Insuring Cargoes - A Practical Guide to the Law and Practice 2023, 2nd Edition

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This is a comprehensive guide to underwriting and claims practices, written with incredible depth and insight by a practitioner with over 40 years’ experience in different markets. It discusses the basic concepts of marine cargo insurance, the impact of the Insurance Act 2015, developing case laws, Institute and trade clauses, non-Institute clauses, rejection risks, the need for careful wording of policy terms, adjustment of claims, etc.

This 527-page book on cargo insurance contains an exhaustive commentary on the current Institute and trade clauses, important case laws, the Insurance Act 2015, Incoterms Rules 2020, insurable interest and the need for reforms, contingency covers and possible gaps in coverage, a critical look at open covers, etc.

There are two chapters on claims, including proximate/concurrent causes, burden of proof, treatment of rate of exchange fluctuation, higher cost of repairs by OEM, reinstatement of manufacturers’ warranty, TPND, piracy, replacement clauses, etc.

Insuring Cargoes becomes the only book to devote complete chapters to rejection risks, contract certainty, delay and inherent vice, non-Institute (broker) clauses, physical versus non-physical losses, and recoveries. A very detailed list of documents for partial and total loss claims involving general/dry bulk/liquid bulk is another useful addition to the second edition.

The book offers a practical insight into marine cargo insurance and introduces new ideas and concepts, all of which will go a long way in issuing policies free of ambiguities and ensuring fair outcomes in the case of claims. Every concept is well illustrated with practical examples.


Much has changed in marine insurance law since the publication of the first edition of this book in 2010. Not least, the English Insurance Act 2015 has come into force and there have been important English Supreme Court decisions in the ‘Cendor MOPU’ and Versloot Dredging. This considerably expanded second edition addresses those various changes and their impact on cargo insurance in a clear and balanced way. In particular, the author (Vish) gives valuable practical insights into how the Act might apply using helpful concrete examples such as in his treatment of the various policy warranties that regularly occur in practice.

The author brings a wealth of practical industry experience to bear more generally, experience acquired on both the underwriting and claims adjusting side. We see this in the new chapter on non-Institute clauses. Whilst policies may take as their starting point the Institute Cargo Clauses (A) 1/1/2009 or other standard clauses, one often sees a plethora of so called bespoke or manuscript clauses in many policies. The author explores their commercial rationale, the variations in wording that exist and the practical application of those clauses whilst highlighting the issues they throw up.

Other new chapters including on rejection risk, a subject barely touched upon in other textbooks, are welcomed as is the chapter on cargo recoveries by my colleague Jai Sharma.

The author does not shirk from tackling problematic areas. There is detailed discussion on inherent vice and on delay, two issues that often trouble the practitioner. There may be no settled answer to these issues but the author is not afraid to enter the debate, eg in discussing the ‘Cendor MOPU’ judgment at length. Both here and elsewhere he extends beyond an in depth commentary on English law principles and case law to include extensive and valuable consideration of case law further afield, particularly US case law, drawing distinctions between the English approach and other approaches.

The author’s experience shows in other areas. There is a stimulating discussion about the traditional requirement that there be physical loss or damage for an insured to have a recoverable claim under a policy. He discusses how that applies in the case of fear of loss to high value pharmaceutical products and the tension that exists between traditional concepts and an insured’s commercial needs. We also see this in the discussion of physical loss and damage in the context of manufacturer’s warranties and guaranteed outturn clauses. The author writes on these issues in a stimulating and authoritative manner.

In short, this edition will be of great use to practitioners as a complement to more academic texts. It is commended to any reader interested in marine cargo insurance.

