Complete Glossary of Marine Terms & Abbreviations


A

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Abaft
a position behind [the vessel]

Abandonment
Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss.

Abeam
on a line at right angles to a ship's or aircraft's length

ACOG
Aircraft on ground

Act of God
"An event that is the result of natural forces, arising without human intervention, which no human foresight could have provided against and of which no human prudence was not bound to recognise the possibility".
Witherby's Dictionary of Insurance, 2nd Edition.

Actual Total Loss
This occurs when:
1. The insured property is completely destroyed; or
2. The insured is irretrievably deprived of the insured property; or
3. Cargo changes in character so that it is no longer the thing that was insured (e.g., cement becomes concrete); or
4. A ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.

Ad Valorem Bill of Lading
Same as Valued Bill of Lading.

Advance
An agreed percentage increase applied to the total of invoice plus freight, for unknown expenses at the time of shipment, and also for a portion of the insured's profit.

Advance Freight
Same as Prepared Freight.

Adventure
The exposure of property to risk at sea.

Affidavit
A written declaration on oath.

Affreightment
A contract which sets forth the obligations of both shipper and carrier con¬cerning transportation of the merchandise. The most common forms of affreightment are Bills of Lading and Waybills.

Aft
towards the stern or rear of the vessel


AIR CARGO TERMINOLOGY

Advance Arrangements
Certain classes of commodities in air freight such as gold, precious gems, fur, live animals, human remains and oversized shipments, require arrangements in advance with carriers. An official Air Cargo Guide or any airline will have detailed information.

Air Transportation Waybill (Air Waybill)
The airfreight equivalent to a bill of lading is merely a receipt for the goods and is not a document of title.

The airline would normally advise the customer (consignee) of the arrival of the goods and providing the customer holds the necessary invoices, etc would release the goods to them. To ensure payment is protected it is possible to make arrangements through your bank or finance house to present the necessary invoices to your customer only against payment or on signing a draft. Alternatively in some cases the airline will undertake to collect payment.

Assembly Service
A service under which an airline assembles shipments and transports them as one shipment to one receiver

Bonded Terminal
An airline terminal approved by the Customs Department for the storage of goods until duties are paid or the goods are otherwise released.

Check Digit Number
A single digit of the airbill number which ensures the airbill number is correctly entered into a computer system.

Demurrrage
The detention of containers by shippers or receivers of freight beyond a specified free time. The airlines tender carrier-owned containers to the customer for loading and unloading of the unit. In the event the container is not returned to the carrier within a specific time (usually 36 to 48 hours) a charge will be assessed by the carrier for each 24 hours or fraction thereof beyond the allowed time.

Dimensional Weight
Dimensional Weight refers to density, ie weight per cubic foot. The Dimensional Weight Rule was developed as a practice application to low density shipments under which the transportation charges are based on a cubic dimensional weight rather than upon actual weight.

Exception Ratings
Rates set at a certain percentage above the general commodity rates because they apply to commodities that require special handling.

Freight All Kinds (FAX)
A tariff term used for airfreight, allowing for any type of commodity to be consolidated. A forwarder with a bulky light product can pack it with a smaller denser product, allowing them to maximise the space and weight availability.

General Commodity Rate
An air freight rate applicable on all commodities except those for which specific rates have been filed. Such rates are based on weight and distance.

Gross Weight
Entire weight of a shipment, including containers and packaging material.

In Bond
As applied to air freight coming into a country the term 'in bond' designates' a procedure under which customs clearance of cargo is postponed until the cargo reaches an inland customs point rather than subjecting the cargo to clearance procedures at congested gateway cities.

Intermodal Compatibility
The capability which enables a shipment to be transferred from one form of transport to another.

International Air Transport Association (IATA)
The trade and service organisation for airlines of more than 100 countries serving international routes.

International Civil Aviation Organisation (ICAO)
ICAO is an agency of the United Nations, organised to ensure orderly worldwide technical development of civil aviation.

Memorandum Tariff
Non-official publications which contain rule and rate information extracted from official tariffs.

Minimum Charge
The lowest rate applicable on each type of air cargo service, no matter how small the shipment.

NES (Not Elsewhere Specified)
The abbreviation often appears in air freight tariffs. For example: "advertising matter, NES". This means that the rate stated in d-ie tariff applies to all commodities within the commodity group except those appearing under their own rate. Other abbreviations include: NOIBN (not otherwise indexed by number), NOS (not otherwise specified) and ORM (other regulated material).

Palletisation
The use of a platform upon which the containerised or otherwise utilised shipment rests. Palletisation means more efficient use of space aboard freighter aircraft or ships and better cargo handling, particularly when used as part of mechanised systems employing such other advances as Pallet Loaders and Pallet Transporters.

The Pallet Loader is a device employing one or more vertical lift platforms for the mechanical loading or unloading of palletised freight at planeside. The Pallet Transporter is a vehicle for the movement of loaded pallets between the aircraft and the freight terminal or truck dock. Sometimes the functions of both the Pallet Loader and Pallet Transporter are combined into a single vehicle.

Restricted Articles (Air Transport)
Explosives
Flammable and non-flammable compressed gas
Flammable liquids
Flammable solids
Oxidising materials
Poisons and irritating materials
Radio-active materials
Corrosive liquids and solids
Magnetised materials
Etiological agents
Polymeiizable materials.

Shipper's Letter of Instruction
A form used by a shipper to authorise an airline to issue an air waybill on the shipper's behalf. All details of shipment are contained in the form which anthorises the airline to sign the air waybill in the name of the shipper.

Signature Service
A service designed to provide responsibility for the custody of shipments in transit. A signature is required from each person handling the shipment at each stage of its transit.

Tare Weight
The actual weight of the container (ULD) when empty.

Total Cost of Distribution
The sum total of all the costs incurred in the distribution of goods. This includes:
Transportation charges
Cost of capital tied up in inventory
Warehousing expenses
Packaging
Insurance
Product obsolescence
Pilferage
Inventory taxes.

As a percentage of income from sales, total cost of distribution ranges from a low of 4.4% in the pharmaceutical industry to a high of 26.6% in consumer and industrial merchandising.

ULD (Unit Load Device)
Term commonly used to refer to airfreighted containers.

AIRMIC
Association of Risk Managers in Industry and Commerce

Air Waybill
A bill of lading issued by an airline acknowledging receipt of merchandise and indicating conditions for carriage.

All E.R.
All-England Law Reports

All Risks
All fortuitous causes of loss. it does not embrace inevitable loss such as wear and tear.

All Other Perils & Misfortunes
Phrase in a Cargo policy meaning perils of the same nature as those described specifically in the Perils clause.

Annual Policy
Designed for clients with a small turnover of Goods in Transit. A deposit premium is paid and this is adjusted at the end of the year based on declara¬tions made.

Anti-dumping duties
These are duties which may be applied by importing countries against goods for which there is evidence that dumping is taking place. The aim of these duties is to raise the base level price (before transport and other duties) of the imported goods to a level at least equivalent to those being sought within the country of origin.

Appd
Approved

Application
A written form submitted to underwriter to obtain quotation for a risk, and contains particulars of the risk.

Approved or H/C
An "approved" vessel is one which the underwriters deem adequate to carry the insured cargo, at the agreed rate of premium. Where the vessel is not approved, the risk is still covered but subject to a reasonable additional pre¬mium.

ARRIVED SOUND VALUE I ARRIVED DAMAGED VALUE
Is a basis of settlement when adjusting claims for damaged cargo. A comparison of the estimated arrived sound value and the actual arrived damaged value shows the difference as a percentage of the arrived sound value for the purpose of arriving at the percentage of depreciation. The percentage is applied to the insured value to arrive at the claim settlement.

Example:
Ten cases of fruit arrive damaged. Insured for $10000 arrived sound value is established at $2000. The fruit is auctioned and sold for $500 (arrived damaged value). Adjustment would be as follows:

$2,000 - $500 x 100 = 75% (partial loss) x $1,000 = $750 (claim settlement)
$2,000 1

Any auction or costs associated with directly mitigating the loss must be added to the claim settlement.

Arr. T.L.
Arranged total loss

Assignment
The passing of beneficial rights from one party to another.

Assailing Thieves
Forcible taking of property but not sneak thievery.

Athwart
Across

Average
Any partial loss or damage, due to insured perils.

Average Adjuster
Appointed by shipowner to prepare General Average Statement.

Average Agreement
A document signed by cargo owners by which they agree to pay any General Average contribution rightfully due so that cargo may be released after a GA loss has occurred.

AVERAGE BOND
An agreement signed by all interested parties acknowledging their liability to pay a share of the loss under general average. A "general average guarantee" is sometimes referred to (particularly in the USA) as an "average bond".

Average Clause
The clause in marine policy which sets out the coverage provided in the event of partial loss.

AVERAGE DISBURSEMENTS
Expenditure incurred by the shipowner in connection with a general average act or an act of salvage. Such expenditure, when properly incurred, is recoverable from the GA or salvage fund created by the adjuster. Hull underwriters are not liable directly for GA expenditure. The insured must recover his expenditure from the GA fund. Underwriters’ liability for GA contribution, if any, will incorporate their proportion of the GA expenditure that is included in the contribution paid by the insured.

Average Irrespective of Percentage
Indicates that partial losses will be paid regardless of any franchise or per¬centage.

Avoidance
The right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage to step aside from the insurance con¬tract and to treat it as though they had never accepted the risk.

Av.
Average

Award
A decision given by a court of law or by an arbitrator to conclude a dispute. The term can he used also to define the amount of damages allowed, if any, in the award. A judge in court will often state the reasoning fur the decision, whereas this is rarely the case with an arbitrator’s award.

a.a.
After arrival. Always afloat

A.A.I.
Alliance of American Insurers

A.B. or A.B.S.
American Bureau of Shipping

A.B.I.
Association of British Insurers

A.B.I.S.
Association of Burglary Insurance Surveyors

A.I.I.C.
Association of the Insurance Institute of Canada

A.C.I.L.A.
Association of the Charted Institute of Loss Adjusters

A.C.V.
Air cushion vehicle (hovercraft)

A.D.
Accidental damage

A.F.I.A.
American Foreign Insurance Association

A.H.F.
American Hull Form

A.H.I.S.
American Hull Insurance Syndicate

A.I.D.A.
Association Internationale du Droit de l'Assurance (International Association of Insurance Law)

A.I.M.U.
American Institute of Marine Underwriters

A.I.O.A.
Aviation Insurance Offices Association

A.L.M.
Association of Lloyd's Members

A.M.L.
Absolute maximum loss

A.N.L.
Above-normal loss

a.o.a.
any one accident

A.O.A.
Accident Officer's Association

a.o.b.
any one bottom

A.O.C.
All other contents

a.o.e.
Any one event

a.o.l.
any one loss

a.o.o.
any one occurrence

a.o.voy.
any one voyage

a.o.v.
Any one vessel

AP
Additional premium. Annual premium. Agricultural produce

a.p.l.
As per list

A.P.P.
Adjustable premium policy

A.R.P.
Accrued rights premium

A.T.L.
Actual Total Loss (sometimes wrongly used for Arranged total loss.)


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Back Freight
Payment due to the shipowner for the carriage of goods beyond the contract port, owing to circumstances beyond the control of the shipowner

BAF
Bunker Adjustment Factor is a surcharge levied by the shipping company to cover any extra fuel costs incurred between the time a freight rate is quoted and when the goods are shipped. BAF could be a rebate if bunkering costs had decreased in the meantime.

