| TITLE |
DESCRIPTION |
| L.C.L. |
An abbreviation used in the practice o conveying goods by container. It refers to ‘less than full container load’. |
| L.O.P. |
Loss of profits. |
| L.P.S.O. |
Lloyd’s Policy Signing Office. |
| L.R. |
Lloyd’s Register. |
| L/C |
Label Clause or Letter of Credit. |
| Label Clause |
There are two types of this clause in use in the marine market, both of which concern canned or similar goods where identification or sale may be affected by damage to the attached labels. In the event of contact with water the labels may be damaged or washed off. The most common form of the clause excludes claims for lost or damaged labels and limits the insurer’s liability to the cost of relabelling and repacking the goods. The little used form of the clause excludes claims for lost or damaged labels unless caused by the vessel being stranded, sunk, burnt, on fire or in collision or contact with any substance other than water. |
| Labour Costs |
When repairs are carried out on a ship for the insurer’s account all ordinary labour costs are part of the cost of repairs and are payable under the policy. |
| Laden Loadline |
The loadline marked on the side of a ship indicating the maximum depth the vessel is allowed to sink, when lade, to comply with the loadline regulations. Also termed “Load Waterline”. |
| Laid Up |
Relates to ship insurance effected for a period of time and to periods during which the vessel is laid up out of commission. |
| Land Risks |
Those perils which may operate when cargo is in transit on and to the port of loading or from the port of discharge. These risks are not maritime in nature and unless embraced by the perils specified in the policy form (i.e. fire), they are not covered by the ordinary policy except when expressly specified therein. They are covered by the term “all risks” when the policy contains a warehouse to warehouse clause. |
| Latent Defect |
A hidden flaw or defect in the construction of the ship which is not readily discoverable by a competent person using reasonable skill in an ordinary inspection. Unless the policy so provides damage caused by a latent defect is not recoverable, nor is the mere discovery of a latent defect. |
| Lay Days |
Under a voyage charterparty it is essential that the vessel is not delayed longer than necessary when discharging or loading cargo. For this reason a fixed number of “lay days” is allowed for the purpose of loading or discharge. It is usual to specify the number of days allowed separately for either loading or discharge but in some cases “reversible lay days” are agreed. This agreement allows a fixed number of days in total for both loading and discharge. If the vessel is still “lying” at thew harf on expiry of the specified lay days “demurrage” or loss of hire, is payable by the charterer. |
| Laytime |
A shipping charterparty term. In a voyage charterparty laytime is the period of time agreed during which the shipowner is required to make the chartered vessel available to the charter for loading and/or discharging cargo. |
| Leader |
Leading underwriter; Leading company. |
| Leading Underwriter |
An insurer whose lead is followed by other underwriters on a placing slip. The broker negotiates the contract and the premium rate with the leading underwriter. |
| Leakage |
Except where the policy provides otherwise, section 55 (2c) of the MIA, 1906, excludes ‘ordinary leakage’ in the subject matter insured. This refers to cargo which is subject to loss in volume or weight by reason of evaporation or other natural causes. |
| Legal Expenses |
A cargo assured may incur legal expenses in a suit against a third party who was legally responsible for loss of or damage to the insured goods. The insurer is not liable to reimburse the assured for such expenses except where the legal action has been taken with the consent of the insurers to purse their subrogation rights. |
| Legal Liability |
A liability which can be enforced in a court of law. Matters of conscience or moral liability are of no concern to insurers. A ‘liability’ insurance covers only legal liability incurred by the assured. |
| Letter of Credit |
In general, the term indicates a document which authorises payment of an agreed sum of money to the person named therein. When such a document is used in the “documentary credit system” for payment of goods it is usually “irrevocable” and authorises the bank named in it to pay for the goods; the document being honoured by the issuing bank when it is confirmed by the consignee who he takes up the documents of title following arrival of the goods at the destination port. |
| Letter of Indemnity |
This is a document which is given to a party of whom it is required that an unqualified guarantee be given when the circumstances demand a qualified guarantee. The letter agrees to indemnify the guarantor against any loss he may suffer by reason of not qualifying the guarantee. |
| Letter of Subrogation |
A document giving authority to the insurer to sue a third party in the name of the assured for damages when that third party is responsible for a loss which has resulted in a claim under the policy. |
| Lift Van |
The part of a rail van which is detachable from the rail flat so that the goods can be removed from the train as a single unit, rather than be unloaded from the van. The loaded van can, then, be carried by a motor transporter to a depot for unloading; thereby freeing the train of ‘flats’ for quicker loading and ‘turn round’. |
| Lighter |
Originally the term referred to a craft which was used to lighten a ship by removing cargo therefrom. However, today, the term is commonly used in respect of any craft which is used to load or unload a ship. |