Mike Roderick

Partner, Clyde & Co

About the Author

Foreword to the 1st Edition

Foreword to the 2nd Edition

Preface to the 2nd Edition


Case Law List

1. Introduction to International Trade and Cargo Insurance

1.1 Cargo Families

1.2 Dangerous Goods

1.3 Ships and their Classification

1.4 Flag of Convenience (FOC)

1.5 Classification

1.6 Chartered Ships

1.7 Protection and Indemnity Clubs

1.8 The ISM Code

1.9 The ISPS Code

1.10 Ship Selection

1.11 The Container Revolution

1.12 Mechanism of Containerisation

1.13 Verified Gross Mass (VGM)

1.14 Impact on Marine Insurance

1.15 Financing of International Trade

1.16 Cargo Insurance and International Trade

1.17 Responsibility to Arrange Cargo Insurance

1.18 Insurance

1.19 Impediments to Trade

1.20 What is Marine Cargo Insurance?

1.21 Marine Cargo Insurance Contract

1.22 The Marine Cargo Policy

1.23 Principles Governing Marine Cargo Insurance

1.24 Utmost Good Faith

1.25 Duty of Disclosure, S.18

1.26 Voidable Nature of Contract, S.18(1)

1.27 Pre-Contractual Duty, S.18(1)

1.28 Continuing Duty (Post Contractual)

1.29 Materiality and Inducement, S.18(2)

1.30 Exceptions to the Duty of Disclosure, S.18(3)

1.31 Disclosure by Agent Effecting Insurance, S.19

1.32 Representations Pending Negotiation of Contract

1.33 Criticisms of the Law of Good Faith

1.34 The Insurance Act 2015

1.35 Duty of Fair Representation

1.36 Impact of the Insurance Act 2015

1.37 Proportional Remedies

1.38 Preparation Needed Under the IA 2015 Regime

1.39 Fraud and the Duty of Good Faith

1.40 Indemnity

1.41 Agreed Value – A Detailed Discussion

1.42 Insurable Interest

1.43 Subrogation

1.44 Contribution

1.45 Common Liability Method

1.46 Independent Liability Method

1.47 Maximum Liability Method

1.48 Warranties

1.49 Types of Warranties

1.50 Examples of Express Warranties in Cargo Insurance

1.51 The Literal Performance/Strict Compliance Rule under the MIA 1906

1.52 The Position under the Insurance Act 2015

1.53 Burden of Proof

1.54 Contracting Out

2. Insurable Interest 1

2.1 Introduction

2.2 Insurable Interest Defined

2.3 Legal or Equitable Relationship

2.4 Prejudiced by Loss … Benefit by Safety

2.5 Supreme Court of Canada’s View on Macaura

2.6 Supreme Court of Canada’s View on Broadgrain Commodities

2.7 Insurable Interests in Cargo

2.8 International Trade under Contracts of Sale

2.9 Risk v Title Dichotomy

2.10 Timing of Insurable Interest

2.11 Lost or Not Lost

2.12 Assignment of Policy and Interest

2.13 Interplay of Various Sections of the MIA 1906

2.14 Insurable Interest of a Buyer

2.15 Insurable Interest of the CIF Seller

2.16 Concluding Remarks

3. Insurable Interest 2 – Contingency Covers

3.1 Seller’s Interest

3.2 Reasons for Rejection of Documents/Goods

3.3 Key Features of Seller’s Interest Cover

3.4 Additional Clauses in Seller’s Interest

3.5 Contingency Cover for CIF/CIP Seller

3.6 Buyer’s Interest

3.6.1 Stage of Transit

3.6.2 CIF Purchases

3.6.3 Tail-end Risks

3.6.4 Difference in Conditions (DIC)/Difference in Limits (DIL) Extensions

3.7 Achieving Seamless Covers Irrespective of Terms of Sale

3.8 Guarantee of Collectability

4. Marine Open Cover

4.1 What is an Open Cover?

4.2 Advantages

4.3 Assured

4.4 Period

4.5 Cancellation Clause

4.6 Interest Insured

4.7 Treatment of Packing Materials

4.8 Conveyances

4.9 Use of Own Vehicles

4.10 Voyage/Geographical Limits

4.11 Basis of Valuation

4.12 Limits of Liability

4.13 Per Bottom Limit

4.14 Location Limit

4.15 Meaning of Location

4.16 Accumulation at Ports of Loading and Discharge

4.17 Location Limit and Overseas Buyers

4.18 Limits and Co-Assureds

4.19 Limits of Liability and Condition of Average

4.20 Limit Per Location and Freight Forwarders

4.21 Accumulation Clause

4.22 Terms of Cover

4.23 Declaration (Bordereau)

4.24 Late Declaration or Omission to Declare

4.25 Certificate of Insurance

4.26 Hold Harmless Clause