Ballast
Weight put in a ship to help to keep her stable; nowadays this is usually seawater.

BARE BOAT CHARTER
The Charterer hires the vessel for a long period, appoints the master and crew, and pays all running expenses.

Barratry
A fraudulent, criminal or wrongful act by the ship's master or crew causing loss or dam¬age to the ship or cargo.

Bd.
Bond

Beam
the width of a ship at her widest part

Bear away
To steer the boat away from the direction of the wind

Beating
Sailing to windward, by tacking with the wind first on one side, and then on the other

Beaufort Scale
A wind scale and sea disturbance table by which mariners grade the force of wind and height of waves, thus communicating the general condition of the sea to others by use of a wind force number.

Benefit of Insurance Clause
A clause in a contract between the insured and a bailee by which the bailee of goods claims the benefit of any insurance policy effected by the cargo owner on the goods in care of the bailee. Such a clause in a contract of carriage, issued in accordance with the Carriage of Goods by Sea Act, is void at law.

BIFA - British International Freight Association
Trade Association of British Freight Forwarders.

Bill of Lading
The most common form of affreightment which serves three purposes: the contract of carriage between the shipowner and shipper, outlining the liabil¬ity of carrier, it is also the shipowner's receipt for the goods and the docu¬ment of title to them; (i.e., as a negotiable document, interest can be as¬signed to a third party).

Bight
the middle of a rope; not the ends

Bilge
the curve of the lower underwater part of a boat, nearest the keel

BILL OF EXCHANGE (Abbreviation BE)
An order in writing from one person or company to another requiring them to pay a certain sum to a person named on the Bill of Exchange.

A term, tenor or usance draft is a Bill of Exchange that is payable at a fixed or determinable future date. A determinable future date would be, for example, '90 days after sight'.

A sight draft, on the other hand, is one that calls for payment immediately upon presentation to the drawee.

BIMCO - Baltic and International Maritime Council
A Danish based organisation to which many shipowners belong that represents their interests and assists by preparing standard charter parties and other shipping documents and providing other advisory services.

Bitter end
Inboard end of an anchor cable

Bls.
Bales. Barrels

Blue Peter
A rectangular flag, blue with a white square in the centre, which may be displayed to indicate that a ship is ready to proceed.

Bollard
A vertical post on ship or shore, for securing mooring lines

Bonded Goods
Imported goods deposited in a Government warehouse until duty is paid.

Bonded Shipments
Shipments on which duty is payable, but which are permitted to travel to inland destinations before customs inspection is made and duty is actually paid.

Bonding Company
An organisation that is prepared to undertake an agreement to make good a financial guarantee on behalf of another responsible for such guarantee. Owners of “arrested” vessels may obtain such a hood to satisfy a court and to obtain release of the vessel.

Boom
A spar used for extending the foot of a sail

Boom vang
A rope used to hold a boom forward and downward

Boot Topping
A protective composition painted round the hull of a ship to prevent corrosion between the load and light waterlines.

Bosun's chair
A seat which can be attached to a halyard for sending a man aloft

Bottom Limit
The maximum value at risk per shipment/sending/aircraft.

Bottom Treatment Clause
A clause in the Institute bull clauses, whereby underwriters specify the extent to which they shall be liable for surface preparation and primer painting of plates in repairing the bottom of a ship damaged by an insured peril.

Bottonry Bill or Bond
The pledge of a ship, or of her cargo, as security for repayment of money advanced to the master in an emergency, and of no avail if the ship be lost

Bow Thruster
A propeller used to provide a transverse thrust to the bow of the ship and to assist movement in confined spaces.

Bowline
a common marine knot that forms a fixed loop

Bowsprit
Spar projecting forward from the stem

Box
Colloquial name for container.

Box Rate
A specific freight rate (usually defined by individual commodity) for shipment of a full container, irrespective of the volume that it contains.

Exporters / Importers should check whether heavyweight containers are acceptable, particularly if their product has a weight-to-volume ratio, since they are often able to ship additional material without incurring extra freight costs.

Boxtime
A standard BIMCO time charter for containerships.

BRANDS CLAUSE
Provides that where a brand or trademark constitutes a guarantee by the name of the manufacturers, any salvage value in the event of a loss shall be assessed after the brand or trademark has been removed.

BREACH OF WARRANTY
The UK Marine Insurance Act 1906 and subsequent Acts throughout the Commonwealth (Canada 1993) demand that the insured comply literally with any warranty in the policy, whether it be an express warranty or an implied warranty.

Non compliance, where not excused, is termed "breach of warranty" and discharges the underwriter from all liability under the policy, whether or not it relates to the breach, as from the date of the breach; but without prejudice to any valid claims arising from accidents occurring prior to the date of the breach.

Breach of warranty is excused where circumstances have changed so that the warranty has become unnecessary; or where it would be illegal to comply with the warranty; or where the policy conditions waive breach of warranty.

BREACH OF WARRANTY CLAUSE
Is a clause in a policy whereby underwriters waive breach of certain specified warranties.

In hull policies, the clause relates only to warranties as to cargo, trade, locality, towage, salvage services or date of sailing, and requires prompt notice, and amended conditions and an additional premium if underwriters so desire.

There is no similar clause in cargo policies as a standard, but cargo underwriters usually waive breach of the implied warranties of seaworthiness and cargo-worthiness of the overseas carrying vessel, provided the insured are not privy to that seaworthiness and cargo-worthiness.

Break Bulk
Applies to goods that have been stripped from containers (or other form of bulk carriage) for forwarding to final destination.

Goods shipped loose in the vessel's hold and not in a container.

Breaking Bulk
The initial opening of hatches on entering port and the commencement of discharge of cargo.

Breasthook
A place bracket joining the starboard and port stringers at the bow of a ship.

Bridge
The bridge is the structure from where a vessel is navigated and directed

Broach
to swing broadside to the sea

Broker
An agent representing a principal to buy or sell goods, merchandise or marketable securities, or to negotiate insurance, freight rates or other matters for a principal; the sales or transactions being negotiated not in his own name but in that of the principal.

bsst
Brick or stone built, slated or tiled

Bulkhead
vertical partition dividing a cabin or hold [nautical term for a wall]

Bulwarks
solid rails around the deck edge of a vessel

Bumbershoot
American form of excess layer liability cover

Bunkers
A ship's fuel for its engines

Burgee
A triangular flag denoting membership a sailing club, flown at the masthead

By the head
A vessel trimmed bow down (i.e. the front of the vessel is lower than the rear)

By the lee
When a sailing vessel is running downwind, if the wind blows from the side on which the boom is lying, possibly causing a gybe

By the stern
A vessel trimmed stern down

B.B. Clause
Both to blame collision clause

B.I.
Business interruption. Bodily injury

B.I.A.
British Insurance Association

B.I.B.A.
British Insurance Brokers' Association

B.I.F.U.
Banking, Insurance and Finance Union

B.I.I.C.
British Insurers' International Committee

B.I.L.A.
British Insurance Law Association

B.I.P.A.R.
Bureau International des Producters d'Assurance et de Réassurance (International Association of Insurance and Reinsurance Brokers and Agents)

B.M.U.A.
British Marine Underwriters Associations

B.N.A.
British North America

B.R.
Builders' risk (Marine)

B.S.
Boiler survey. British standard

B.S.I.
British Standards Institution

B.S.T.
British Summer Time

B.T.U.
British Thermal Unit

B.V.
Bureau Veritas

B/E
Bill of Exchange

B/G
Bonded goods

B/H
Bordeaux/Hamburg limits

B/L Ton - Bill of Lading Ton
The greater weight or measurement of goods where 1 ton is either 1000 kilos or 1 cubic metre (also called Freight Ton).


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CABAF / CAF / BAF

CABAF
An adjustment factor incorporating the bunker and currency adjustments.
CAF
Currency Adjustment Factor is an adjustment of the freight rate caused by a significant change in the relative exchange rates in the shipping line's basket of currencies between quotation of rate and shipment date. This may be a positive (surcharge) or negative (rebate) adjustment.
BAF
Bunker Adjustment Factor is a surcharge levied by the shipping company to cover any extra fuel costs incurred between the time a rate is quoted and when the goods are shipped. BAF could be a rebate if bunkering costs had decreased in the meantime.

Cable
Anchor chain; or - as a measurement of distance, 1/10 of a nautical mile i.e. about 200 yards

CAPTAINS PROTEST
This is when a ship has been involved in an accident or heavy weather where cargo has suffered damage the Captain signs a declaration giving full details of the accident / incident.

Cardinal mark
a marker, wither a buoy or a post, indicating navigable water on the named side of the mark.

Careen
to heel a sailing etc. boat over to work on her bottom

Cargo War Risk Policy
A separate Cargo policy covering cargo while waterborne only (except at transshipping point, which may be on land or water). Insures against war risks.

Carnet see ATA Carnet
(pronounced car-nay)

Carriage of Goods by Sea Act (COGSA) (USA) and Carriage of Goods by Water Act (COGWA) (Canada)
International agreement defining the responsibilities and liabilities of an ocean carrier transporting cargo.

CARRIERS LIEN
The right to retain possession of goods pending payment of overdue freight charges. The term may refer, also, to the right of a carrier to retain cargo pending payment of a GA contribution; but may be discharged in such cases by the payment of a GA deposit or provision of an acceptable GA guarantee.

Carry way
to continue to move through the water, even although propulsion has stopped

CAUSA CAUSANS
The cause of a cause of loss.

CAUSA PROXIMA
Proximate cause.

Cavitation
Vibration and loss of power, caused by aeration of propeller working surfaces

CELLULAR
Term used to describe hold configuration of purpose built containerships equipped with cell guides into which containers fit.

Centralised or aggregated rate : containers
This term relates to containerised cargo. Some shipping companies prefer to limit the number of ports of loading and will pay the forwarding cost from say, Auckland to New Plymouth for containers being shipped to the Middle East.

Centre of buoyancy
centre of the immersed volume of a vessel

Centreboard
a board plate which can be lowered from a housing in the bottom of the hull, to increase lateral resistance,to increase lateral resistance (i.e. reduce leeway - the vessel moving sideways)

Certificate of Origin
The purpose of this document gives evidence to the import country's customs authorities that the cargo:

  • are not from a country with which the buyer's country has trade restrictions or embargo
  • are genuinely from the country specified (e.g. for tariff purposes)
  • are counted for compilation in government statistics
  • The certificate of origin may be combined with the commercial invoice, or other documents.

Certificate of Insurance
A document presented by the insurance company or insured as evidence that insurance is in effect. The insured may assign his rights under this negoti¬able document to a third party, usually the consignee, by endorsing the re¬verse of the certificate.

CFS - Container Freight Station
Place for packing and unpacking LCL consignments.
Variously known as:
C/Bs in U.K., Depots in Australia, and ICDs (U.K. and the Indian Subcontinent).

CGT
Capital gains tax

Chain plates
strong points on the hull of a sailing vessel, each side of the mast, for attachment of shrouds

CHANGE OF VOYAGE
This applies only to voyage policies (hull or cargo). A change of voyage occurs when the destination of the ship is voluntarily changed after commencement of the voyage. Unless arrangements have been made with the underwriters to continue cover, prior to the change, underwriters are discharged from all liability as from the time the decision to change the voyage is manifested; but without prejudice to any valid loss occurring prior to such time.

Underwriters hold covered change of voyage; subject to prompt notice to underwriters, payment of an additional premium and change of conditions, if required.

Chart datum
a level on a nautical chart marginally below the lowest spring tide level, that forms the basis of depths on such charts.
It is highly unusual for a low tide to fall below this mark.

