MARINE

Marine Cargo Insurance provides insurance cover to goods during transportation by sea, road, or air, against loss,
damage, expenses and any liability incurred. With the growth of international trade and commerce there is an increase in
the movement of cargo over long distances by various modes of transit. Naturally, goods are exposed to various transit
hazards and TYIRC can provide cover for goods against various types of risks during the transit.

1. STANDARD POLICY WORDING:

Marine Cargo policy is normally comprised of policy schedule which shows the following:

1. Policy Number
2. Insured’s Name and Address.
3. Voyage of Goods (To & From)
4. Name of Vessel (If Available) or Truck Plate Number & Driver’s Name (in case of Land Transit) or
Carrying Company & Flight Number and date shipment affected (in case of air cargo).
5. Sum Insured.
6. Basis of Evaluation (C&F, FOB, Ex-Works etc..)
7. Type of cover granted (Institute Cargo Clauses A, B, C, Air or Land Transit)
8. Conditions, Clauses, warranties & Exclusions.
9. TYIRC’s Authorized signature.

2. CLAUSES:

Institute Cargo Clauses A, B, C & Air besides Land Transit Clause attached to Marine Cargo Policy denote cover
granted under this policy, risks covered, exclusions, duration, claims etc., these clauses are classified as
hereunder:

1. Institute Marine Cargo Clauses (A)

2. Institute Marine Cargo Clauses (B)

3. Institute Cargo Clauses ( C)

4. Institute Cargo Clauses (Air) - (excluding sendings by Post)

5. Land Transit Clause:

The risk covered by this policy vide this clause is that of loss or damage occasioned by fire, collision,
overturning, derailment, breaking down of bridges, or accidents of like nature whilst the interest insured
is being conveyed by motor, truck/rail.

The risk commences with the loading of each package or unit into the Truck/Wagon and ceases:
a) Immediately on the unloading of each package at destination or twenty-four hours after arrival
of the truck at final destination whichever first occurs.

b) Forty-Eight hours after the arrival of the train at destination or/on delivery by the Railway
Authorities whichever first occurs.

The risk or transshipment at junctions is included.

If any loss or damage as referred to above be recoverable from the Transport Company/Railway
Authorities under any contract of affreightment , whether waybill or any other contractual obligation, then
this insurance shall cover the interest insured only as regards any excess beyond the amount of
compensation payable by the Transport Company/Railway Authorities.

WARRANTED IN THE EVENT OF ANY OCCURRENCE LIKELY TO RESULT IN A CLAIM DUE TO AN

ACCIDENT TO THE ON-CARRYING TRUCK-TRAIN A SURVEY SHOULD BE HELD BY A
COMPETENT SURVEYOR AND A CERTIFICATE OBTAINED FROM THE COMPETENT
AUTHORITIES NEAREST TO THE PLACE OF ACCIDENT.

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 Other Clauses Attached to Marine Cargo Policy:

1- Institute Classification Clause (01.01.2001)

2- Institute War Clauses (Cargo)

3- Institute War Clauses (Air Cargo) – (Excluding Sending by Post)

4- Institute War Clauses (Sending By Post)

5- Institute Strikes Clauses (Cargo)

6- Institute Strikes Clauses (Air)

7- Institute Strikes Clauses (Frozen Meat) – (Not suitable for chilled, cooled or fresh meat

8- Institute War Cancellation Clause (Cargo)

9- Institute Radioactive Contamination Exclusion Clause

10- Cargo ISM Endorsement (JC 98/019):

Notwithstanding anything contained to the contrary, this endorsement is hereby deemed to be

incorporated to the Institute Cargo Clauses and to be applicable with effect from 1 st July 2002 to
shipments on board, all on-carrying ships and mobile offshore drilling units of 500 gross tonnage or
more.

In no case shall this insurance cover loss, damage or expense where the subject matter insured is
carried by a vessel that is not ISM code certified or whose owners or operators do not hold an ISM Code
Document of Compliance, when at the time of loading of the subject matter insured on board the vessel,
the Assured were aware, or in the ordinary course of business should have been aware.

a) Either that such vessel was not certified in accordance with the ISM Code.
b) Or that current Document of Compliance was not held by owners or
Operators.