4.27 Web-based Certificate Generation (E-Marine)

4.28 Certificate Versus Open Cover Terms

4.29 Nature of Open Cover Contract ‘for’ or Contract ‘of ’ Insurance

4.30 Certificate Issued for Individual Export Voyage

4.31 Words of Incorporation in the Certificate

4.32 Certificate Mentioning the Open Cover Number

4.33 Certificate Mentioning ‘All Other Terms as Per Open Cover’

4.34 Certificate Mentioning Entities ‘for Whom the Assured has Instruction to Insure’

4.35 Rights of an Unpaid Seller

4.36 Conclusion

4.37 Annual Sales Turnover Policies

4.38 Annual Sales Turnover Policies – A Critique

4.39 Cargo (Stock) Throughput Policies

4.40 Advantages of Stock Throughput Policies

4.41 Illustrations of a Stock Throughput Policy

4.42 Challenges in Administering Stock Throughput Covers

4.43 Process Clause in Stock Throughput Covers

4.44 Standard Exclusions in a Stock Throughput Policy

5. Insuring Terms 1 – Institute Classification Clause

5.1 Main Provisions

5.2 Age Limitation

5.3 Non-qualifying Vessels

5.4 Summary

5.5 Transhipping Vessels

5.6 Craft

5.7 Classification Clause

5.8 SOLAS 1974

5.9 The International Safety Management (ISM) Code

5.9.1 ISM Code and Marine Insurance

5.10 ISM Forwarding Charges

5.10.1 Compliance with the ISM Code

5.11 Summary and Concluding Remarks

5.12 ISM and Classification

5.13 The International Ship and Port Facility Security (ISPS) Code

5.13.1 ISPS Endorsements

5.13.2 ISPS – Implications for Cargo Assureds

6. Insuring Terms 2 – Institute Cargo Clauses (A), CL.382, 01.01.09

6.1 Background to Changes

6.2 General Changes

6.3 Major Changes

6.4 Perils Clause

6.4.1 All Risks

6.4.2 General Average

6.4.3 Both to Blame Collision Claus

6.5 Exclusions

6.5.1 Wilful Misconduct

6.5.2 Ordinary Losses

6.5.3 Poor Packaging

6.5.4 Inherent Vice

6.5.5 Delay

6.5.6 Insolvency

6.5.7 Nuclear or Radioactive Devices

6.5.8 Unseaworthiness

6.5.9 Hostile Acts

6.5.10 Strikes

6.6 Duration of Cover – 1

6.6.1 Background to Duration Clause, 2009 Edition

6.7 The Duration Clause in ICC 2009

6.7.1 Attachment

6.7.2 Ordinary Course of Transit

6.7.3 Termination

6.8 Duration Clause Scenarios

6.8.1 Attachment of Cover Scenarios

6.8.2 Continuation Scenario

6.8.3 Termination Scenarios

6.9 Other Markets

6.10 Duration of Cover – 2

6.10.1 Additional Premium under Clause 9

6.10.2 Can the Insurer Deny Extension of Cover Upon Receiving Notice under Clause 9?

6.11 Change of Voyage

6.11.1 Clause 10.2 – the Phantom Ship

6.12 Claims

6.13 Forwarding Charges

6.13.1 Clause 12 – a ‘Supplementary Contract’?

6.14 Constructive Total Loss

6.15 Increased Value

6.16 Benefit of Insurance

6.17 Minimising Losses

6.18 Waiver

6.19 Avoidance of Delay

6.20 Law and Practice

6.21 Note

6.22 Premium to be Arranged – is there an Upper Limit?

7. Inherent Vice and Delay Exclusions

7.1 Inherent Vice

7.2 Meaning of Inherent Vice

7.3 Examples of Inherent Vice

7.4 Mechanism of Condensation

7.5 Leading Case Law on Inherent Vice

7.5.1 E D Sassoon & Co Ltd v Yorkshire Insurance Co (1923)

7.5.2 C T Bowring & Co Ltd v Amsterdam London Insurance Co Ltd (1930)

7.5.3 Soya GmbH Mainz Kommanditgesellschaft v White (1983)

7.5.4 Noten BV v Harding (1990)

7.5.5 Mayban General Insurance BHD v Alstom Power Plants Ltd (2004)

7.5.6 Nelson Marketing International Inc v Royal and Sun Alliance Insurance Co of

Canada (2005)

7.5.7 Feuiltault Solution Systems Inc v Zurich Canada (2021)

7.5.8 Global PROCESS Systems Inc and Another v Syarikat Takaful Malaysia Berhad

(the ‘Cendor MOPU’) (2011)

7.5.9 ACE European Group Ltd and Others v Chartis Insurance UK Ltd (2012)

7.6 Insuring Inherent Vice

7.7 Summary

7.8 Delay

7.9 Pre-MIA 1906 Cases

7.9.1 Taylor v Dunbar (1869)

7.9.2 Pink and Others v Fleming (1890)

7.10 Post-1906 Cases

7.10.1 Becker Gray & Co v London Assurance Corporation (the ‘Kattenturm’) (1918)

7.10.2 Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd (1918)