CHATER PARTY
A very large proportion of the world's trade is carried in tramp vessels. It is quite common to find one cargo which will fill the whole ship, and, in these circumstances, one cargo owner or one charterer will enter into a special contract with the shipowner for the hire of his ship - such a contract is known as a charter party. It is not always a full shipload, although this is usually the case.

A charter party is a contract whereby a shipowner agrees to place his ship, or part of it, at the disposal of a merchant or other person (known as the charterer), for the carriage of goods from one port to another port on being paid freight, or to let his ship for a specified period, his remuneration being known as hire money. The terms, conditions and exceptions under which the goods are carried are set out in the charter party.

CIM
(Europe) - Convention Internationale concernant le transport des Marchandises par chemin de fer
International convention on Carriage of Goods by Rail.

CKD
Completely Knocked Down: a machine shipped in a crate, in kit-set form.

CLASSIFICATION CLAUSE - Cargo
An ILU Institute clause that specifies that the vessel carrying the cargo must comply to certain maritime nations' inspectorates, in terms of the vessel’s condition and construction. For example, the UK inspection authority is Lloyds Register of Shipping. If a vessel is in good order, and assessed as so by Lloyd's, the vessel is designated an A1 class. Underwriters in the Classification Clause require that the vessel is under a certain age, otherwise an additional premium is due.

This Institute clause is used in cargo open cover contracts to indicate the age and class of overseas carrying vessels acceptable at the premium rates specified in the contract.

Basically, the ship must be iron or steel and mechanically self propelled. The ship must be fully classed with any of the listed classification societies. The ship must be no more than 15 years of age. The age limit is raised to 25 years for liners. Goods carried by ships not attaining the required standard are held covered subject to payment of an additional premium.

CLASSIFICATION CLAUSE - Hulls
A set of London market clauses available for attachment to hull & machinery policies. They incorporate an "existing class maintained" warranty and various restrictive conditions relating to the ship’s classification.

Claw off
sailing close to the wind, to get off a lee shore

Clearance Label
Denotes that a vessel has complied with all the regulations for clearance outward. It is attached to the Victualling Bill by the Customs officer who clears the vessel, and is then known as the Outward Clearance.

Clew
The lower aft corner of a sail, where the foot meets the leech

Clinker
method of wooden vessel construction, where the edge of one plank overlaps the one below it

CLORA
Consequential loss rating adjustment

Close-hauled
Sailing as close to the wind as possible

Closing Date
Shipping company terms for the last date on which export goods can be accepted for a nominated sailing.

Clutter
Unwanted reflections (e.g. from waves or rain) on a radar screen

Cl.
Clause

Clean Bill of Lading
A bill of lading on which the carrier has made no indication of any problems with the condition of the cargo at the time of acceptance for carriage.

Coaming
The rim of a hatchway, raised to prevent water from entering

Cofferdam
Transverse double bulkheads at least three feet apart, extending from the keel to the upperdeck, to separate one part of the ship from another. Cofferdams are located either side of the engine-room space and are used as part of the collision bulkhead.

COGSA
Carriage of Goods by Sea Act

Co Insurance
Where two or more parties share the same risk. A co insurer is not obliged to follow the decision of another co insurer, except where they have given au¬thority for the other party to act on their behalf. Each co insurance is a sepa¬rate contract with the insured.

Collect Freight
Freight which is payable to the carrier when the merchandise arrives at the port of discharge named in the bill of lading.

Collision
Physical impact between two or more ships or vessels used for navigation. In collision liability insurance, the term does not include contact of the insured vessel with anything other than a ship or vessel.

Collision Clause
A clause in a hull policy, covering collision liability incurred by the Insured.
It may also be termed 'Collision Liability Clause' or 'Running Down Clause'.

Combi Ship
A ship designed to carry both conventional and containerised cargo.

COMBINED TRANSPORT Abbreviation: CT
Carriage by more than one mode of transport under one contract of carriage.

Compromised Total Loss
An arranged settlement on a hull policy where there is no claim for actual or constructive total loss, but where it is impractical to repair the vessel.

Commercial Invoice
A document issued by the seller to the buyer, which gives detail of merchan¬dise sold, number of units being shipped, per unit cost and the terms of sale.

CTO - Combined Transport Operator
A Carrier who contracts as a principal to perform a combined transport operation.

Commixture
A mixture of two or more cargoes which cannot be separated into the relevant consignments.

Common Carrier
Any shipowner or other carrier who offers his vessel or other mode of trans¬portation to the public for the purpose of transporting merchandise.

Companion
Ladder or stairway

COMPROMISED TOTAL LOSS
This term is used where hull underwriters agree to a compromised settlement for total loss of ship, in circumstances where neither an actual loss, nor a constructive total loss may be claimed, but the value of the ship when repaired does not justify the cost of repairs. This type of settlement is not subject to any basic rules, hut usually applies to policies where the insured value of the ship is higher than her market value.

CONFERENCE
An agreement between shipping companies not to compete on certain elements (e.g. price discounts) on certain shipping routes, so that each may plan for and provide a regular scheduled service. To some this is anti-competitive practice, i.e. a cartel, but it provides stability to both shipping companies and cargo exporters. Conference Ship: A ship operated by a signatory to a shipping conference.

Conning
A nautical term for "has conduct" or "in control".
A conning tower on a submarine is the structure that is used to command the vessel once on the surface.

CONSEQUENTIAL LOSS
Is a loss to the cargo that was caused by a cause other than direct physical force to the cargo itself. An example would be damage to cargo due to delay, following the collision of the vessel with another (in which the cargo was not physically damaged, but prevented from being delivered to its destination before it decayed).

Consignee
Person or firm to whom cargo is shipped.

Consortium
A group of Combined Transport Operators who agree to rationalise sailings in a trade and carry each others' containers.

Constructive Total Loss
The position which exists when the cost of repairing or recovering lost or damaged property plus the value of the salvage would exceed the property's value when repaired or recovered.

Contact Damage
Damage to the ship caused by its striking any object other than another ship or vessel [the latter being termed "collision" damage). Damage to the ship caused by it being grounded or by striking rocks or submerged objects, other than in circumstances which constitute "stranding". Damage to the ship’s cargo caused by any of the above circumstances or hy physical touch with other cargoes or the ship’s hull etc.

CONTAINER TERMINOLOGY

Adjusting loading wall
Sheet lining which allows dunnage bars to be fitted into the container at any point.

ADR
European agreement concerning the international carriage of dangerous goods by road.

Ambient temperature
The temperature of a substance surrounding a body. Thus the ambient temperature of a container holding a refrigerated cargo would be the temperature of the air to which it is exposed outside.

Anti nose dive leg
Support provided at the front end of a container chassis used to support that end during loading operations, i.e. for when the initial weight of the cargo or FLT is at the front and beyond the point of balance.

ASA
American Standards Association.

Axle loading
The total downward pressure exerted by a vehicle through any given axle. This may then be transmitted through two or four wheels.

Blades (chisel forks)
Extremely thin wide forks on a fork lift used for sliding beneath loads which are not on pallets.

Bonded goods
Dutiable goods upon which duty has not been paid, i.e. goods in transit or warehoused pending customs clearance.

Box
Term for a container.

Bridge fitting
Fitting piece (within turnscrew) to keep top sides of adjacent containers together (part of lashing equipment).

BSI
British Standards Institute.

Bulk freight container
Any container which by its own peculiar design, i.e. roof loading hatches and door or front wall discharge hatch, will allow bulk handling of commodities.

Bulkhead
Sometimes used to denote the front wall, i.e. opposite the doors of a container.

CA
Controlled atmosphere. Sometimes used in addition to temperature control to prolong the storage life of fruit.

Car pallet
Flat tray with corner posts for transporting cars on container ships.

Cattle container
Partly open container equipped with rails, boxes and cribs for livestock transportation.

Celcure A
Trade name for a copper chrome arsenite solution, used to treat timber against wood boring insects.

Cells/Cell guides
The guidance system enabling containers to be lowered into and lifted from the hold of the vessel. The holds have vertical guides into which the containers are lowered to form secure stacks restrained at all four corners.

Centre of gravity
The point at which a load will balance or is in equilibrium.

CFS
Container freight station. Other names: containerbase; consolidation depot; depot. Where parcels of cargo are grouped and packed into containers.

Chisel forks
Extremely thin wide forks on a fork lift used for sliding beneath loads which are not on pallets.

Clip on units
Portable refrigeration units designed to clip on to insulated containers which normally rely on a central refrigeration system for their cold air supply.

Closed container
Container that can only be packed through one or more doors in the end or side walls.

Collapsible container
Container with the main parts hinged or removable so that its effective volume may be reduced for transporting in an empty condition.

Container freight station
Container freight station. Other names: containerbase; consolidation depot; depot. Where parcels of cargo are grouped and packed into containers.

Container "head" /"front"
Sometimes used to describe the end opposite to the doors.

Container load
Consignment which, in a container, fully occupies the internal capacity or conversely reaches maximum payload for that particular unit.

Container part load
Consignment which does not occupy the full capacity of a container nor equals the maximum payload and will, therefore, allow the inclusion of other part loads.

Container pool
Agreement between various transport carriers and/or container leasing companies concerning the exchange of containers.

Corner casting
Hardware located on the top and bottom of each container corner post used for handling and securing a container.

Corrugated container
Container with corrugated walls and ends for added strength.

Cryogenic
Using a freezing mixture for refrigeration.

CTO
Combined transport operator

Cushion tires
Solid rubber tires made of fairly soft rubber or composition.

CWE
(Customs) Cleared without examination.

Data plate
Plate affixed to a container giving details of gross and tare weights and external dimensions.

Demurrage
Compensation payable to a container or truck owner for the detention of his equipment beyond a certain time limit.

Depot
Container freight station. Other names: containerbase; consolidation depot; depot. Where parcels of cargo are grouped and packed into containers.

Despatch bays
The point from which containers are physically loaded or unloaded.

Devanning
Term sometimes used to describe unpacking a container.

Dew point
The temperature of a glass or metal object just cold enough to cause dew to appear upon it when exposed to the air.

Dock leveller
A device to span the difference in level between the loading bank and the container floor. It also bridges the gap between the bank and the container.

Document holder
May be located on the container door or front wall and sealed. Contains the customs certificate of container approval.

Dolly
Set of wheels set under front of container to provide support when motive unit is disconnected.

Door to-door
Through-transport of container and its contents from consignor to consignee.

Down rated
The amount by which the lifting capacity of a fork lift is reduced as a result of fitting attachments/increasing load centres, etc.

Down time
The period during which equipment or piece of machinery is not operating or producing.

DPP
Damage protection plan.

Dricon
For the treatment of timber against wood boring insects.

Dry bulk container
Container especially built for carrying grain, powder, sand and other free flowing solids in bulk.

Dry freight
Any dry cargo not requiring controlled temperature protection.

Dry ice
Solid COz (carbon dioxide).

DTI
Department of Trade and Industry.

Dunnage
Material (usually disposable) used to secure cargo or protect it from chafe. Also in some instances for fabricating temporary floors to allow spillage to drain away.

Dunnage bag
Flexible bags positioned within the stow and inflated so that movement of cargo might be prevented.

Emptying
Unpacking goods from containers.

FCL
Full container load. Usually loaded by the shipper for one consignee.

FCR
Forwarder's certificate of receipt; the forwarding agent's through documents for goods, negotiable worldwide.