As required under the SOLAS Convention 1974 as amended.

This extension shall not apply where this insurance has been assigned to the party claiming hereunder
or the Assured(s) herein who has bought or agreed to buy the subject matter insured in good faith under
a binding contract.

All other terms and conditions remain unaltered.

11- Exclusion of War, Civil War and Terrorism:

This Contract shall not apply to any loss, damage, cost or expense of whatsoever nature directly or
indirectly caused by, resulting from or in connection with:

- War, invasion, act of foreign enemy, hostilities or warlike operations

(whether war be de-cleared or not).
- Civil war, military rising, insurrection, rebellion, revolution, military or usurped power,
martial law or looting or pillaging in connection therewith.

- Confiscation or nationalization or requisition or destruction of or damage to property by or

under the order of any government or public authority or any act or condition incident to
any of the above.
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 “Terrorism Exclusion”

Notwithstanding any provision to the contrary within this Contract or any endorsement thereto it is
agreed that this reinsurance excludes loss, damage, cost or expense of whatsoever nature directly or
indirectly caused by, resulting from or in connection with any act of terrorism regardless of any other
cause or event contributing concurrently or in any other sequence to the loss.

For the purpose of this exclusion an act of terrorism means an act whether involving violence or the use
of force or not -or the threat or the preparation thereof, of any person or group(s) of persons-whether
acting alone or on behalf of or in connection with any organization(s) or government(s) - which

- appears to be intended to
- intimidate or influence a de iure or de facto government or the public or a section of the
public, or
- disrupt any segment of the economy
or
- From its nature or context is done in connection with political, social, religious, ideological
or similar causes or objectives.

This endorsement also excludes loss, damage, cost or expense of whatsoever nature directly or
indirectly caused by, resulting from or in connection with any action taken in controlling, preventing,
suppressing or in any way relating to any act of terrorism.

If the Reinsurers allege that by reason of this exclusion, any loss , damage, cost or expense is not
covered by this reinsurance the burden of proving the contrary shall be upon the Reassured.

In the event any portion of this endorsement is found to be invalid or unenforceable, the remainder shall
remain in full force and effect.

12- Rust, Oxidization and Discoloration Clause:

It is a warranty of this insurance that any loss of or damage to the subject matter insured due to rust,
oxidization and/or discoloration shall be expressly excluded from the cover granted under this policy.

13- Cutting Clause:

In the event of breakage occurring, the Assured agree that broken ends shall be cut off and credit be
given for any part that can be used.

14- Institute Chemical, Biological, Bio-Chemical, Electromagnetic Weapons and Cyber Attack
Exclusion Clause (CL365 1st November 2002)

15- Institute Extended Radioactive Contamination Exclusion Clause (CL.356a1 st November 2002)

16- Institute Frozen Meat Clauses (A) – 24 Hours Breakdown (not suitable for chilled, cooled or fresh
meat)

17- Institute Frozen Food Clauses (C), (Excluding Frozen Meat)

18- Institute Frozen Food Clauses (A), (Excluding Frozen Meat)

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3. PROPOSAL FORM: As hereunder:

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4. WRITTEN GUIDELINES:

4.1 SUMMARY OF COVER:

 Institute Cargo Clauses (A):

All Risks of loss of or damage to the subject matter except as provided in Clauses 4, 5, 6 & 7
of this cover.

 Institute Cargo Clause (B):

This insurance covers, except as provided in Clauses 4, 5, 6 & 7 of this cover:
- Fire or Explosion.
- Stranding, Grounding, Sinking or Capsizing.
- Overturning or Derailment of land conveyance.
- Collision or contact of vessel, craft or conveyance with any external object other than
water.
- Discharge of Cargo at a port of distress.
- Earthquake, volcanic eruption or lightning.
- General Average Sacrifice.
- Jettison or washing overboard.
- Entry of sea, lake or river water into vessel, craft, hold conveyance, lift-van or place of
storage.
- Total Loss of any package lost overboard or dropped whilst loading on to, or
unloading from vessel or craft.
- General Average and salvage charges.
- Liability under the contract of affreightment.