| Lighterage |
Money paid by the shipowner, shipper or consignee for the use of craft or lighters in carrying cargo. |
| Limit any one Vessel |
When a contract of marine insurance cover goods to be shipped by several vessels, either named or to be advised later, it is usual to limit the insurer’s liability on the amount carried by any single vessel. This provision always appears in open covers and open policies. |
| Limit of Liability |
Insurer’s maximum liability under a policy. |
| Limit per Bottom |
The limit any one vessel. |
| Liner |
Vessel engaged on a regular run and keeping to a time schedule. The liner is considered a better risk than the “tramp” which is a vessel not engaged on a regular run. Liners generally have a higher standard of maintenance and the better class of officers and crew. |
| Lloyd’s |
A society of insurance underwriter based in London. Lloyd’s of London takes its title from a coffee house, run by a Mr Edward Lloyd. Mr Lloyd’s first coffee house was located in Salutation Precinct, Tower St., London. The earliest record of this establishment appeared in the London Gazette in February 1688. |
| Lloyd’s Broker |
An insurance broking organisation which has satisfied the Committee of Lloyd’s that it has attained the standard required by Lloyd’s for agents representing assured who propose contracts of insurance to Lloyd’s underwriters. |
| Lloyd’s Register of Shipping |
An independent, non-commercial Society whose function is the classification of merchant ships, the establishment of standards for their construction and maintenance and the provision of a worldwide technical service. Lloyd’s Register, the oldest and largest classification society, was founded in 1760 by the underwriters who frequented Lloyd’s Coffee House, and was reconstituted in essentially its present form in 1834. It has no direct connection with the Corporation of Lloyd’s. |
| Lloyd’s Survey Handbook |
A Lloyd’s publication used as a book of reference by those engaged in marine insurance and shipping when cargo losses occur. It is particularly useful to marine superintendents and others concerned with handling of cargo. |
| Load Displacement |
A measurement in cubic tons that is equivalent to the quantity of water displaced by the vessel when floating at her load draught. |
| Loaded Draught |
The dept of water required to maintain a laden vessel afloat. |
| Loading the Premium |
Increasing the premium to charge more than would normally be charged. |
| Loadline |
The marking on the side of a ship below which the ship must not sink when the vessel is loaded and in still water. There are generally two loadlines, one for summer and the other for winter. A vessel may also have a fresh water loadline. The loadline is recognisable on the side of the hull at mid-ships and has the initials of the Authority which calculated the measurement shown either side of the line. |
| Long Ton |
Weight measurement of 2,240 lbs. (Metric ton is 2204.60 lbs.) |
| Loss of Market |
This risk is not insurable in the marine insurance market. Neither is loss of market admitted as general average, since it is not directly consequential upon the act. |
| Loss of Profits |
The only basic form of profit insurance is that on ordinary cargo when the profit anticipated is included in the agreed insured value of the cargo. Provision is made for the inclusion of such profit in the valuation clause in open covers and floating policies. Insurances on loss of profit alone are, in effect, loss of market insurances and are not readily acceptable in the London Market. |
| Loss of Specie |
This is an actual total loss. Loss of specie occurs where the insured property is so damaged that it ceases to be a thing of the kind insured, that is, it changes its specie. The test can be applied, also, to circumstances where the insured property cannot be used for he purpose for which it was intended. Examples would be bags of cement which had been immersed in seawater or bags of potatoes which had suffered a similar fate and had become too soft to be sold for human consumption. |
| Loss of Time |
The MIA, 1906, section 55, excludes losses proximately cased by delay even when the delay is caused by an insured peril. However, the Act does allow the parties to the contract to incorporate this risk into the contract, at their option. |
| Loss Overboard – Cargo |
The ICC(1982) A cover cargo which is lost overboard, subject to the exclusions expressed in the policy. Subject to the policy exclusions, the ICC(1982)B cover loss of or damage to cargo caused by its being washed overboard; but not where it is otherwise lost overboard, except during loading or discharge or during discharge at a port of distress. Subject to the policy exclusions, the ICC(1982)B & C cover loss of cargo caused by jettison. |
| Loss Payee Clause |
A provision, in a policy, which states the name of the person or persons to whom claims, if any, are to be paid. |
| Loss Ratio |
The ratio found by applying the total of claims paid in proportion to the net premium income over a given period. |
| Loss Reserve |
A reinsurance treaty provision entitling the ceding Company to retain an amount of money to cover claims which have been presented to the ceding Company but have not yet been actually settled under the original policy. |
| Lutine Bell |
The bell salved in 1859 from the frigate Lutine, which was lost at sea in 1799, now hangs in the Underwriting Room at Lloyd’s. Traditionally it is rung to command attention for any announcement of importance. |