Feeder ship
Container vessel used in short sea trade to serve ports at which deep sea container ships do not call.

FEU
Forty foot equivalent unit.

Flashpoint
The temperature at which a liquid produces enough vapour to form an inflammable mixture with air.

Flat rack
A flat platform container.

Floor loading
The static and dynamic loads imposed on the floor by the payload and the wheels of handling equipment.

FLT
Fork lift truck.

Footprint
The area of the tyre measured in square inches which actually comes into contact with the surface on which it is operating under a given load. For the purposes of container floors design, the footprint of a pneumatic and cushion tyre is estimated at 22 square inches.

Fork pockets
Recesses sometimes provided in the sides of a container for the entry of the forks of fork lift trucks.

Four way pallet
Pallet so constructed that the forks of a FLT may enter from any side.

Free lift
The distance the forks of a FLT can rise without the overall collapsed height of the mast increasing.

Full tilt container
Container with the full sides and roof, maybe also the ends, covered by tarpaulin, drop sides notwithstanding.

FWC
Fully loaded weight and capacity. A container ideally loaded to its fullest capacity of weight and volume.

G factor
Indicates the constant multiplying factors when considering the effects of acceleration on mass, e.g. a force of 6 Gin relation to a 2 ton load would be equivalent to 12 tons.

Genoa corner fitting
A container corner fitting made to ISO recommended design sometimes called "corner castings", and used by the lifting apparatus to grip the container by interlocking.

GRP
Glass reinforced plastic.

Grabomatic
Fork lift truck attachment that will grip and lift drums, two at a time, by the top rims.

Gross weight
Total weight of a container, that is the container, its payload, and any loose internal fittings.

Groupage
A service providing facilities for small consignments to be consolidated and transported in a container.

Groupage depot
Area where container contents can be consolidated or disseminated.

GVW
Gross vehicle weight the combined total weight of a vehicle and its container inclusive of prime mover.

Half height container
A container, open top with or without soft or hard cover, between 4 ft. and Oft. 3 ins. high.

Half tilt container
Container with larger part of sides, or sides and roof, covered by tarpaulin or similar material.

Hard top container
Closed container with roof that opens or lifts off.

Header bar
Beam or bar (usually above the end doors of an open top container) which may be swung to one side or removed to improve access.

Heated container
Container built with insulated walls, doors, floor and roof, fitted or capable of being fitted with a heating appliance which is capable of raising and maintaining the temperature inside the container at a required level.

House to house
Same as door to door.

House to pier
Container packed inland but unpacked at the pier of destination port.

Humidity
The ratio (expressed as a percentage) of the amount of moisture in the air to that in saturated air at the same temperature.

Hygroscopic substance
A substance which is capable, under the right conditions, of absorbing water vapour from the surrounding atmosphere. Such a substance will continue to absorb moisture until the vapour pressure of the absorbed water is equal to that of the water vapour in the air. It is then said to be in equilibrium. The equilibrium moisture content of the substance is dependent on both its temperature and the relative humidity and temperature of the surrounding air.

If the moisture content is above the equilibrium value the substance will give up water until equilibrium conditions are reached.

IICL
Institute of International Container Lessors, New York.

IMO
International Maritime Organisation. Not all countries are signatories to this organization, but most of the major maritime nations are. It is the vehicle through which dangerous goods and other regulations can become internationally acceptable.

Inflatable dunnage
Flexible bags positioned within the stow and inflated so that movement of cargo might be prevented.

Inlets
Collapsible inlets made of rubber or syn¬thetic materials, used in containers for the transport of liquids or free flowing solids.

Insulated container
A container with the walls, roof, floor and doors insulated to reduce the effect of external temperature on the cargo.

Insulated tank container
Container frame holding one or more thermally insulated tanks for liquids.

Interface
Point at which two systems meet, i.e. road transport and terminal terminal and ship.

ISO
International Standards Organisation.

Joinable containers
Containers whose dimensions and specifications are fixed so as to permit the loading of the containers onto a container flat so that the whole unit can be handled as one ISO container.

Lancashire flat
Type of flat with headboard at one end.

Land bridge
Descriptive term for an overland transit coming between two ocean passages during a container's journey from starting point to destination.

Latticed sided
Open or closed container with at least one side consisting of elements with openings between them.

LCL
Less than full container load. That is, a con¬tainer which is filled with consignments of cargo for more than one consignee or from more than one shipper.

Lo to
Load on load off. Describes ocean transport as distinct from ro ro.

LPG
Liquid propane gas. One type of fuel for mechanical handling equipment.

M (D)
"Empty" (container).

Methyl bromide
Fumigant used to kill infestation in various commodities. May on occasion be used to fumigate the container. An odourless and poten¬tially dangerous poison.

Module
A volume described in multiples of similar measurements to that of the container. Altering a module can, under some circumstances, improve the utilization of a container.

Multi tank container
Container frame enclosing two or more separate tanks for liquids.

NVO(C)C
Non vessel operating (container) carrier.

Net weight (payload)
Difference between the gross weight and the tare weight of the container.

One way lease
Lease of a container for the forward voyage only, the container being returned to lessor at or near destination.

Open container
A container with sides and/or ends of bars, grills, mesh or entirely open, with or without roof.

Open sided container
Doors, shutters or tarpaulin allowing one or both sides to open up completely.

Open top container
Container with tarpaulin roof or solid removable roof that can be loaded and unloaded from above.

Open topped reefer
Open topped container that is temporarily protected by a removable insulated cover.

Open wall container
Container without one or more side or end walls but having at least a base, end structures and a top frame with corner castings.

Overheight cargo
Cargo loaded into an open top container so that the level of the cargo rises above the normal level of the roof struts. This type of stowage can be accepted by operators under certain conditions.

Payload cargo weight
Measurement on which freight is paid.

Pier to house
Transport of containers packed at port of loading and unpacked at an inland destination.

Pier to pier
Transport of containers packed at port of loading and unpacked at port of destination, i.e. use of container restricted to shop operation.

Piggy back
Hauling trailer mounted containers on railway flat cars. Sometimes known as TOFC (trailer on flat car).

Pillow tanks
Collapsible inlets for transport of liquids, free flowing solids, etc., in containers.

Plain flat container
Container base and corner posts, loose stanchions or runners for sides and ends notwithstanding.

Plain van container
Another name for a general purpose container.

Polarstream
The name for a liquid nitrogen refrigeration system.

Polyurethane
Insulation which can be in "block" or "poured" or "frothed" form. Made up of minute cells containing freon gas.

Portainer (crane)
Port (vessel) container gantry crane.

Protim salts
For treatment of timber against wood boring insects.

Quoin
Shaped timber wedge used to secure barrels against movement.

Railtainer (crane)
Railway container gantry crane.

Rating
Maximum permissible combined weight of the freight container and its contents.

Reach stacker
Large fork lift truck with extended lifting and reaching capabilities.

Reefer (or refrigerated container)
An insulated container with provision for controlling the air temperature within the container.

Relative humidity
The ratio (expressed as a percentage) of the amount of moisture in the air to that in saturated air at the same temperature.

Rolling
The side to side rocking movement of a ship.

Ro ro
Roll on roll off. Type of ship that can take containers while still on trailers and other rolling stock.

Scissor lift
Platform device, usually power operated, which can lift a load from ground, or any intermediate level, to container floor height.

Sheathing
Materials forming the outside of roof, sides, ends and doors. These act as restraints to help prevent the main frame from racking.

Shrink (foil) wrapping
Heat treatment that shrinks an envelope of polythene or similar substance around several units, thus binding them into a single whole. May be used to secure items into small presentation packs, or secure packages onto a pallet.

Side door container
Closed container with rear door and at least one side door.

Side loader
A lift truck with the lifting equipment operating to one side for handling containers.

Skeletal trailer
A trailer constructed specifically for the safe carriage of ISO containers.

Skids
Battens fitted beneath stillages, boxes or packages to raise them clear of the floor and allow easy access of fork lift trucks, slings, or other handling equipment.

Sling
Endless rope, wire or strap used for lifting cargo.

Sno flo
Trade name for a liquid COz refrigeration system.

Soft top container
Container with a removable waterproof "tilt". Also known as a top loader or open top.

Solo tank container
Tank for liquids enclosed in container frame.

Special container
Container specially designed and built for carrying a special cargo.

Stacking cone
Fitting piece between two containers (at each corner).

Steel container
Usually has a ribbed configuration, or a double skin construction if used without secondary posts.

Straddle carrier
Truck capable of lifting a container within its own framework.

Stripping
Term sometimes used for unpacking a container.

Stuffing
Term sometimes used for packing a container.

Tank container
Container especially built for transporting liquids and gases in bulk.

Tanolith C
Trade name for copper chrome arsenite solution used in immunizing timber against wood boring insects.

Tanolith U
A fluoride chrome arsenite penta chlorophil solution used for immunizing timber against wood boring insects.

Tare weight
Weight of a container without its cargo.

Terminal
The area where containers are stacked ready to be loaded into the vessel or are stacked immediately after discharge from the vessel.

Thermal conductivity
The quantity of heat (e.g. in British Thermal Units [BTU]) transferred through one inch of material per square foot of surface, per hour, per degree Fahrenheit. Generally referred to in terms of K Factor, which is determined by the equation: Inch K factor = sq. ft., hour, °F.

TEU
Twenty foot equivalent unit.

Tilt
Canvas or other waterproof material used to cover or protect the interior of an open top or open sided container.

TIR
Transports internationaux par la route. Road transport operating agreement reached by European governments and the USA for the international movement of goods by road. Generally permits sealed loads to cross national frontiers without inspection or tariff penalties.

Twist lock
Fitting piece between two containers with locking device (handle).

Two way pallet
Pallet so constructed that the forks of a FLT may gain access from two sides only.

Tyne or fork
Forks of a FLT.

Unit load
A number of individual packages bonded, palletized or strapped together to form a single unit for more efficient handling by mechanical equipment.

Ullage
"Deficiency" of a liquid, i.e. the space not filled but supposed to be filled in a drum, tank, tank hold, tank container etc. Usually the "gap" between the surface of a liquid and the top of the tank, etc.

Vanning
American term sometimes used for packing a container.

Ventilated container
Container with openings in the side and/or end walls to allow the ingress of outside air when the doors are shut.

Waste cube
When cargo does not completely fill or fit the interior of the container due to bad packing, awkward shapes, weight limitations, or lack of cargo.

Contingency Insurance (Seller's Insurance)
A secondary insurance coverage which will protect an insured's financial interest if the primary insurance coverage effected by others does not re¬spond for a covered loss.

Contribution
This relates to situations where more than one party covers the risk. Each party is deemed to be liable for its portion of the loss. If the insured has recovered in full from one insurer, that insurer is entitled to recover from the other insurer that part of the loss which should have been paid by the latter. The term, as used in marine insurance, also applies to contributions paid by the insured in connection with salvage and/or General Average.

CONTRIBUTORY VALUE
The value on which general average contributions are based. It is the net arrived value of the of the interest plus any amount to be made good in general average. To arrive at the contributory value the following should be taken into account:

  • Ship: The assessed sound value on arrival at destination after discharging all cargo, less the estimated cost of repair of any damage.
  • Cargo: The actual net arrived value, which is the gross value less all charges at destination.
  • Freight: The actual gross freight at risk at the time of the general average act less any amounts paid by the insured after the general average act.

Continuation Clause
A clause providing for the continuation of a hull time policy beyond the natural expiry date.