7.10.3 Yorkshire Dale Steamship Co Ltd v Minister of War Transport (the ‘Coxwold’) (1942)

7.11 The Delay Exclusion in ICC 1982/2009

7.12 Scenarios

7.13 FCA Test Case

8. Insuring Terms 3 – Named Perils

8.1 Institute Cargo Clauses (B) and (C)

8.2 (B) and (C) Causation Rules

8.3 (B) and (C) Perils: Subject to Reasonably Attributable to

8.3.1 Fire or Explosion

8.3.2 Stranded, Grounded, Sunk or Capsized

8.3.3 Overturning and Derailment of Land Conveyance

8.3.4 Collision or Contact

8.3.5 Discharge of Cargo at a Port of Distress

8.3.6 Earthquake, Volcanic Eruption or Lightning

8.4 (B) and (C) Perils: Subject to Caused by

8.4.1 General Average Sacrifice

8.4.2 Jettison or Washing Overboard

8.4.3 Entry of Water

8.4.4 Total Loss of Package

8.5 General Average

8.6 Exclusions

8.7 Institute Theft, Pilferage and/or Non-Delivery CL.272, 01.12.82

8.8 Theft, Pilferage and/or Non-delivery (TPND) and Piracy

9. Insuring Terms 4 – Trade Clauses

9.1 Institute Clauses for Bulk Oils – Part 1

9.2 Perils

9.3 Leakage from Connecting Pipelines

9.4 Underground Pipelines

9.5 Negligence during Pumping

9.6 Contamination from Stress of Weather

9.7 Exclusions

9.8 Duration

9.9 Movements by Craft and Barge Tankers

9.10 Delivery of Whole Consignment or Each Portion Thereof?

9.11 Adjustment Clause

9.11.1 Explanation

9.12 Readjustment of Claim

9.13 Contamination Claims – Need for All Risks Cover

9.14 Institute Clauses for Bulk Oils – Part 2

9.15 Institute Clauses for Bulk Oils – Part 3

9.16 Exclusions

9.17 JCC Storage Extension Clauses for Bulk Oils

9.18 Institute Coal Clauses: Clause No 393, 01.05.16

9.19 Heating and Spontaneous Combustion

9.20 Duration

9.21 Craft Risks

9.22 Barging Risks

9.23 Institute Timber Trade Clause No 405, 01.05.16

9.24 Piracy

9.25 Exclusions

9.26 Duration

10. Insuring Terms 5 – Cargoes Requiring a Controlled Environment

10.1 Types of Controlled Environment

10.2 Underwriting Considerations

10.3 Slow Steaming

10.4 Temperature Recording Devices

10.4.1 Ryan Recorder (Analogue Temperature Recorder)

10.4.2 Data Loggers

10.4.3 TempTale® (and Other Digital Temperature Recorders)

10.4.4 Sensors/Probes

10.4.5 Remote Sensing Systems

10.5 Institute/JCC Clauses for Frozen/Chilled Foods and Meat

10.6 Changes in 2017 Edition

10.7 Institute Clauses for Frozen Foods

10.8 Peril Clauses

10.8.1 Institute Frozen/Chilled Food Clauses (C), Clause No 431

10.8.2 Institute Frozen/Chilled Food Clauses (A), 24 Hours Breakdown, Clause No 423

10.8.3 Institute Frozen/Chilled Food Clauses (A), Clause No 430

10.9 Exclusions

10.9.1 Inherent Vice

10.9.2 Loss of Market

10.9.3 Refrigerated, Insulated and Cooled

10.9.4 Embargo, Rejection, etc

10.10 Duration Clause

10.11 Frozen Food Extension Clause, No 422

10.12 Frozen/Chilled Meat Extension Clauses, No 429

10.13 War and Strikes – Institute Strikes Clauses (Frozen/Chilled Food), No 424

10.14 Frozen/Chilled Meat

10.15 Perils

10.16 Exclusions

10.17 Duration

10.18 The Adjustment Clause

10.19 War and Strikes – Institute Strikes Clauses (Frozen/Chilled Meat), No 428

11. Insuring Terms 6 – Non-Institute Clauses

11.1 Introduction

11.2 Accumulation

11.3 Airfreight Replacement (Expediting Expenses)

11.4 Apportionment of Recoveries

11.5 Arrest

11.6 Art and Antiques (Depreciation)

11.7 Assured

11.8 Bagged Cargo Clause

11.9 Brand, Label and Trademark Protection

11.9.1 Labels Clause

11.9.2 Brands and Trademark Clause

11.10 Control of Damaged Goods

11.11 Claused Bill of Lading

11.12 Commingling

11.13 Concealed Damage (Delayed Discovery of Loss)

11.14 Containers

11.14.1 Container Fitness

11.14.2 Container Demurrage

11.14.3 Container Handover

11.14.4 Container Seals

11.15 Contingency

11.15.1 Incoterms® Rules Override Clause

11.15.2 Cover for Fob (or Similar Purchases)

11.15.3 Seller’s Interest Cover

11.15.4 Buyer’s Interest Cover

11.16 Continuation Clause

11.17 Country Damage

11.18 Cutting Clause

11.19 Debris Removal

11.20 Deck Cargo

11.21 Deductible Clause

11.22 Duty/Customs Duty and Taxes

11.23 Exchange Rate (Currency Conversion)

11.24 Export Subsidies and Similar

11.25 Fraudulent Bill of Lading

11.26 Full General Average

11.27 Fumigation

11.28 Governmental Damage

11.28.1 Customs Clause

11.28.2 Deliberate Damage – Pollution Hazard

11.29 Jurisdiction

11.30 Letter of Credit

11.31 Loading and Unloading

11.32 Location

11.33 Mechanical and Electrical Derangement (MEED)

11.33.1 Usage

11.33.2 Meaning

11.33.3 Damage Detection Devices – Shock and Tilt Monitors

11.34 Packing

11.35 Pair and Set

11.36 Pipeline Clause

11.37 Peak Value/Automatic Increased Value

11.38 Process

11.39 Reissue

11.40 Returned Goods

11.41 Salvage Loss

11.42 Shut-out Shipment

11.43 Sight Draft Extension

11.44 Sorting/Segregation

11.45 Trade Loss

11.46 Travel and Accommodation

11.47 Waiver of Subrogation

12. Insuring Terms 7 – War and Related Perils

12.1 Institute War Clauses (Cargo) CL.385, 01.01.09

12.2 Perils

12.2.1 War

12.2.2 Civil War

12.2.3 Revolution, Rebellion and Insurrection

12.2.4 Civil Strife

12.2.5 Hostile Act by or against a Belligerent Power

12.2.6 Capture

12.2.7 Seizure

12.2.8 Arrest

12.2.9 Restraint

12.2.10 Detainment

12.2.11 “… and the consequences thereof or any attempt thereat”

