old clauses. |
| Cargo F.P.A. Clauses |
These were introduced for attachment to the Lloyd’s S.G. policy and its company market cargo equivalent. With the abrogation of these policy forms the FPA clauses were withdrawn. Insurers in the London market do not write FPA cover any more. So there is no replacement set of these clauses available for use with the MAR form of policy. It is not practical to use the FPA clauses with a MAR form of policy. |
| Cargo Interest |
An insurable interest connected with cargo. The term is used when referring to any allied interest other than the cargo owner’s, which is obviously a cargo interest, to differentiate from hull interest. |
| Cargo W.A. Clauses |
This set of standard clauses was published by the Institute of London Underwriters for attachment to Lloyd’s S.G. policy or the company market cargo equivalent policy form. When these forms of policy were withdrawn, in 1982, the ICC W.A. were, also, withdrawn, since it would be impractical to use these clauses with the MAR form of policy. No replacement set of WA clauses was introduced for use with the MAR form of policy. |
| Carrier |
Shipowner or other person who carries goods by vessel. |
| Casualty |
An accident or fortuity. |
| Certificate of Insurance |
A document is issued to the assured certifying that an insurance has been effected and that a policy has been issued. In marine insurance practice, certificates are used where an open cover is effected with underwriters. |
| Certificate of Origin |
Gives full details of the country of origin in respect of goods. Is used as evidence of origin. |
| CFR |
Cost and freight – Incoterms. |
| Charterer |
A hirer of a vessel from the owner either for a period of time or a voyage. |
| Charterparty |
Conditions under which a charterer hires a vessel. |
| CIP |
Carriage (or freight) and insurance paid (named point) – Incoterms. |
| Civil Commotions |
Internal national disorders. Loss of or damage to the insured interest is not covered against this peril without the incorporation of the Strikes clauses. The standard Strike clauses always include this peril. |
| Claims Adjuster |
An official employed by a Company to be responsible on behalf of the Company for claims settlement. |
| Claims Payable Abroad |
A provision which may be expressed in a policy and certificate, at the request of the assured, which permits the collection of claims abroad from an authorised person whose name is stated in the policy and certificate. |
| Classification |
Refers to the classing of a vessel with one of the recognised Societies. |
| Classification Clause |
This clause is used in Open Policies or Open Covers. Since such insurances are effected subject to subsequent declaration of shipments and carrying vessel it is necessary to incorporate a clause which specifies the minimum standard required for carrying vessels if the premium is to remain as stated in the scheduled attached to the insurance. |
| Clean |
An expression used to denote that the conditions of a shipping document are without any detrimental qualifications. A detrimentally qualified document may be referred to an “unclean”, “foul” or “dirty”. The word “clean” may also be used in insurance when referring to an open cover or a treaty or any other form of insurance or reinsurance for a period of time. In this case it means that the insurance has suffered no claims. |
| Club |
Protection & Indemnity Club or P&I Club. |
| Club Call |
Payments by members of a P&I club to the club. When the tonnage of a member’s vessel is entered in the Club the member pays only a nominal entry fee. Periodically the Club aggregates the total claims upon the Club together with the funning expenses and sends a “call” to each member to pay his proportion of the total outgoings of the Club. |
| Coastal Liner |
Small liners up to 4,500 tons approximately engaged in coastal and local voyages. |
| Co-Insurance |
When two or more insurers each have part of the risk under a single insurance. |
| Collision |
Means collision or actual contact with another ship or vessel. In determining collision liability, where the insured ship collides with another vessel it is necessary to be more specific in determining what, in fact, constitutes a collision; this requires actual physical contact between two vessels and does not embrace excessive wash, nor liability incurred by the assured by reason of contact of the vessel with anything other than a vessel. |
| Collision Costs |
Legal costs incurred in defending an action by the other vessel’s owners against the insured vessel or in pressing a claim against the other vessel to recover in respect of damage to the insured vessel. |
| Combi Ship |
A ship designed to carry cargo both conventionally and by container. |
| Commencement of Adventure |
The adventure commences when the insured interest is exposed to the possibility of peril. |
| Common Carrier |
A carrier who agrees to carry any goods. A carrier who refuses to carrycertain types of good, mainly for safety of the vessel and other cargo, is not a common carrier. |
| Compliance with a Warranty |
A warranty must be strictly complied with, whether or not is material to the risk, or the insurer is discharged from liability as from the date of the breach. |
| Concealment |
Non-disclosure of a material circumstance probably amounting to fraud. |
| Condition |
A condition is imposed in the contract by the insurer and must be literally complied with unless it is waived by the insurer. A condition goes to the root of the contract and non-compliance by the assured enables the insurer to avoid the policy from inception. |
| Conference Lines |
A liner conference is a group of shipping lines regularly serving a particular trade route and aimed at reaching agreement on the stabilisation of freight rates and on organisation and working conditions in that trade. |
| Conference System |
A system employed by shipping lines to establish regular services and economic running of their lines. |
| Consequential Loss |
A loss following and consequent on a loss proximately caused by a peril insured against. The insurer is not liable for consequential loss. Neither is consequential loss allowed in general average except where it is directly consequential on the general average act. Loss of market is an example of consequential loss. |
| Consideration |
This term has more than one meaning in marine insurance. It can relate to the premium paid to bind the insurer to the performance of the contract and is used in this manner in the policy wording. The MIA (1906) uses the term in regard to the insurer’s obligations under the contract, when it refers to return of premium because the consideration for which the premium was paid totally fails. In simple terms, the Act is referring to circumstances where the subject matter insured is never exposed to risk. |
| Consign |
To despatch goods. To send forward. |
| Consignee |
Person to whom the goods are consigned. |
| Consignor |
The person who consigns the goods. |
| Construction Total Loss |