 Institute Cargo Clauses (C ):

This insurance covers, except as provided in Clauses 4, 5, 6 & 7 of this cover:

- Fire or Explosion.
- Stranding, Grounding, Sinking or Capsizing.
- Overturning or Derailment of land conveyance.
- Collision or contact of vessel, craft or conveyance with any external object other than
water.
- Discharge of Cargo at a port of distress.
- General Average Sacrifice.
- Jettison or washing overboard.
- General Average and salvage charges.
- Liability under the contract of affreightment.

 Institute Cargo Clauses (Air) – (Excluding sendings by Post):

This insurance covers all risks of loss of or damage to the subject matter insured except as
provided in Clauses 2, 3 & 4 of this cover.

Land Transit Clause:

This insurance covers loss of or damage to subject matter insured occasioned by:
- Fire.
- Collision.
- Overturning and/or derailment of Truck and/or rail, breaking down of bridges, or
accidents of like nature.

The following Table summarizes Perils Covered under each clause:

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 CLAUSES
PERILS COVERED
A B C
1- Fire or Explosion X X X
2- Strand, Ground, Sunk or Capsized X X X
3- Overturning or Derailment X X X
4- Collision or Contact X X X
5- Discharge of Cargo at port of distress X X X
6- Jettison X X X
7- General Average Sacrifice X X X
8- Cost of salvaging vessel and cargoes X X X
9- Reforwarding Charges X X X
10- Earthquake, Volcanic eruption, lightning X X NIL
11- Washing overboard X X NIL
12- Entry of sea, lake, river water into hold, craft, container or place of storage X X NIL
13- Total loss of any entire package whilst loading or unloading or X X NIL
transshipment
14 Loss or damage directly resulting from external and unpredictable cause of X NIL NIL
loss

4.2 MAIN EXCLUSIONS:

General Exclusions:

- Willful misconduct of the Assured.

- Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject
matter insured.
- Insufficiency or unsuitability of packing.
- Inherent vice or nature of the subject matter insured.
- Delay.
- Insolvency or Financial default of the owners, managers, charterers or operators of the vessel.
- Claims based on loss of or frustration of the voyage or adventure.
Unseaworthiness and Unfitness Exclusion (Applicable to ICC (A), (B) & (C) Covers:

In no case shall this insurance cover loss, Damage of Expense arising from:
- Unseaworthiness of vessel or craft.
- Unfitness of vessel, craft, conveyance, container or lift-van.

War Exclusion:

In no case shall this insurance cover loss, damage or expense caused by:

- War civil war revolution rebellion insurrection, or civil strife arising there from, or any hostile
act by or against a belligerent power.
- Capture seizure arrest restraint or detainment (piracy excepted), and the consequences
thereof or any attempt thereat
- Derelict mines torpedoes bombs or other derelict weapons of war.

Strikes Exclusion:

In no case shall this insurance cover loss, damage or expense:

- Caused by strikers, locked-out workmen, or persons taking part in labor disturbances, riots or
civil commotions
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 - Resulting from strikes, lock-outs, labor disturbances, riots or civil commotions

- Caused by any terrorist or any person acting from a political motive.

The following Table summarizes Perils excluded under each Clause:

CLAUSES
PERILS EXCLUDED A B C
1- Willful Misconduct of the Assure X X X
2- Ordinary: Leakage, loss in weight or volume, wear and tear X X X
3- Insufficient packing, Stowage or Processing X X X
4- Inherent Vice or Nature of Goods X X X
5- Subsequent shipment delay, even though loss or damage is directly X X X
caused by perils covered
6- Insolvency or Financial Default of the owners, managers, charterers or X X X
operators of the vessel
7- Deliberate damage or destruction by the wrongful act of any person or X X
persons
8- The use of any weapon of war employing atomic or nuclear fission/fussion X X X
or other like reaction or radioactive force
9- Unseaworthiness & Unfitness of the Vessel or Craft X X X
10- War X X X

11- Strikes, Riots or Civil Commotion X X X

4.3 UNDERWRITING FACTORS AND RISK ASSESSMENT:

Underwriting Information needed to apply insurance:

 Name of Assured
 Description of Goods
 Invoice Value
 Voyage
 Coverage
 Vessel’s Name
 Sailing Date
 No. of Package
 Condition of L/C

Influential Factors on Insurance Rating:

 Commodity:

Description of goods in details is very critical of underwriting consideration process in whether

the proposed risk is accepted or rejected. Insurance rating for “Hazardous Products” or
“Fragile Goods” or “Any goods volatile to leakage, evaporation, and breakage” is rather higher
than any other types of general cargoes.