12.2.12 Derelict Mines etc

12.3 Exclusions

12.3.1 The Frustration Clause

12.3.2 Hostile Use of Weapons or Devices

12.4 Waterborne Agreement

12.4.1 Duration

12.4.2 Reattachment Provision (‘Held Covered’)

12.4.3 Craft

12.5 Institute Strike, Riot, Civil Commotion (SRCC) CL 386, 01.01.09

12.5.1 Strike

12.5.2 Locked-out Workmen

12.5.3 Labour Disturbances

12.5.4 Riot

12.5.5 Civil Commotion

12.6 Terrorism

12.7 General Average (GA)

12.8 Exclusions

12.8.1 Exclusion 3.7

12.8.2 Exclusion 3.8

12.8.3 Exclusion 3.10

12.9 Cancellation Clause in Open Covers

12.10 Institute Malicious Damage Clause, CL.266, 01.08.82

12.11 Institute Radioactive Contamination (RACE) Clause

12.11.1 Extended Race Clause, No 356A/01.11.02

12.11.2 Dirty Bombs

12.11.3 Further Amendment Clause, No 370/10.11.03

12.11.4 Termination of Transit Clause (Terrorism) 2009, JC2009/056, 01.01.09

12.12 Cyber Attack

13. Rejection Risks

13.1 Origin of Rejection Risks Covers

13.2 Concurrent Causation – Applicability to Exclusion 6.2/6.4

13.3 Need for Rejection Risks

13.4 Rejection Risks Insurance

13.5 Analysis of London May 1975 Rejection Clause

13.6 Duration

13.6.1 Attachment

13.6.2 Termination

13.7 Rejection Covers in other Major Markets

13.8 Underwriting Factors

13.9 Warranties

14. Contract Certainty in Policies

14.1 Introduction

14.2 Ambiguities

14.3 Contra Proferentem Rule

14.4 Ambiguities and Gaps in Coverage – Why they Arise

14.4.1 The Mining Industry

14.4.2 The Pharmaceutical Industry

14.5 Limitation to Contra Rule

14.6 Interpreting Policy Terms – The Rise of Factual Matrix/Commercial Common Sense

14.7 Business Common Sense

14.8 Application of these Principles to Cargo Claims

14.9 Exclusions Qualified by ‘Howsoever Caused’

15. Claims 1

15.1 Notice of Claim

15.2 Surveyors and Adjusters

15.3 Burden of Proof

15.4 Causation

15.4.1 Concurrent Causation

15.4.2 Limitation to Concurrent Causation Rule

15.4.3 Concurrent Causation and Inherent Vice

15.4.4 Concurrent Causation and Delay

15.4.5 Concurrent Causation and Wilful Misconduct

15.4.6 Concurrent Causation and Exclusion 4.3

15.5 Death Blow Principle

15.6 Type of Losses and Measure of Indemnity

15.7 Actual Total Loss (ATL)

15.7.1 Destruction

15.7.2 Change of Specie

15.7.3 Irretrievable Deprivation

15.8 Missing Ship

15.9 Salvage Loss

15.10 Constructive Total Loss (CTL)

15.10.1 Reasonably Abandoned

15.10.2 ATL Appearing Unavoidable

15.10.3 Reasonable Time

15.11 CTL Provision in ICC – Cost of Recovery and Forwarding

15.11.1 Notice of Abandonment

15.11.2 Implication of Acceptance of NOA

15.12 Particular Average (Partial Loss)

15.12.1 Particular Average Method (PAM)

15.13 Determination of Gross and Sound Values by Surveyors

15.14 Reprocessing/Reconditioning

15.15 Adjustment of Partial Loss Claims of Machinery – The Institute Replacement Clause

15.15.1 Objective behind the use of the IRC

15.16 Mark-up Over CIF Value and the IRC

15.17 Institute Replacement Clause – Some Unresolved Issues

15.18 Second-Hand Machinery

15.18.1 Obsolete Machinery

15.19 Particular Charges

15.20 Sue and Labour