In marine insurance the assured has the right to abandon the insured property to the insurer and to claim a constructive total loss where, because of the operation of an insured peril, (a) the insured is deprived of the insured property and is unlikely to recover it, or (b) an actual total loss appears to be inevitable, or (c) in the case of a ship – the estimated costs of recovery and repair would exceed the repaired value or (d) in the case of cargo – the estimated costs of recovery, reconditioning and forwarding to destination would exceed the arrived value.It is a condition precedent to a CTL claim that the assured must give notice of abandonment to the insurer. |
| Constructive Total Loss Clause |
In a cargo policy this clause, merely, indicates to the assured the circumstances in which he can claim a constructive total loss, as provided by the MIA (1906). In a hull policy this clause reduces the assured’s legal rights in claiming a CTL, in that it replaced the ‘repaired’ value with the ‘insured’ value in the calculation. This prevents the assured from claiming a CTL where the repaired value is less than the insured value and the comparison costs do not exceed the latter. |
| Container |
A large metal box in which many packages can be stowed in advance of loading on the ship so that the container can be loaded, stowed and discharged as a complete unit. Containers vary in length and size being up to some 40 ft. long and 8 ft. wide. They are of light, but strong, metal construction with opening doors at either end. Some containers, generally of only 20 ft. in length, have been designed with side opening doors as well. Special loading and unloading facilities are generally necessary at the ports of loading and discharge. Uniformity in size and design of the containers and specialisation by the carrying vessels are essential for the efficiency of carriage by containers. |
| Contamination |
Losses proximately caused by contamination are not covered by the policy. Losses due to contamination but proximately caused by a peril insured against (i.e. seawater damage) are recoverable. The policy may be extended to cover the risk of contamination if the insurer agrees to accept this peril. |
| Contingency |
The happening of a foreseen occurrence or event, but which is not an inevitability. For example, “Back Freight”. |
| Contingency Risk |
An insurance when the insurer holds himself liable to pay a fixed amount in the event of a specified contingency occurring. |
| Contingent Interest |
An insurable interest which may attach during the currency of the adventure by the happening of a contingency. Buyer’s interest may be a contingency interest if he acquires title to the goods after the commencement of transit. |
| Contract of Affreightment |
The bill of lading or other form of contract in respect of the carriage of goods. It is one of the documents of title required as collateral by a bank when advancing credit against goods in transit. |
| Contract of Carriage |
The contract between an overseas carrier and the consignor of cargo carried aboard the ship. This is usually in the form of a bill of lading. |
| Contract of Marine Insurance |
An agreement whereby the insurer undertakes to indemnify the assured to the extent agreed in the event of a marine loss. The contract is concluded when the insurer initials the slip. The contract is not valid in law unless it is embodied in a properly executed policy. |
| Contractual Liability |
Liability incurred by a party to a contract to the benefit of the other party. Legal liability is in the absence of contract. |
| Contribution |
There are two meanings for this term in marine insurance. The first is used when at the time of loss there are in existence two or more insurances covering the same interest. This is termed double insurance and, provided there is no fraud, the Marine insurance Act 1906 in Section 80 provides that each insurer is bound to contribute, with other insurers, rateably toward the loss in proportion to the amount for which he is liable under the policy. An insurer who, in such circumstances, has paid more than his rateable proportion may claim a contribution for the amount overpaid from the other insurers. In any case, the insured may not recover more than a property indemnity, that is the amount of his loss plus and profit included under a value policy, over all. The second use of the term “contribution” concerns the insured’s contribution to general average of salvage charges and the insurer’s liability in respect thereof. |
| Contributory Value |
The value on which general average contributions are based. It is the nett arrived value of the interest plus any amount to be made good in general average. |
| Conventional Carriage |
The carriage of goods packaged or in small units, other than by container. |
| Conveyance |
Craft, lighter, rivercraft, barge, road transport, rail or similar. The overseas vessel is not intended to be embraced by the term. Aircraft where no sea transit is involved are not embraced, now where the use of aircraft is not a customary method of mobbing the goods inland to or from the port. |
| Cost of Removal |
If it is necessary for the vessel to be removed to another place for repair, with the insurer’s approval, the costs of removal and return if necessary are part of the reasonable cost of repairs. |
| Costs |
Legal costs incurred by the assured in defending a claim for which the insurer would be liable . Where the insurer approves the defence action these are borne by the insurer. May also refer to expenses incurred in connection with a general average act. |
| Country Damage |
Damage or deterioration of baled or bagged goods (such as cotton or coffee), prior to loading on the overseas vessel, caused by the absorption of excessive moisture from damp group or exposure to weather, or damage or deterioration from grit, dust or sad forced into the subject matter of the insurance by windstorm or inclement weather. |
| Cover Note |
A document issued by a broker to the assured evidencing the terms and rate on which an insurance has been placed. The insurer has no legal obligation under a broker’s cover note, but in the event of negligence of the broker whereby the assured is prejudiced the cover note may be used by the assured in evidence against the broker. |
| Cubic Ton |
For the purpose of calculating displacement tonnage 33 cubic feet of water is deemed to be equivalent to one cubic ton. For the purpose of calculating gross and net registered tonnages 100 cubic feet of space is deemed to be the equivalent to one ton. |
| Cut Through Clause |
The original assured has no legal rights in a reinsurance contract. In the absence of any express provision to the contrary in the reinsurance contract, where the reassured does not settle a claim on the original insurance, no claim is collectible under the reinsurance contract. This means that the unsatisfied original assured cannot pursue an action against the reinsurer to reimburse himself for his loss. A cut through clause is a condition in the reinsurance contract which guarantees payment to a party who is not party to the reinsurance contract. Thus, depending on how it is worded, the clause might afford the opportunity for the original assured to claim directly from the reinsurer. |
