D
DECK CARGO
Cargo carried outside rather than within enclosed cargo spaces
of a vessel and usually insured for FPA conditions only.
DECLARATION
Form filled out by the assured and sent to the insurance company
when reporting individual shipments coming within the terms
of an open policy. Usually used for declaring import shipments
where evidence of insurance is not required.
DEVIATION
A vessel going to some other point or taking some course other
than that described in the Bill of Lading.
DUE DILIGENCE
Proper care and attention on the part of a vessel owner to
the maintenance and welfare of the vessel and crew.
DUTY
A government's tax levied on imports. For example, in the
U.S., duties collected by U.S. Customs Service.
E
EXCEPTIONS
Notations made on a delivery receipt by the person (or company)
receiving a shipment, or made on the bill of lading by the
carrier regarding damage or variance in the shipment.
F
F.A.S.
Free Alongside Steamer (see Terms of Sale)
F.C. & S.
Free of Capture & Seizure
FPA
Free of Particular Average
FREE OF PARTICULAR AVERAGE, AMERICAN CONDITIONS (FPAAC)
Average clause that limits recovery of partial losses under
the Perils clause to those losses directly resulting from
fire, stranding, sinking or collision of the vessel.
FREE OF PARTICULAR AVERAGE, ENGLISH CONDITIONS (FPAEC)
Same as FPAAC except that partial losses under the Perils
clause are fully recoverable if the vessel has been stranded,
sunk, burnt, been on fire or in collision, without requiring
that the damage actually be caused by one of these perils.
G
GENERAL AVERAGE
Loss resulting from a voluntary sacrifice of any part of the
vessel or cargo, or an expenditure to safeguard the vessel
and the rest of the cargo. When such a loss occurs, it is
paid on a pro-rata basis by the ship owner and all cargo owners.
I
INCHMAREE CLAUSE
Covers losses resulting from a latent defect in the vessel's
hull or machinery and losses resulting from errors in navigation
of the vessel by the master or crew; as long as the damage
does not result from want of due diligence by the vessel owner.
INDEMNITY
Repayment or reimbursement for loss or damage.
INHERENT VICE
A loss caused by the inherent nature of the cargo insured
and not the result of a casualty or external cause.
INVOICE
Document which shows the terms of sale; contains full descriptions
of goods, sale price, charges, discounts, etc.
INSURED VALUE
Usually computed by adding the invoice cost, guaranteed freight,
other costs and insurance premium plus a percentage, commonly
10%. This usually represents landed value.
J
JETTISON
Voluntary dumping overboard of either cargo or ship's material
or stores, to protect other property from a common danger.
L
LANDED VALUE
Wholesale market value at destination on final day of discharge.
LIGHTER
A large, open flat-bottomed barge used in unloading and loading
ships wherever shallow water prevents the ships from coming
into the shore.
LOSS OF MARKET
Situation in which, for one reason or another, sound cargo
is no longer wanted by the consignee when it arrives. This
is known as a "business loss" and is not recoverable
under a marine cargo policy; e.g. Christmas tress arriving
in January damaged.
M
MARINE EXTENSION CLAUSE
Cargo policy clause that continues coverage on goods during
deviation, delay, reshipment and transshipment, or any other
variation in normal transit beyond the assured' s control.
MARINE SURVEYOR
Specialist who determines the nature, extent and cause of
loss and/or damage.
MASTER'S PROTEST
Sworn statement by captain describing any unusual happening
during the voyage.
O
ON-DECK CARGO
Cargo carried on the main deck of the vessel, or other spaces
above the main deck; is susceptible to damage by wind, sea
water and being washed overboard.
P
PALLET
A low portable platform, usually wooden, on which cargo is
stacked for storage or transportation; a skid.
PARTICULAR AVERAGE
Partial loss sustained by goods insured.
PERILS OF THE SEA
Stranding, sinking, collision and hazards from natural forces
in or about navigable waters (windstorm, rough weather, etc.,
but not fire explosion, etc., which are perils on the sea).
PILFERAGE
The theft of part of the contents of a shipping package.
R
RO-RO
Roll-on-Roll-off; A specially constructed vessel having a
ramp on the top which can be raised to a vertical position
and lowered to permit trucks and trailers to load under their
own power.
S
S.R. & C.C.
Strikes Riots & Civil Commotion
SALVOR
A third party who saves or assists in the saving of a vessel
or property from loss at sea.
STRANDING
The grounding of the vessel, causing it to remain fast for
an appreciable length of time.
SUBROGATION
The operation by which the insurance company (on payment of
a claim) assumes all of the assured' s rights to recovery
from any third parties; substitution of one creditor for another.
T
TERMS OF SALE
The following are brief descriptions of the more common Terms
of Sale (fully defined in the Guide to Incoterms), setting
forth the obligations of the seller and buyer.
FREE ON BOARD (FOB) - The seller assumes charges and risk
for the goods until they are loaded on board a named carrier
at a named point, which may be an inland point or a port.
The buyer is responsible for any loss or damages after loading
on board the carrier. The buyer should specify FOB to control
insurance without relying on the seller.
FREE ALONGSIDE (FAS) - The seller assumes charges and risk
until the goods are delivered alongside the vessel. Loss or
damage from alongside the vessel is the responsibility of
the buyer.
COST AND FREIGHT (C & F) - The seller assumes responsibility
for the charges and for loss or damage until the goods enter
the carrier's custody or are loaded on board the vessel. The
buyer is responsible for loss or damage at this point.
COST INSURANCE AND FREIGHT (CIF) - The seller's price includes
cost of the goods, marine insurance and all transportation
charges to the named destination point.
TERMS OR METHODS OF PAYMENT
If the insured is not paid for any reason, he/she must dispose
of the goods. Therefore he/she still has an insurable interest.
Following are the more common terms or methods of payment:
COLLECTION BY DRAFT - The seller bears the risk until he
is paid. If for some reason, the buyer does not accept the
shipment, the seller has to dispose of the goods. By arranging
the insurance, the seller can minimize the risk of loss.
OPEN ACCOUNT - When sales are made on account, the seller
has financial risk similar to collecting by draft. Here again,
the seller should attempt to arrange the insurance.
LETTER OF CREDIT - In this procedure, the buyer establishes
credit in U.S. money through his or her bank in favor of the
seller. If the seller collects by this means, the letter of
credit often stipulates that he/she arrange the insurance.
TRANSSHIPMENT
To transfer from one ship or conveyance to another for further
transit.
v
VALUATION CLAUSE
Provides basis for determining insured value of a shipment
under the open cargo policy.
w
WAR RISK
Insurance against loss or damage to property as a result of
war risks (separate policy).
WAREHOUSE TO WAREHOUSE
An export/import policy clause that provides protection from
the shipper's warehouse and during ordinary course of transit
to the consignee's warehouse.
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