15.20.1 Essential Features of Sue and Labour

15.20.2 Examples of Sue and Labour Expenses

15.20.3 Consequence of the Failure to Sue and Labour

15.20.4 Preserving Rights of Recovery against Carriers and Other Bailees

15.20.5 Particular Charges that are not Sue and Labour

15.21 General Average (GA)

15.21.1 Definition and Elements of a GA Act

15.21.2 Examples of GA

15.21.3 Distinction between GA and PA

15.21.4 Contributory Values

15.21.5 GA and Cargo Insurance

15.21.6 Appointment of Average Adjusters

15.21.7 GA Security

15.21.8 GA Security – Some Further Comments

15.21.9 Non-separation Agreement

15.21.10 Defences Open to Cargo Interest

15.21.11 Common Ownership and Right of Recovery

15.21.12 Undeclared or Wrongfully Declared Cargo

15.22 Salvage

15.23 Miscellaneous Topics

15.23.1 Piracy

15.23.2 Successive Losses

15.23.3 Rate of Exchange

15.23.4 Payment of Interest

15.23.5 Claim Documentation

16. Cargo Claims 2 – Widening of Cover Beyond the ‘Physical’

16.1 Physical Loss or Damage

16.2 Fear of Loss as Opposed to Physical Loss – the Pharmaceutical Industry

16.2.1 Role of the Food and Drug Administration (FDA)

16.2.2 Testing of Pharmaceutical Products – Destructive Testing

16.3 Control of Damaged Goods Clauses

16.3.1 American Home Assurance Co v Merck Co Inc (2005)

16.3.2 Atlantic Mutual Insurance Co Inc as subrogee of Pepsico Inc v CSX Lines (2006)

16.3.3 National Fish & Seafood Inc (assured) v Great American Insurance Co (insurers) (2017)

16.4 Development of Fear of Loss Covers

16.5 Manufacturer’s Warranty

16.5.1 Policies without the Institute Replacement Clause (IRC)

16.5.2 Policies with the Institute Replacement Clause (IRC)

16.5.3 Mitigation

16.5.4 Special Clauses

16.6 Paper Shortage – Development of Guaranteed Outturn Covers

16.6.1 Other Causes of Shortages

16.6.2 Trade Allowance

16.7 Development of Guaranteed Outturn (GOT) Covers

17. Cargo Recoveries

17.1 Introduction

17.2 ‘Fatal Errors’ in the Cargo Recovery Process

17.2.1 Missing the Time Limit

17.2.2 Suing the Wrong Party

17.2.3 Naming the Wrong Parties as Claimants

17.2.4 Suing under the Wrong Contract

17.2.5 Failing to Commence Proceedings Correctly (including in the Wrong Forum)

17.2.6 Failing to Obtain Security

17.2.7 Common Mistakes on the Merits

17.3 Conclusion


Annex A: Cargo Families

Annex B: Claim Documentation


K.S. Vishwanath, MA(Econ) is an underwriter and adjuster of international repute. Starting his career in 1981, he was part of multinational insurance companies in India and abroad. He now works as a freelancer. He has been appointed in many large profile claims by insurers, brokers and corporate customers in view of his ability to resolve issues amicably and provide not only a legal perspective to claims but also base his opinions on international market practices. His work with clients as well as insurance companies has given him a unique insight into the subject. The second edition of the book, based on four decades of practical experience, offers expert guidance on both the law and practice of marine cargo insurance.