The clause can be used at the option of a hull insured, whose ship is on a voyage at the time the policy is due to expire, but who does not wish to renew the hull policy for a further period of time. The insured, by giving notice to the underwriters before the expiry date of the policy, can continue cover until the ship arrives at her planned destination port.

An additional premium is payable on a pro rata monthly basis for the time the policy is continued.

Convertible Currency
A London market term for any currency other than Sterling, US dollars or Canadian dollars.

COT - Customer's Own Transport
U.K. shipping term. The consignee collects from / delivers to the consolidation point or container yard.

COU
Clip On Unit - Portable refrigeration units. or Central Operating Unit - Body set up to co-ordinate consortium operations in a trade.

Count Bill of Lading
A bill of lading which shows the actual number of units being shipped.

COUNTER-GUARANTEE
An undertaking given by a cargo insured to an underwriter agreeing to reimburse the underwriter in the event that the issue of the underwriter's guarantee to pay a general average contribution results in payment in excess of the amount properly due under the policy.

COUNTERVAILING DUTIES
These are often confused with anti-dumping duties. Countervailing duties are levied against imports considered to be subsidised (see Export subsidy). This in essence involves government support for an export industry which might provide the exporters of one country with an unfair price advantage over local industry. A countervailing duty may be imposed in order to counteract these advantages.

Country Damage
Damage caused by dirt, mud, etc., to commodities before they are shipped.

Cover Note
A non negotiable document evidencing insurance which may or may not indicate the terms of coverage.

Coxswain
a Petty Officer in charge of a ship's boat & crew ( a 'cock' was a small rowing boat)

Cringle
a loop, usually consisting of a metal eye roped to a sail

CRISTAL
Contract Regarding an Interim Supplement to Tanker Liability for Oil Pollution

Crutch
metal fitting that drops into the gunwale of a boat to take an oar see also rowlock

CSC - Container Safety Convention
International convention for safe containers.

CT
Abbreviation used by Shipping companies for Combined Transport

CTD - Combined Transport Document
The Combined Transport Operator's Bill of Lading.

Customs Broker
A firm which specializes in clearing imported merchandise for transit to the interior. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs and arranging inland transport as well as paying all charges related to these functions.

Customs Entry Form
A form required by Canada Customs for all merchandise entering Canada. It indicates country of origin, description of merchandise and amount of esti¬mated duty to be paid before merchandise is released by customs.

Customary Deductions
New for old deductions made by an average adjuster from the cost of repairs for general average damage to a ship over 15 years old. Hull underwriters do not make new for old deductions from claims for repairing damage to the ship, whether they be for GA sacrifice or particular average.

CWE- Cleared Without Examination
Cleared by Customs without inspection.

CY
Currency, or Container Yard - Collection and Distribution point for loaded FCL and empty containers.

C&D - Collection and Delivery
Carriage from/to Customer's premises to / from a Container Freight Station.

C and F (CFR)
Cost and Freight, a sale term under which the consignee makes its own in¬surance arrangements for the goods throughout the period of transit.

c. & i.
Cost and insurance

C.A.D.
Cash against documents

C.A.R.
Contractors' all risks. Constructors' all risks

C.C.
Civil commotions. Cancellation clause. Collecting commission

c.g.a.
Cargo's proportion of general average

C.I.E.
Canadian Insurance Exchange

c.i.f. & e.
Cost, insurance, freight and exchange

c.i.f. & i.
Cost, insurance, freight and interest

c.i.f.c. & i.
Cost, insurance, freight, commission, and interest

C.I.I.
Charted Insurance Institute

C.I.L.A.
Charted Institute of Loss Adjusters

C.L.C.
Consequential Loss Committee

CMI - Comité Maritime International
An international committee of maritime lawyers.

CMR
(Europe) - Conventional relative au contrat transport international des Marchandises par Route
International convention on carriage of Goods by Road

C.O.D.
Cash on delivery

C.P.A.
Claims payable abroad. Contractors Plant Association

C.P.C.
Component parts clause

C.R.
Current rate

C.R.O.
Cancelling returns only

C.V.
Commercial vehicle. Curriculum vitae

c.w.o.
Cash with order

C/N
Cover note. Credit note


D

expand view +/-

D
Delivery. Delivered

DAMAGED VALUE
The actual value on arrival at destination. On hulls this is the value without any repairs taken into account. On cargo the value may be gross or net. Gross damaged value is the value of the damaged cargo after all the landing charges have been paid. Net damaged value is the value before all the landing charges have been paid.

Claims are calculated on cargo by comparing the sound and damaged gross values.

DANDO
Directors' and Officers Liability (U.S.)

Data Logger
Electronic temperature recording device for refrigerated containers.

Davits
On board cranes for hoisting boats or tenders

Davy Jones' Locker
the bottom of the sea.
There are three possible explanations for this term:

  • Davy Jones was possibly a notorious pirate, given to putting his victims over the side
  • In early African American slang in southern USA, a 'duffy' or 'davy' is a ghost, and 'Jones' means 'Jonah'
  • The Hindu goddess of death is called Deva Lokka, close to "Devil's Locker", and then further changed by European sailors to Davy Jones' locker

Dd
Delivered

Dead Freight
Freight rate which is paid on empty space in a vessel when the charterer is responsible for the freight rate of a full cargo. It should be paid before sailing.

Dead reckoning
calculating the position of a vessel from the course steered and the distance run

Deadweight Tonnage
Technically, the term refers to the actual weight of cargo, fuel and stores required to bring the ship down to her loadline marks.
In marine insurance practice, the term refers to the dimensions of a ship used for the purpose of calculating the premium for a hull & machinery policy on full conditions.

Deals (of Timber)
Lengths of timber between 5ft. and 3ft. in length and between 2 inches and 9 inches thick.

Deck Log
Ship's log recording general details concerning the running of the ship, including accidents concerned with ship or cargo.

Deckhead
underside of a deck; nautical term for ceiling

Declaration
Form used by insured in reporting shipments under an Open Cargo Policy when no evidence of insurance is required.

Declivity
The angle of the launching ways at a shipyard.

Deductible
A specific dollar amount, or percentage of the insured value, which will be deducted from all losses recoverable under a policy.

DEFEASIBLE INTEREST
A cargo insurable interest that ceases during the transit of goods.

Deferred Account
A system allowing the shipowner to pay his annual premium by instalments.

Def.
Deferred

Delivery Order
A document authorising delivery to a nominated party of goods in the care of a third party. Can be issued by a Carrier on surrender of a Bill of Lading and then used by Merchant to transfer title by endorsement.

DEMISE CHARTERPARTY
A demise or 'bareboat' charter party arises when the charterer is responsible for providing the cargo and crew, whilst the shipowner merely provides the vessel. In consequence, the charterer appoints the crew, thus taking over full responsibility for the operation of the vessel, and pays all expenses incurred. A demise charter party is for a period of time which may vary from a few weeks to several years.

DEMURRAGE
The sum agreed by charter to be paid as damages for delay beyond the stipulated time for loading or discharging. It should be collected daily by the master or agent.
The term is sometimes used in hull insurance practice to refer to loss of hire money.

Deposit Receipt
A receipt given in respect of a general average deposit payment.

DEPRECIATION
Is loss in value. A percentage of depreciation is assessed in respect of cargo damage to apply to the insured value to ascertain a claim ( see "arrived sound value/arrived damaged value"). With hull insurance when a vessel is unrepaired at the expiry of the hull policy a reasonable allowance is given under the policy for depreciation by reason of the unrepaired damage, but not exceeding the reasonable cost of repairs had they been carried out at the proper time.

Derelict
A vessel that has been abandoned by the crew but has not sunk.

DETENTION
Where demurrage is paid for an agreed number of days, any further delay is termed "detention", in respect of which the shipowner can claim unlimited damages.

Detention or Restraint
Is a prevention during the currency of the risk of the prosecution of the insured transit, the owner of the property not necessarily being deprived of ownership. For the liability of cargo underwriters, there appears to be no distinction between an arrest or embargo by a home or foreign government. An embargo in this context is where the insured is not deprived by a superior authority of possession of property but the property is detained.

DETERIORATION
Loss of quality without the help of an outside agency. Since this is not a fortuity it is not embraced by the term "risk", so deterioration is not covered by an "all risks" policy unless it is specifically included.

Deviation - of a ship's compass
(Of a compass) - compass error caused by magnetism of the vessel

Deviation - Ship
A deviation occurs when a ship is on a voyage and departs from the customary or designated route with the intention of returning to that route to complete the voyage. A cargo policy that is subject to the Institute Cargo Clauses is not affected by deviation. In the case of a hull voyage policy deviation discharges the underwriter from all liability as from the time the vessel leaves the stated or customary course, except where the deviation is excused by s.49 of the MIA, 1906, or the insured gives the underwriter immediate notice of the deviation upon receipt of advices, agrees to any amended terms of cover required and pays an additional premium, if required.

Direct or Held Covered
A condition which requires the insured voyage to be direct from one place to another. If the voyage is delayed en route or if there is a deviation from the direct route, the insurance coverage continues subject to payment of an addi¬tional premium, but only if the insured gives prompt notice of the delay or deviation immediately on receipt of advices, unless the policy provides otherwise.

Disbursements
Expenses incurred by the shipowner in connection with running a ship.

Disbursements Clause
A clause in a policy covering hull and machinery of a ship, which incorporates a warranty prohibiting the insured from effecting additional insurances to include total loss of the ship, other than those listed in the clause. Breach of this warranty is not held covered, and discharges the underwriter from all liability under the hull and machinery policy as from the date of breach of warranty. The clause permits a maximum amount that may be insured in respect of 'disbursements', 'increased value', 'anticipated freight', etc. without breach of warranty taking place.

Disclosure
The duty of the insured and his broker to tell the underwriter every material circumstance before acceptance of the risk.

Displacement Tonnage
This term is chiefly used when referring to warships and other non-cargo carrying vessels. It is the actual weight of water displaced by the vessel when floating at her loaded draught.

Dock Receipt
A form issued by a carrier or his representative as evidence that merchandise was in fact received by the carrier for shipment. Often referred to as a Re¬ceived for Shipment Bill of Lading.

Documents of Title
Documents produced by a consignee as evidence of right to take delivery of goods (eg Bill of Lading).

Dog
A cleat or device for securing water-tight openings

Dog watch
The two-hour watches from 1600-1800 and 1800-2000. i.e. the division of the usual four hours' watch, to make a change of watches; from 4 to 6 and 6 to 8pm.

Door to Door
Refers to merchandise shipped in containers, trailers or vans from the origi¬nal point of manufacture to the final destination. Same as House to House.

Down helm
an order to the helmsman to put the tiller 'down' i.e. away from the wind

Downhaul
a rope pulling downwards on a sail vessel, usually on the tack of a sail

Draught
The depth of a vessel beneath the water, to the lowest part of the hull

Drawback
Repayment of duty upon re-exportation of goods previously imported.

Drogue
a form of sea-anchor, used on boats, lifeboats and lifebuoys

Dumb Barge
A barge that has no means of propulsion.

Dumping
Dumping is evidenced by the sale of imported goods on a foreign market at a price lower than that at which the good is being offered for sale on its own local market. Dumping has the potential to cause serious and unnecessary injury to local industries and is regarded as a source of unfair competition, particularly by the government of the importing country which is under political pressure from local industries.