 Packing:

The type of package is another factor to determine insurance rating. The characteristic of the
Container such as strength and safety used to contain any type of goods is the vital points to
be considered as “Sufficiency of Packing”, which is in its sense, is to be suitably compatible

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 with each type of products it carries. Again we can see some types of goods packed in “Loose
Packaging” are quite high.

 Voyage:

The risk of length of voyage is brought up to be an important factor to determine insurance

rating. The multiple mode of transportation such as transshipment within the normal transit,
would give rise to the increasing exposure of loss or damage to goods. Logically, more time
consumed it is, the higher rating it tends to be.

 Port Condition

Whether it is the port of discharge or port of destination or not, the general condition at the port
such as well-equipped lifting facility with computerization system in port, well-locked and well-
guarded port’s warehouse, or even the outdoor exposure of container yard or container freight
station is another important issue to contribute the insurance rating.

 Ocean Vessel:

The word “Overage Surcharge” is widely used among Marine Underwriters. The overage
surcharges for Ocean Marine Insurance on cargoes carried by Overage Vessel are computed
and tabulated in specific tables, which most Marine Cargo Insurers apply.

 Loss Experience:

The report of loss experience within the past 3-5 years is taken into consideration, and is
another important issue for insurance rating.

 Coverage:

The insurance rating is dependant to the choice of the terms and conditions covered for the
cargoes in which the Insured has made. The foregoing tables of risks covered and excluded
are of great guide.

 Estimated Annual Turnover:

The frequency of shipments in each month or year made by Insured is an indispensable point
to be taken into account of underwriting consideration to determine the competitive insurance
rating. The more frequent it is, the lower rating the Insured enjoys.

4.4 BASIS OF ASSESSMENT OF SUM INSURED:

One of the important information needed for underwriting purposes to apply insurance is the sum
insured (value of goods). It is either provided in the goods invoice or the Letter of Credit. In all cases,
the basis of evaluation is declared (C&F, FOB, and Ex-Works etc).

4.5 RATING AND PREMIUM EVALUATION:

As we have previously discussed “how insurance premium is marked up” under the heading Influential
Factors on Insurance Rating, the Assured is required to submit all relevant information about the
shipment accurately so that we can render the full coverage protection with the reasonable and
competitive price. Hereunder is a Table of indicative Premium rates:

DESCRIPTION OF GOODS PREMIUM RATE (%)

ICC (A) ICC(C)
1. Industrial Goods
Steel (pipes, sheets, wires, etc.) o.35% 0.125%
Aluminum sheets, bars & profiles 0.4% 0.125%

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 Industrial equipment (generators, trucks, A/C plants, cables etc.) 0.35% 0.125%
Automobile spare parts & tyres. 0.35% 0.125%
Domestic Appliances 0.35-0.5% 0.125%
Computers:
Hardware 0.5% 0.125%
Software 0.4% 0.125%
Paints 0.45% 0.125%
Manufacturing Products 0.5% 0.15%
Cement
In bulk: 0.8% 0.18%
In bags: 0.9% 0.18%
Ceramic & wall tiles. 1.5% 0.20%
Fragile Items 1.0% .15%
Electrical & Electronic appliances 0.35 – 0.75% 0.125%
2. Agricultural Goods
Fertilizers (bags/drums) 0.35% 0.125%
Toxicants 0.35% 0.125%
Agricultural equipment 0.35% 0.125%
Agricultural Chemical Products 0.45% 0.125%
Seeds 0.35% 0.125%
3. Furniture
Wooden furniture 0.3% 0.125%
Steel furniture 0.3% 0.125%
Carpets & rugs 0.4% 0.125%
kitchens 0.4% 0.125%
Dining tables, chairs, bedrooms, sofas, etc 0.35% 0.125%
Timber 0.4% 0.125%
4. Foodstuffs
Fruits & Vegetables 1.0% 0.15%
Canned foods 0.45% 0.125%
Frozen food & frozen meat 1.25% 0.125%
Flour, corn, Soya, wheat, cereals etc. 0.55% 0.125%
Sugar 0.6% 0.125%