Number of Pages:
Published Date:
March 2023
Book Height:
244 mm
Book Width:
189 mm

K.S. Vishwanath

1.9 kg
(Stock due end of May 2023)


  • 5
    Review carried in IUMI website

    The 2nd edition of "Insuring Cargoes - A practical guide to the law and practice" authored by K.S. Vishwanath was recently published by Witherbys of UK. The 2nd edition bears little resemblance to the first edition and seems to have been virtually rewritten. The book contains a wide array of topics, a tour de force on marine cargo insurance, reflecting the author’s depth and insight into the subject. There is a fine balance between law and practice. Concepts are well illustrated with examples drawn no doubt from the author’s long experience as a practitioner. The author has a penchant for scenario-building to examine outcome of policy wordings. The book cites all relevant case laws from English and American courts but in essence it offers a practical insight into marine cargo insurance. The first chapter deals with not only the basic concepts of marine cargo insurance which are analysed with the help of examples drawn from the author’s experience and case laws but also examines in detail various aspects of international trade including a critical look at Incoterms 2020 and the Insurance Act 2015 of UK. The first chapter also provides examples of various methods of double insurance which one does not find in other books. Chapters 2 and 3 provide a discussion on English law as it stands on insurable interest. For instance, economic insurable interest is yet to be recognised in English law and the fallout from this is discussed in the context of sale contracts where risk and title is passed on to the buyer but the seller remains unpaid. The position of unpaid Seller including the unpaid CIF /CIP seller is discussed in detail and boldly questions the current practice of extending Sellers Contingency covers only to FOB/CFR and similar contracts. The fourth chapter deals with various components of a marine open cover such as nature of bottom and location limits as well as the tension between the certificate and the open cover with the former containing just a few of the terms contained in the widely drawn open cover. Sales turnover policies are also discussed at length. The fifth chapter is devoted to the Institute Classification Clause, ISM and ISPS endorsements. Chapter 6 on 2009 edition of Institute Clauses (A) is exhaustive and contains an in-depth analysis of perils, exclusions and duration of cover. The author provides possible claims scenarios and examines how the 2009 clauses would respond. The chapter also highlights the possibility of insurers not extending the cover in certain circumstances and hence the need for brokers to have a suitable Continuation clause to keep the policy alive till goods reach the insured destination. The 7th chapter deals with inherent vice and delay exclusions and possible buy-back covers. The next three chapters that follow deal with ‘named’ perils and trade clauses such as ICC(B) and (C), Bulk Oil Clauses including Guaranteed Outturn, Institute Theft Pilferage and/or Non Delivery and the latest clauses for frozen foods/meat. Again the outcome of claims based on these clauses are discussed in the light of possible claim scenarios. One of the highlights of the 2nd edition is a chapter devoted to an in-depth analysis of several broker wordings (non-Institute clauses). There are new chapters on War and SRCC, Contract Certainty and Rejection Covers. The chapter on Contract Certainty deals with ambiguous wordings and goes on to discuss how bespoke wordings are developed with examples from the mining and pharmaceutical industries. Unintended consequences of some popular exclusion-wordings are discussed reflecting the author’s emphasis on contract certainty in policies. Two chapters have been devoted to claims and very well written. There is an in-depth discussion on physical loss or damage type of cover and its relevance to pharmaceutical products. Miscellaneous topics include successive losses, piracy and exchange rate fluctuations and how they are to be dealt with. The last chapter is on recoveries contributed by Jai Sharma of Clyde and Co, London. The author explains in his Preface that the “focus of this chapter is the pitfalls that can trap the unwary on a recovery claim rather than everything the reader needs to know about recoveries.” The book is interspersed with ideas and concepts which are thought provoking. As an annex to the book, there is a very exhaustive list of claim documentation for general cargo, dry and liquid bulk. The 2nd edition is a heavy book of 560 pages-perhaps reason why an Index has not been included. The book is well divided into chapters and sections along with a Contents List giving section-wise topics covered which will hopefully make it easy to navigate without an index. Mr. Mike Roderick of Clyde & Co, London who has written the Foreword says about the book: “The author does not shirk from tackling problematic areas……The author writes on these issues in a stimulating and authoritative manner. …. It is commended to any reader interested in marine cargo insurance”. The book is priced at GBP 225. Like all technical book, this book too is expensive but is most certainly a welcome addition to the library of any serious practitioner of marine cargo insurance who is interested in contract certainty in policies and wants a thorough grip over the legal and practical aspects of cargo insurance.