D. & O.
Directors and Officers

D.C.
Direct costs

D.I.C.
Difference in conditions

D.I.P.
Difference in perils

D.N.O.
Debit note only

D.O.L.
Dock owner's liability or Date of Loss

D.R.C.
Damage received in collision

D.S.D.
Documentary sight draft

D.S.I.
Daily sum insured

D.T.B.A.
Date to be advised

D.V.
Declared value

D/A
Deductible average

D/C
Deviation Clause

D/D
Damage done

D/N
Debit note

D/V
Dual valuation

D/w
Deadweight


E

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Earned Premium
This applies when insurance is terminated before the expiry of the insured period. The earned premium is the premium attaching to the period during which the underwriters have been on risk.

Ebb
the falling tide

EC
European Community

ECG - Export Credits Guarantee
(U.K.) Insurance on goods shipped against non-payment by reason of commercial and / or political risks as arranged.

Echo Sounder
electronic equipment, now found in even the smallest boats, for measuring the depth of water

ECSA
European Community Shipowners Association

ECU
European currency unit

EDI - Electronic Data Interchange
The transfer of structured data from one computer system to another.

EDIFACT - EDI for Administration, Commerce and Transport
Organisation responsible to UN ECE for the development of standard EDI messages for Administration, Commerce and Transport.

EHA - Equipment Handover Agreement
Agreement acknowledging condition signed when taking over Carrier's equipment and returning it, which incorporates terms of contract under which equipment is taken over.

Ensign
A vessel's national flag

Entering Inwards
The reporting of the vessel's arrival in port hy the master at the Custom House. Permission to commence discharging is obtained.

ENTREPORT
A place of transhipment.

Entry Outwards
The reporting of the intention to commence a new voyage by the master at the Custom House.

Permission to commence loading is obtained.

EPIRB
emergency position indication radio beacon

Escalator Clause
A clause allowing for adjustment of the insured value in certain non-marine material damage insurances.

A similar clause can be found in builders risks policies covering ships under construction.

Even keel
= draught forward equals the draught aft

EX GRATIA PAYMENT
Is a payment made by the insurer, where there is no legal liability under the policy. The insurer may make this payment as a sign of goodwill or to accommodate a valued insured. It should be noted that a reinsurer / coinsurer is not obliged to follow an ex gratia payment made by the lead insurer.

EXCESS
The term 'excess' was used for many years in the marine market to denote an amount that had to be exceeded before a partial loss claim attached to the policy. Once the excess was passed the amount of the claim above the amount of the excess was paid.
The term has gradually disappeared in the marine market, to be replaced by the term 'deductible', which has the same effect on partial loss claims.

Excess Liabilities
Insurance to cover the excess amount of liability for general average contri¬butions, salvage charges, sue and labour charges and three fourths collision liability where the full amount is not covered by a hull policy.

Excess Point
Term used in excess of loss reinsurance to determine the point at which the reinsurer comes on risk

Excess Value Insurance
This term was commonly used in the marine market in reference to insurances effected additionally to the policy covering the hull and machinery of a ship. These could apply to insurable interest in respect of ship-owners' liabilities, or additional insurances covering hull interests (eg disbursements). Today, the term 'excess liabilities' is used for the former, and 'increased value' for the latter.

Export subsidy
An export subsidy is a subsidy (sometimes paid in the form of a reduction in income tax) paid to exporters against exports made. The aim of such subsidies is to encourage exports by raising final returns paid to exporters above the level suggested by international prices.

EXPRESS WARRANTY
A warranty that is specified in the policy document, or is attached thereto. A warranty that applies to the policy, but is not expressed therein (eg warranty of legality), is termed an implied warranty'.

Extended Protest
Detailed statement made by the master of a vessel concerning an accident which has become the subject of a court case.

Extra Charges
Expenses incurred in connection with a claim under a policy.

EXTRAORDINARY SACRIFICE
Term used in determining General Average.

Ordinary sacrifice or expenditure is such as a master or shipowner is liable to carry out or incur under his obligations to carry the goods and deliver them in accordance with the contract of affreightment.

The use of spare fuel carried for an auxiliary engine comes in this category.

Extraordinary sacrifice or expenditure is any other sort of sacrifice of expenditure such as cargo or part of the ship burned as fuel or the use of tugs to draw the vessel off a strand. If all the other essentials for general average are present extraordinary sacrifice or expenditure is allowed in general average.

e. & e.a.
Each and every accident

e. & e.l.
Each and every loss

e. & e.o.
Each and every occurrence

E. & O.E.
Errors and ommisions excepted

E. & S.
Excess and surplus (lines) (U.S.)

E.A.R.
Engineering all risks

E.C.G.D.
Export Credits Guarantee Department (UK)

E.C.O.
Extra-contractual obligations

E.D.P.
Electronic data processing

E.E.
Errors excepted

E.E.C.
European Economic Community

E.F.T.A.
European Free Trade Association

E.I.C.
European Insurance Committee

E.M.L.
Estimated maximum loss

E.M.P.L.
Estimated maximum probable loss

e.o.h.p.
Except as otherwise herein provided

E.T.A.
Estimated time of arrival


F

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Factor
An agent employed to sell in his own name (at the agreed commission) goods or merchandise belonging to his principal; his acts being binding in the principal at the instance of third parties.

Fac./Oblig.
Facultative/Obligatory

FAK - Freight AII Kinds
A Shipping Company's charging system whereby freight is charged per container, irrespective of nature of goods, and not according to a tariff.

FANTAINER
Container with built in forced ventilation.

Fathom
a measurement of depth, equals six feet

fch.
Franchise

FCL / LCL
FCL means Full Container Load, LCL means Less than Full Container Load. Container services are built around the general concept that the shipper loads a container at their premises and presents it scaled to the shipping company and that at the other end, the container is delivered to the importer's premises also scaled and loaded. This constitutes FCL

FCL/FCL loaded by shipper, unloaded by consignee
FCL/ LCL loaded by shipper, unloaded by shipping organisation
LCL/FCL loaded by shipping organisation, unloaded by consignee
LCL/LCL loaded by shipping organisation, unloaded by shipping organisation.

FEAR OF LOSS / FEAR OF A PERIL
Insurers are liable for losses proximately caused by an insured peril. Fear of a peril does not constitute a peril so that insurers are not liable for a loss proximately caused by an uninsured peril, even though the loss would not have arisen but for fear of an insured peril.

This principle does not absolve insurers from their liability for sue and labour charges, salvage charges or general average contribution when properly incurred to prevent loss from a factual or imminent peril.

Feeder Vessel
A short-sea vessel used to fetch and carry goods and containers to and from deep sea vessels.

Fender
Rope or plastic object, used to prevent damage to the ship's side when lying alongside another vessel or a jetty

Fetch
the distance which the wind has blown across open water; also to reach a desired destination.

FFI - For Further Instructions
Abbreviation used in Place of Delivery box on a transport document if final destination uncertain at time of shipment, e.g. XYZ Containerbase FFI.

Fiddle
a lip around horizontal surfaces in the living or working areas of a vessel, to stop objects falling or sliding off in a seaswell

FIOS - Free In Out + Stow
Consignor pays for loading, stowing and discharging.

First watch
8pm to midnight

Fix
a locational position found from accurate bearings, or observations of heavenly bodies (height of stars etc. at a certain time of day)

FIXED OBJECT
Term used in respect of liability insurance on hulls to differentiate between "collision", which is contact between two or more vessels, and ordinary contact by the ship with anything other than a vessel. In this way anything other than a vessel is embraced by the term "objects".

"Fixed objects" are those which do not move, such as piers and wharves, including fastened buoys. Liability to objects is not covered by the collision clause in a hull policy.

FLAG OF CONVENIENCE
For the purpose of registration under a National flag a vessel must comply with and maintain certain standards regarding equipment, fire and life saving appliances, crew’s quarters, victualling and safety regulations.

These standards are less stringent under some flags. The flag being the National flag of the Country with which the vessel is registered. Where a vessel registers with a Country which applies relaxed regulations purely for the purpose of attracting registration, such flag is called a "Flag of Convenience".

Flare
Outward spread of the topsides near the bow of a boat; also - a pyrotechnic signal used to call attention.

Flashing
Flashing navigational light, with a period of light less than the period of darkness

FLATRACK
A container consisting of a base and two ends but no sides or roof.

FLEXITANK
Polythene bag to allow bulk liquids and powders to be carried in G.P.s (General Purpose Container)

Flood
the rising tide

Flotsam
Cargo cast or lost overboard and recoverable by reason of its remaining afloat.

FMC - Federal Maritime Commission
US Federal Authority governing sea transport.

Foot
the bottom of a sail

FORCE MAJEURE
"Some physical or natural restraint which prevents an intention being carried out and which is outside the control of the person who had the intention. The term thus includes Acts of God , strikes, war and legislative or administrative intervention." Witherby's Dictionary of Insurance, 2nd Edition.

Force Majeure is often a term used in liability policies. From the definition above, Force majeure is wider than Acts of God

Fore and aft
the vessel's major, or longitudinal axis i.e. lengthwise of a ship

Fore-triangle
triangle formed by the forestay, mast and deck

Forebody
That part of a ship which is forward of midships.

Forecastle
Raised part at the bow of the ship.

Forefoot
The lower part in the stem of a ship that curves to meet the keel.

FOREIGN JURISDICTION CLAUSE
A clause agreed by underwriters and attached to the policy, that provides for the policy to be subject to legal jurisdiction of the country named in the clause. This will, normally, take precedence over the English jurisdiction clause in the MAR policy form; but it is customary for the latter to be deleted in such cases to avoid confusion. It does not take precedence over the English law & practice clause in the Institute clauses.

Forestay
A wire support to the foreside of a mast. A stay which runs from stem to mast.

FORTUITY
An accident or any loss or damage which is not an inevitability.

Foul
Opposite of clear e.g. 'foul anchor' ; 'foul bottom'

Foul Bill
A bill of lading that has been claused to show that the goods were not received in a sound condition.

Fractional Rig
a rig of a sail that does not extend to the masthead (i.e. not a masthead rig)

Franchise
Like a deductible, but if the amount of the merchandise is met or exceeded, the loss is paid in full.

Frap
to bind together

FREE IN AND OUT
Chartering term whereby the charterer of a vessel under voyage charter agrees to pay the costs of loading and discharging the cargo.

FREE OF CAPTURE AND SEIZURE
The marine insurance term for "excluding war perils". The abbreviation is F.C. & S. and the standard clause used is generally referred to as the F.C. & S. clause. At an Extraordinary General Meeting of the members of Lloyd’s in June 1898 a resolution was passed to incorporate the F.C. & S clause in all Lloyd’s marine cargo policies and this became effective on July 1898. At a similar meeting on 25th January 1899 it was agreed that thenceforth all agreements (which include slips, of course) shall be deemed to be subject to the F.C. & S clause unless the contrary has been specified in the slip or agreement and agreed by the insurer.

The F.C. & S. clause is now incorporated in all marine policies and all sets of marine clauses and is a paramount clause in a hull policy. Its purpose is to make it clear that the policy excludes losses proximately cause by war, hostile acts or warlike attempts, whether or not there has been a declaration of war. The wording of the clause makes it clear that if the loss is proximately caused by a marine peril such loss is not excluded by the clause even if the vessel, or any other vessel involved in the accident, is engaged in a warlike operation.

In cargo insurance the perils excluded by the clause may be reinstated in the policy by agreement with the insurer and payment of a scale additional premium. In addition to the reinstatement other war perils are incorporated into the policy and it is customary to incorporate strikes risks at the same time. Hull war risks are customarily insured under a separate policy. There are standard sets of war clauses and strikes clauses for both hull and cargo risks.

