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The 1982 Institute Cargo Clauses

Huang, Zhaofang (2009)
Department of Law
Abstract
Marine insurance is a contract of indemnity that the insurers protect the insured from the loss of damage caused by perils insured against, and the insured pays the premium. As the global center of marine insurance, the London market produces series of policy forms and attached standard forms widely used by the world. The currently used MAR policy form takes place of the old SG form, with the 1982 Institute Cargo Clauses (ICC) attached. This thesis will emphasis on comprehension and comments of the 1982 ICC. The subject-matter insured under the 1982 ICC is goods in the nature of merchandise, without the deck cargo and living animals covered. Whether the containers and packing materials are part of the goods will be decided in each... (More)
Marine insurance is a contract of indemnity that the insurers protect the insured from the loss of damage caused by perils insured against, and the insured pays the premium. As the global center of marine insurance, the London market produces series of policy forms and attached standard forms widely used by the world. The currently used MAR policy form takes place of the old SG form, with the 1982 Institute Cargo Clauses (ICC) attached. This thesis will emphasis on comprehension and comments of the 1982 ICC. The subject-matter insured under the 1982 ICC is goods in the nature of merchandise, without the deck cargo and living animals covered. Whether the containers and packing materials are part of the goods will be decided in each particular case. There might be a combination of causes resulting the loss or damage. The underwriters are only liable for loss or damage proximately caused by the perils insured against. The proximate cause is the efficient and predominating peril. If two of more proximate causes are concluded, they have to be all covered by the insurance policy. The insurers will not be liable for loss or damage caused by any excluded proximate cause. The principle of proximate cause keeps the balance between the insurers and the insured. Under the 1982 ICC, some words are used from time to time to mean ''proximately caused by'', while the word ''attributable to'' refers to the more remote causes. For the loss or damage to be recovered, the insured has to have insurable interest to the cargo at time of loss. The insured needs to be interested in the cargo exposed to the marine risk, which has to be concluded under each particular international contracts of sale of goods. The ''lost or not lost'' clause is to permit the insured be recovered if he does not know he has bought the already lost goods. The insurable value of the subject-matter insured is agreed by and conclusive to the insurers and the insured under a valued policy. Excessive over-valuation is allowed without fraud involved. Under the unvalued policy the insurable value of the cargo is its prime cost plus fright and insurance cost. If the loss or damage is caused by collision, the owner of carrying vessel could refuse to pay by invoking the exemption clause under the Hague/Visby Rules. While if the non-carrying vessel is also blamed for the collision, the cargo interest could claim against its owner according to its degree of faults. And in United Stated, under the both to claim situation, the cargo owner could claim the full compensation from the owner of non-carrying vessel, who then could reclaim against the carrying vessel. ''The both to claim'' clause is to make the cargo interest reimburse the owner of carrying vessel after the latter compensates to the blamed non-carrying vessel. Under the 1982 (A) clauses all risks are covered under the insurance, which is for the insured's need for wider and better protection. The insured has to prove that the loss or damage is caused by casualty, since ''risk'' implies uncertainty. Under (B) and (C) clauses, the insurers are liable for the enumerated perils. Also, the 1982 ICC list a series of excluded perils that the underwriters will not be liable. The covered and uncovered risks will be analysed and commented from both sides of insurers and the insured one by one in detail. And the types of loss covered and different situations of duration of cover will be discussed very carefully. The MAR policy and 1982 ICC are contract terms. When the dispute is involved, the rule of construction and interpretation of terms is important. The English law and cases apply as the guideline to interpret the 1982 ICC. The 1982 ICC has widely been accepted by the markets and do protect the insured from loss or damage caused by the perils insured against. However, the protection is not completely real, since a lot of perils are excluded, and the burden of proof posed to the insured is not easy in practice. The insurers are in the relative powerful position in the contract of insurance. (Less)
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author
Huang, Zhaofang
supervisor
organization
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Maritime Law
language
English
id
1555360
date added to LUP
2010-03-08 15:23:28
date last changed
2010-03-08 15:23:28
@misc{1555360,
  abstract     = {Marine insurance is a contract of indemnity that the insurers protect the insured from the loss of damage caused by perils insured against, and the insured pays the premium. As the global center of marine insurance, the London market produces series of policy forms and attached standard forms widely used by the world. The currently used MAR policy form takes place of the old SG form, with the 1982 Institute Cargo Clauses (ICC) attached. This thesis will emphasis on comprehension and comments of the 1982 ICC. The subject-matter insured under the 1982 ICC is goods in the nature of merchandise, without the deck cargo and living animals covered. Whether the containers and packing materials are part of the goods will be decided in each particular case. There might be a combination of causes resulting the loss or damage. The underwriters are only liable for loss or damage proximately caused by the perils insured against. The proximate cause is the efficient and predominating peril. If two of more proximate causes are concluded, they have to be all covered by the insurance policy. The insurers will not be liable for loss or damage caused by any excluded proximate cause. The principle of proximate cause keeps the balance between the insurers and the insured. Under the 1982 ICC, some words are used from time to time to mean ''proximately caused by'', while the word ''attributable to'' refers to the more remote causes. For the loss or damage to be recovered, the insured has to have insurable interest to the cargo at time of loss. The insured needs to be interested in the cargo exposed to the marine risk, which has to be concluded under each particular international contracts of sale of goods. The ''lost or not lost'' clause is to permit the insured be recovered if he does not know he has bought the already lost goods. The insurable value of the subject-matter insured is agreed by and conclusive to the insurers and the insured under a valued policy. Excessive over-valuation is allowed without fraud involved. Under the unvalued policy the insurable value of the cargo is its prime cost plus fright and insurance cost. If the loss or damage is caused by collision, the owner of carrying vessel could refuse to pay by invoking the exemption clause under the Hague/Visby Rules. While if the non-carrying vessel is also blamed for the collision, the cargo interest could claim against its owner according to its degree of faults. And in United Stated, under the both to claim situation, the cargo owner could claim the full compensation from the owner of non-carrying vessel, who then could reclaim against the carrying vessel. ''The both to claim'' clause is to make the cargo interest reimburse the owner of carrying vessel after the latter compensates to the blamed non-carrying vessel. Under the 1982 (A) clauses all risks are covered under the insurance, which is for the insured's need for wider and better protection. The insured has to prove that the loss or damage is caused by casualty, since ''risk'' implies uncertainty. Under (B) and (C) clauses, the insurers are liable for the enumerated perils. Also, the 1982 ICC list a series of excluded perils that the underwriters will not be liable. The covered and uncovered risks will be analysed and commented from both sides of insurers and the insured one by one in detail. And the types of loss covered and different situations of duration of cover will be discussed very carefully. The MAR policy and 1982 ICC are contract terms. When the dispute is involved, the rule of construction and interpretation of terms is important. The English law and cases apply as the guideline to interpret the 1982 ICC. The 1982 ICC has widely been accepted by the markets and do protect the insured from loss or damage caused by the perils insured against. However, the protection is not completely real, since a lot of perils are excluded, and the burden of proof posed to the insured is not easy in practice. The insurers are in the relative powerful position in the contract of insurance.},
  author       = {Huang, Zhaofang},
  keyword      = {Maritime Law},
  language     = {eng},
  note         = {Student Paper},
  title        = {The 1982 Institute Cargo Clauses},
  year         = {2009},
}