  • 5
    Review by Thomas J Lynch, CPCU, SCLA, AMIM, MLA, director of claims at CSL, USA

    The book has a good balance between law and practice and discusses issues that would interest a practitioner. It has little resemblance to the first edition and seems to have undergone extensive revision with several new chapters. The Book has 17 chapters and covers topics such as the new Insurance Act 2015 UK, Incoterms 2020, the law as it stands today on insurable interest, a separate chapter on contingency risks, a critical look at the various aspects of a marine open cover, a detailed examination of Institute, Trade and non-Institute Clauses, contract certainty, claims and recovery from sea carriers. There is a useful annex on documentation for various types of claims. I've been involved in marine cargo insurance for over 50 years and can say without hesitation that ‘Insuring Cargoes’ is one of the best works on the subject I have seen-this is not surprising since the book is written by a practitioner.

  • 5

    I went through the Detailed Contents of the book-looks like a formidable work! Such a book has long been needed, so I imagine it will quickly become a standard reference

  • 5
    Insuring Cargoes By K.S.Vishwanath - 2nd Edition

    Practical and useful guide to Underwriters and Professions - as noted after going through the link giving brief details of the Book. Prefer to go through the full version of the Book.

  • 5
    The best book on marine insurance

    It’s the best book on marine insurance that I have read to date. I am sure the book will be a success in U.S.A.

  • 5
    The Missing puzzle piece!

    It's like a missing puzzle piece for my master of law thesis completion!

  • 5
    profound, unprecedented, original....

    Compared to other works and publications I have seen, your analysis of these topics is very profound, unprecedented, original...

  • 5
    Your book stands out compared with other books

    Your book stands out compared with other books on this subject in the sense that the text is straight forward and understandable to people outside the small group of marine lawyers and insurers. The illustrations and your practical approach will undoubtedly make this book essential reading for insurers, lawyers and other involved persons who lack practical experience in handling and shipping cargo. Old stagers will also have something to learn from your book

  • 5
    First Edition Appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers

    If you’re reading or watching this review, you are probably a shipping practitioner faced with complex claims which tend to hinge on detail and minute practicalities. Or perhaps you’re an insurer, owner, or claims adjuster confronted by complicated underwriting issues. If you’re in any way professionally involved in marine cargo insurance, read this book. You could well find the answer to most -- if not all -- of your enquiries in it. As you’ll discover, it’s thoroughly researched and readable -- and in our view (although we are not experts in this field) it should be required reading, not just for legal practitioners, but also -- as the author points out -- for underwriters, brokers, forwarders, surveyors, P & I Clubs, cargo owners and shippers. The sub-title, ‘a practical guide to the law and practice’, is certainly apt. As Vishwanath is an underwriter and adjuster himself, the emphasis is placed on what has happened, what can happen, and what actually does happens to marine cargoes -- and the insurance implications and consequences which can result. To cite only one example; the consequences of an improperly drafted insurance policy on a cargo can be financially disastrous, whether for individuals or companies. This book can certainly alert practitioners and all others concerned to the contingencies and risks that may impact on a particular cargo and on a particular voyage. The specific aim here is obviously to construct insurance cover that is -- no pun intended – watertight! Unlike most other books of its kind which focus on the London market and on risks placed in that market, Vishwanath’s book is global in its scope and orientation, with detailed comment on and almost innumerable case references to, issues and events drawn not just from London, but from a number of other jurisdictions, including France, Norway and the US. The book is also an invaluable source of technical information in plain English, much of it illustrated graphically with photos and diagrams. It’s therefore intelligible not just to the techies of this world, but to the general informed reader. For further ease of reference, crucial points are highlighted and footnoted where appropriate. Of particular note, there’s an exhaustive and highly detailed chapter four on Incoterms and Insurable Interest included in this edition, with a separate chapter on Seller's Contingency Insurance. None of the contemporary books available on the insuring cargoes contain such a detailed commentary on practical issues concerning these topics which will be most useful to some readers. So, for practitioners and insurance professionals, not to mention students in this field, ‘Insuring Cargoes’ is a welcome contribution to the literature of cargo insurance and the development of coverage and clauses in international markets, describing in a refreshingly topical way the actual practice of the principles involved.