Free of Particular Average, American Conditions (FPAAC)
Average clause which limits recovery of partial losses to those caused by fire, stranding, sinking or collision.

Free of Particular Average, English Conditions (FPAEQ)
Same as FPAAC except that the partial losses referred to are recoverable if the vessel has stranded, sunk, burned, been on fire or in collision, regardless of whether such losses were actually caused by any of these perils.

Free on Board (FOB)
Goods sold under such terms are at charge and risk of the seller until on board shipping vessel (other terms include "Free Alongside Steamer," "Free on Rail," etc.)

Free Surface Effect
The free surface effect is where liquids are free to flow within its compartment. Particularly dangerous in open holds such as within the vehicle decks of ferries.

Freeboard
This is the height between the deck line and the Plimsoll mark (or Load) line i.e. the distance from the waterline to the deck edge.

Freeing Port
An opening to allow water from the deck of a ship to flow over the side.

Freight
For insurance purposes, the term 'freight' relates to the remuneration received or receivable by a carrier for the carriage of goods, and can include the profit he derives from the carriage of his own goods.

Where freight is paid in advance by the shipper, on a non returnable basis, the insurable interest is vested in the shipper and is normally embraced within the insured value of the goods.

Where freight is paid on 'outturn' of the goods at the destination port, the insurable interest is vested in the carrier (shipowner or charterer).

In shipping practice, the term freight maybe used to define the goods carried in transit. Thus, personnel involved in arrangements for such transit may be termed 'freight forwarders'. It is commonplace to hear goods referred to as 'freight' in regard to rail carriage, air carriage, etc.

Freight Contingency
The insurable interest of a consignee who has paid freight on goods when delivered over the ship's side, but where the goods are still exposed to peril until they arrive at the final destination.

Freight Forwarder
Firm specializing in arranging transport of merchandise and completing documentation required for the orderly transport of merchandise. Occasion¬ally, they will take merchandise for the purpose of packing or consolidating with other cargo for export to the same country.

Freight Prepaid / Freight Collect
Freight Prepaid means freight paid by shipper prior to release by shipping company of negotiable bills of lading. Freight Collect means shipping company collects freight from consignee or his representative. This usually has to be arranged in advance, and is not available to some destinations.

Freight Rate
The charge for transporting goods by water.

Freight Ton
The tonnage on which freight is charged (also called B/L Ton).

Freight Waiver Clause
The underwriter insuring hull and machinery of a ship is entitled, on payment of a constructive total loss, to take over the ship, arrange to deliver the cargo and retain any freight earned thereby. The 'freight waiver clause' in the hull policy conditions waives the right to earned freight. Prior to publication of the 1983 hull clauses this clause was commonly termed the 'freight abandonment' clause.

Freshen
a strengthening of the wind

FRUSTRATION OF ADVENTURE
Frustration of Adventure is brought about by a circumstance whereby a ship or goods cannot reach the contemplated destination but remain undamaged and are not lost to the owner. Claims based on frustration of the voyage or adventure are normally excluded from policies covering war risks and strikes risks.

Detention or restraint is a prevention during the currency of the risk of the prosecution of the insured transit, the owner of the property not necessarily being deprived of ownership. For the liability of cargo underwriters, there appears to be no distinction between an arrest or embargo by a home or foreign government. An embargo in this context is where the insured is not deprived by a superior authority of possession of property but the property is detained.

Full Value Declared (FVD)
A notation on an air waybill which indicates that a specific value has been declared to the carrier for carriage of the merchandise.

F. & A.P.
Fire and allied perils

f.a.a.
Free of all average

F.A.R.
Free of accident reported

F.C.A.R.
Free of claim for accident reported

F.I.I.C.
Fellow of the Insurance Institute of Canada

F.C.I.L.A.
Fellow of the Chartered Institute of Loss Adjusters

F.C.O.D.
Fire, collision, overturning and derailment

F.C.R.
Forwarding agents' certificate of receipt

F.C.S.R.C.C.
Free of capture, seizure, riots and civil commotions

F.C.S.S.R.C.C.
Free of capture, seizure, strikes, riots and civil commotions

F.C.T.
Forwarding agents' certificate of transport

F.C.V.
Full contract value. Full completed value

F.D.
Fire break door

F.D.D.
Freight, demurrage and defence

F.D.O.
For declaration purposes only

F.E.A.
Fire extinguishing appliances

F.G.
Fidelity guarantee

F.G.A.
Foreign general average. Free of general average

F.G.U.
From the ground up

F.I.A.
Full interest admitted

F.L.E.
Fire, lighting and explosion

F.O.C.
Fire Offices' Committee. Free of claims. Free of charge. Free of cost. Flag of convenience

F.O.D.abs.
Free of damage absolutely

F.O.M.
Flag, ownership or management

F.P.A. u.c.b.
Free of particular average unless caused by

F.R.C.
Free of reported casualty. Fire resisting construction

F.R.C.C.
Free of riots and civil commotions

F.R.O.
Fire risk only

f.r.o.f.
Fire risk on freight

F.S.R. & C.C.
Free of strikes, riots and civil commotion

f.w.d.
Fresh water damage

F/A
Fire and accident (Insurance)


G

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GA in Full Clause
A clause in a cargo policy whereby the underwriter agrees to pay general average contributions in full even though the contributory value may be greater than the insured value.

Garboard Strake
The shell plating of a ship that is next to the keelplate.

GATT - General Agreement on Tariffs and Trade
An international multilateral agreement embodying a code of practice for fair trading in international commerce.

GENCON
General charterparty for no particular trade. Usually in the negotiations between the hirer and the shipowner start with the GENCON form and adapt the terms to their circumstances.

General Average
Loss arising through a voluntary sacrifice of any part of the ship or cargo, or an expenditure, to safeguard the ship and the rest of the cargo.

General Average Bond
Document required of cargo owners, after a GA loss, obtaining their agree¬ment to pay any contribution that may become due.

General Average Contribution
Such losses or expenditures are contributed to by all the interest at risk on the basis of their respective values.

GENERAL AVERAGE DEPOSIT
A deposit paid by a consignee in return for delivery of the goods where such goods are subject to general average contribution.

GENERAL AVERAGE DISBURSEMENTS
Expenses paid by the shipowner as part of a general average act.

Such expenses are recovered by the shipowner from the general average fund. Unlike GA sacrifice, there is no direct liability on bull underwriters to reimburse the insured for GA disbursements.

The disbursements will he included in the final GA adjustment and incorporated in the GA contribution, underwriters paying this insofar as it is recoverable under the policy.

GENERAL AVERAGE FUND
The total arrived at by adding together general average expenditure and the value of property sacrificed in a general act, plus costs of its adjustment.

General Average Guarantee
Given by cargo underwriters, after a GA, agreeing to meet their insured's liability for contribution.

GM
GM = metacentric height (measure of a vessel's statical stability)

GO - General order
(U.S.) Issued by U.S. Customs as notice of intention to seize goods.

Go about
to tack i.e to turn in going forward into the wind, and bring the wind on the other side of the sails

GoM
= fluid metacentric height (taking account the effect of free surface). Measurement used in ship stability calculations.

Gooseneck
fitting that holds the boom to the mast

Goosewinged
running before the wind, with the foresail on one side and the mainsail on the other

GPS
= global position system. Satellite-based navigation.

Grain Certificate
A certificate to show that the regulations have been complied with when carrying a grain cargo.

GROSS TONNAGE
This is the volume of the interior of the vessel including all spaces which are permanantly closed in (but excluding the double bottom).

This is calculated not by weight but by space; one ton being represented by 100 cubic feet or, where metric measurement is concerned, 1000 cubic centimetres per ton.

Ground tackle
anchor gear

Groupage
Consolidation of several LCL consignments into a container.

Groupage Agent
One who consolidates LCL consignments to offer to a Carrier as an FCL.

Guaranteed Freight
Freight which is not prepaid but which is payable whether or not the mer¬chandise arrives at the final point of destination.

Gunwale
the upper edge along the side of a boat

Guy
A rope used to control a derrick or spar. In a sailing yacht this usually refers to the spinnaker guy, which adjusts the trim of the spinnaker pole

Gybe
Altering from having the wind on one side of the sailing vessel to another, by putting the boat's stern through the wind (as distinct from tacking)

G.A.D.
General average deposit

G.A.D.V.
Gross arrived damaged value

G.A.L.
General average loss

G.A.S.V.
Gross arrived sound value

g.b.o.
Goods in bad order

G.I.T.
Goods in transit

G.L.
Germanischer Lloyd

G.m.b.
Good merchantable brand

G.m.q.
Good merchantable quality

G.M.T.
Greenwhich mean time

G.O.R.
Gross original rate

G.R.O.
Ground risks only

G.T.P.
General third party (liability insurance)

G.W.P.
Gross written premiums


H

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HAGUE RULES 1924
Following an International Maritime Law Conference in Brussels in 1922 a set of rules was agreed to establish the rights and immunities of carriers in respect of the carriage of goods by sea. Many of the countries agreeing to the rules later incorporated them in statutory Acts, such as the UK Carriage of Goods by Sea Act 1924.

Halyards
ropes by which sails or flags are hoisted

Hank
Fitting for attaching the luff of a sail to a stay

Hard
A place for beaching and holding / storing boats out of the water, often in a cradle, and usually these days a concrete compound or similar

Hard-a-port, Hard-a-starboard
Helm order to use the maximum to steer in the required direction

Haulier
(U.K.) A road transport operator (a trucker in U.S.)

Hawser
a small steel cable; a large rope

Head sea
A sea from ahead (i.e. waves advancing to the bow of the vessel)

Header
wind shift that brings the wind further ahead, opposite to a Lift

Heads
Narrow entrance to a harbour; or marine toilet or lavatory

Headsail
A sail set forward of the mast

Heave-to
To stop, or reduce speed with the vessel's bow to the wind

Heavy Lift
A unit of cargo which cannot be lifted by the normal ship's lifting gear.

Heel
= the angle of tilt of a vessel , caused by external forces.

Held Covered
A provisional acceptance of risk, subject to confirmation that cover is needed at a later date. Where applicable to an existing insurance, coverage is conditional, in practice, on prompt advice to the underwriter as soon as the insured is aware of the circumstances to be held covered coming into effect, and a reasonable additional premium is payable if the risk held covered comes into effect.

HIGH SEAS
Parts of oceans and/or seas which are not within any territorial waters and are therefore beyond the jurisdiction of any State.

Hogged
A hogged ship is one that is held amidships with both ends sagging lower than the centre.

Hour glass
Spinnaker sail twisted in the middle, so that the wind fills the top and bottom parts

House Air Waybill
An air waybill issued by a freight forwarder for an air shipment.

House to House
See Door to Door.

Hove-to
= when a vessel is slowed or stopped and lying at an angle to the sea which affords the safest and most comfortable ride

Hub & Spoke
The way of describing modern containerised operations whereby large containerships call at a restricted number of major (hub) ports to or from whence containers are carried to/from minor ports by feeder services (spokes).

H. & M.
Hull and Machinery

H.G.V.
Heavy goods vehicle

H.N.S.
Hazardous and noxious substances

H.P.
Horse-power

H.P.R.
highly protected risk (U.S.)

H.W.D.
Heavy-weather damage

H/C - High Cube
Container 9 ft 6 inches high instead of usual 8ft 6ins.

H/H - Half Height (container)
An OT (Open Top) container only 4ft 3ins high.


I

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IATA
International Civil Air Transport Association

ICC
Institute Cargo Clauses. There are three basic sets of these clauses (A, B and C). The (A) clauses cover all risks, subject to specified exclusions. The (B) and (C) clauses cover specified risks, subject to specified exclusions.