4.6 AUTHORITY LIMITS:

- The General Manager to sign Marine Cargo Policies up to Treaty Limit ($5,000,000.- for 100%
limit in respect of each and every risk underwritten / accepted in the Marine Cargo
Department). In excess of this limit, Amman Regional Office should be referred to.
- Head of Technical Department to sign Marine Cargo Policies up to the limit of Yemeni Rials
50,000,000.- (equivalent to US$ 270,000.-)
- Refer to Amman Regional Office in respect of Facultative Reinsurance Acceptances
exceeding US$250,000. - Anyone risk.

4.7 REINSURANCE PROTECTION:

A- Type of Treaty: Marine Cargo Quota Share

Interest: Business underwritten / accepted in the Marine

Cargo Department.

Limits: To take 70% Quota Share up to Maximum

US$5,000,000.- for 100% limit in respect of each
and every risk underwritten / accepted.
Company’s Retention 30% each & every Risk.

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 Conditions: Terms, Clauses and Conditions as original.

Excluded Risks:
- Obligatory Reinsurance and / or Retrocession Treaties..
- Radioactive Exclusion Clause (Reinsurance) – CL356
- Institute Extended Radioactive Contamination Exclusion Clause (CL356)
- Institute Chemical, Biological, Bio-Chemical, Electromagnetic Weapons and Cyber
Attack Exclusion Clause (CL356).
- Cargo Termination of Storage in Transit Clause.

B- Type of Treaty: Marine Cargo Excess of Loss

Interest Same as (1) above.

Limits: - Layer 1:
US$225,000 or the currency equivalent anyone accident or occurrence
or series of accidents or occurrences arising out of one event.
Excess of: US$75,000 or the currency equivalent anyone accident or
occurrence or series of accidents or occurrences arising out of one
event.
- Layer 2:
US$1,200,000
Excess of: US$300,000
- Layer 3:
US$3,000,000
Excess of: US$1,500,000
Conditions: Terms, Clauses and Conditions as original.

Excluded Risks:
- Obligatory reinsurance
- Excess of loss insurance and reinsurance other than facultative or on reporting XL
basis
- Pools and pooling arrangements
- Terrorism Exclusion Clause amending the termination of transit in relation to terrorism
as per the London Joint Cargo Committee Termination of Transit Clause (Terrorism)
JC2001/056.
- War & Strikes Notice of Cancellation (Reinsurance(Automatic Termination of Cover
and Five Powers War and Nuclear Exclusion Clause – ILU Clause 359 – amended
GCR version.
- Institute Chemical, Biological, Bio-chemical, Electromagnetic Weapons and Cyber
Attack Exclusion Clause CL 365.
- Information Technology Hazards Exclusion – Joint Excess of Loss Committee
Information Technology Hazards Clause 16/11/01 XL 2001/003.
- Nuclear Energy Risks Exclusion Clause (Marine) (1/1/1989)
- Institutes Radioactive Contamination Exclusion Clause 1/1/1990)
- Liability Exclusion Clause “B” (1/12/1990)
- Aviation/airport business of any type other than air cargo
- Seepage and Pollution Exclusion Clause (1/1/1989)
- Political Risk, Financial Guarantee and Credit Risk Exclusion Clause.
- Confiscation and rejection risks
- Container hull
- Warehouse or storage risks unless incidental or ancillary to marine risks reinsured
under this contract
- Consequential losses and loss of profit
- Livestock and bloodstock
- Stock throughput
- 48 Hours Windstorm Clause / 72 Hours Earthquake Clause

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 - War Inclusion Clause (1976)
- Interlocking Clause

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