ICD - Inland Clearance Depot
A container facility with customs clearance facilities.

ILU
Institute of London Underwriters

IMDG Code - International Maritime Dangerous Goods Code
The IMO recommendations for the carriage of dangerous goods by sea.

IMO - International Maritime Organisation
The UN Body charged with the duty of making safety and anti-pollution conventions and recommendations concerning sea transport.

IMPLIED WARRANTY
A warranty that is not expressed in the policy specifically but which is understood by both parties to be incorporated in the contract. An implied warranty must be strictly complied with and in the event of a breach of the warranty the insurer is discharged from liability as from the date of the breach, but the insurer may waive the breach or the breach may be excused by Statute.

The insurer is still liable for claims in respect of losses, by insured perils, occurring before the breach. The two main implied warranties are seaworthiness of the vessel and legality of the adventure.

IN PERSONAM
Legal action against a person.

IN REM
Legal action against an object or the owner thereof (eg action naming the ship).

Inchmaree Clause
(So-called for a famous legal decision involving a vessel of that name) Covers losses resulting from a latent defect in the vessel’s hull or machinery and losses resulting from errors in navigation or management of the vessel by the master or crew.

INCOterms
A set of ICC (International Chamber of Commerce) terms offered for optional use in trading contracts and intended to reduce misunderstandings in the meaning of international trading terms.

Increased Value (Cargo)
A clause in a cargo policy which provides that, where both an underlying policy and an increased value policy cover the same goods for the same transit, the insured values expressed in both policies shall be aggregated; so that the sum insured by each policy shall be deemed to he part of the whole. The intention is that, where both policies settle a claim, any recoveries in respect of that claim are shared between the underwriters subscribing both policies.

Increased Value - Hull
An insurance effected on a hull interest (e.g. "disbursements") to provide additional indemnity to that provided by the insured's hull & machinery marine policy in event of a total loss of the insured ship.

The H & M policy incorporates a warranty which restricts the amount that can be insured in an increased value policy.

INDEMNITY
The making good of a loss to the insured by financial payment. It does not include any profit to the insured in its pure sense but may, in practice, embrace some profit by agreement as in the case of cargo "Valued Policies".

Indent
An order for the supply of goods.

Indirect Damage
Damage caused by an insured peril but not proximately caused thereby.

Inevitable Loss
A loss which will happen and which is not dependent on a fortuity. This is not an insured peril, nor can it be a general average loss.

INFESTATION
Infested with vermin. Unless the policy specifically includes this risk it is excluded from the policy by the Marine Insurance Act

Inherent Vice
A quality existent in a cargo which produces damaged to the cargo without the assistance of an outside agent and by its own action. The perishable nature of fruit and spontaneous combustion is inherent vice. It is always excluded by the insurers of the cargo because of its inevitable nature.

INMARSAT
International maritime satellite system

Institute Cargo Clauses
Standard insurance conditions, published by the Institute of London Underwriters, for policies covering goods in transit overseas.

Institute Clause
A standard clause published by the Institute of London Underwriters.

Institute Of London Underwriters
An association of Company Underwriters representing the Companies which are members of the Institute. The Institute is controlled by a Committee elected from its members. The purpose of the Institute is to further the interests of insurance by co-ordinating facilities regarding wordings, clauses and conditions and to find grounds for common agreement on problems affecting the insurance market. Principally the Institute concentrates on marine business.

Committees are formed which include Lloyd’s Underwriters as well as members of the Institute to decide on matters affecting the whole market and to make recommendations to the market based on their findings. The Institute provides facilities for these Committees to meet. The Technical and Clauses Committee and The Joint Hull Committee are two such Committees. the "Returns Bureau" (The Joint Hull Returns Bureau) operates under the auspices of the Joint Hull Committee for the benefit of the whole market and authorises "lay up" returns for both Lloyd’s and Company Underwriters. In addition to its services to insurance, the Institute administers a Policy Signing Office (now joined with Lloyds) and a "Claims Payable Abroad" service on behalf of its member Companies.

Institute Time Clauses
Standard insurance conditions, published by the Institute of London Underwriters, for policies covering ships for a period of time.

Institute Warranties
A phrase, if used in the London market, denotes a set of express warranties, published by the Institute of London Underwriters, for use in hull & machinery policies. The set comprises five locality warranties and one trade warranty; the latter relating to the carriage of Indian coal as cargo. In event of breach of any of the warranties, the insured is held covered by the breach of warranty clause in the Institute hull clauses.

Insurable Interest
The interest one has in relation to property exposed to peril whereby one may lose financially by the loss of, or damage to, such property or may incur a liability in respect thereof. A person who effects a marine insurance contract without an insurable interest or a reasonable expectation of acquiring such interest is guilty of an offence under law.

By most countries' marine insurance laws, no person is allowed to insure unless he has an insurable interest in the adventure, that is, he must stand to lose something if the property at risk is lost, damaged or detained or he may incur liability in respect of the property or suffer because it fails to arrive on time.

With marine cargo claims, it is important to establish who had the insurable interest at the time of loss.

INSURABLE VALUE
In practice the insured value is agreed and is conclusive. If the policy is unvalued it is necessary to know how to calculate the insurable value; that is, the maximum amount which may be insured where a policy has no agreed value.

Basically, the insurable value of a ship is the actual value of the ship at commencement of the risk including machinery, fittings etc., fuel stores, outfit, wages, disbursements and insurance premiums.

On cargo the insurable value is the cost of the cargo plus freight and insurance charges.

On freight or any other interest the insurable value is the amount at risk of the insured, plus insurance charges.
In practice all hull and cargo policies are valued so that the above is seldom needed.

Insured Value
Usually calculated by adding the invoice cost of the goods, guaranteed freight, other costs, and the insurance premium plus a percentage, commonly 10%. This usually represents the landed value.

INTEGRAL
Refrigerated container with own machinery

INTEREST ON RECOVERIES
When a claim is paid to the insured the insurer is subrogated to the rights of the insured in respect of the property. He may recover from third parties, responsible for the damage, amounts by way of damages up to the amount of claim paid to the insured.

If the period of time which elapses between the payment of the claim and the recovery to the insurer is considerable it may be agreed that interest is payable and may be added to the amount of the recovery. It may be provided in the policy that interest is shared between the underwriter and the insured when there is a period of delay between the time the accident occurred and the time the claim is paid to the insured.

Interstate Commerce Commission (U.S.)
The U.S. governmental body to regulate interstate trade.

Invoice
A document issued by the seller to the buyer, which gives detail of merchan¬dise sold, number of units being shipped, per unit cost and the terms of sale.

Inward Charges
Pilotage and other expenses incurred on entering port.

Irons
A sailing vessel is in irons when stationery, head into the wind, and unable to pay off on to either tack

Irrespective of Percentage
This term was often seen in cargo insurance contracts when the SG policy was in use. Its effect was to make claims payable without reference to the FPA warranty or the franchise expressed in the memorandum in the policy form.

With the abrogation of the SG policy for cargo insurances, the term has fallen into disuse in many marine insurance markets.

ISM - INTERNATIONAL SAFETY MANAGEMENT
The ISM Code was developed by the International Maritime Organization in the early 1990s and was adopted as a Code in May 1994 as Chapter IX to the 1974 International Convention for the Safety of Life at Sea, otherwise known as the "SOLAS Convention".

On 1 July 1998 when Chapter IX of the SOLAS Convention came into operation, compliance with the ISM Code became mandatory.

Under Regulation 2 of the SOLAS Convention, the ISM Code will apply to all ships irrespective of when those ships were constructed, with the scope and date of application being dependent on the type of ship.

ISO - International Standards Organisation
International Organisation of National Standard Bodies responsible, inter alia, for setting standards for container construction.

Isophase
A navigation light which flashes with equal periods of light and darkness

I.A.R.
Industrial all risks

I.B.C.
Institute Builders Risk Clause (marine)

I.B.N.R.
(losses) incurred but not reported

I.B.N.R.P.R.
Incurred but not properly reported

I.C.A.O.
International Civil Aviation Organisation

I.C.C.
Institute Cargo Clauses. International Chamber of Commerce

I.F.C.
Institute Freight Clause

I.H.P.
Indicated horse power

I.M.C.O.
Inter-Government Maritime Consultative Organisation

I.M.I.U.
International Marine Insurance Union

i.o.p.
Irrespective of percentage

I.P.R.C.
Institute Port Risk Clause

I.V. or I/V
Increased value. Insured value. Invoice value

I.Y.C.
Institute Yacht Clause


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Jason Clause
A clause in a contract of carriage relating to liability of the shipowner under the US Harter Act in disputes concerning general average.

A clause appearing in contracts of affreightment where disputes may be subject to American Law. By the Harter Act 1983 the shipowner is not liable for faults in navigation or management provided he has exercised due diligence to make the vessel seaworthy. Nevertheless he could not claim any contribution from the cargo owner for general average expenditure or sacrifice which resulted from faulty navigation or mismanagement. Carriers, therefore, introduced a clause into contracts of affreightment whereby the cargo owners agreed to pay such contributions.

The case of the vessel "Jason" in 1912 tested the validity of the clause, and the present clause, the "New Jason Clause", provides that the expenditure or sacrifice must not result from lack of due diligence by the shipowner for the cargo owner to be liable for general average contributions.

Jerque Note
A document given to the master by the Customs after the inward cargo is discharged and the vessel has been rummaged.

Jetsam
Cargo or goods which sink when jettisoned. The term applies also to such goods when washed ashore.

Jettison
Throwing the cargo or ship's property overboard to save other property from a common danger.

Jib
Triangular sail, forward of the mast

Joint Cargo Committee
A group of London company underwriters and Lloyd's underwriters who meet to discuss matters relating to cargo insurance and to make recommendations to the cargo insurance market.

Joint Cargo Survey
When there is some question of carrier's liability it is often necessary for a surveyor appointed by the cargo owner to arrange a survey with the surveyor appointed by the carrier. This is to enable the damage and cause to be established and agreed by both surveyors which avoids any dispute over the facts when claiming the liability of the carrier.

Joint Hull Committee
A group of London company underwriters and Lloyd's underwriters who meet to discuss matters relating to hull insurance conditions and rating structures.

Jones Act 1920
An Act passed by the U.S. Congress in 1920 which provided that a seaman injured in the course of his employment as a result of the negligence of the shipowner, master or fellow crew member, could recover damages for his injuries.

Jurisdiction Clause
A clause in a policy that specifies the country in which any court action relating to the policy must be pursued.

Jury
At sea, a makeshift

Jury Mast
A temporary mast.

J. & W.O.
Jettison and washing overboard

J.H.C.
Joint Hulls Committee


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Kedge
a light anchor, or second anchor

Kicking strap
tackle to hold down the boom on a sailing vessel, and reduce twist in the sail

King spoke
the spoke of the steering wheel that is upright when the rudder is centred

Kingpost
A vertical mast that supports a derrick.

Knock For Knock
The principle of single liability applied between insurers. Where two vessels are in collision the principle could be applied, although in marine insurance practice this is seldom so.

The expression is more common to motor insurance where under this principle, each insurer bears the cost of repairing the property which he insures, to the extent that it is covered by the insurance, without seeking to recover the cost from the insurer of the other property involved in the accident.

Knocked Down Condition
Goods (eg vehicles) dismantled for transit. Similar to CKD - Completely Knocked Down.

Knot
a nautical mile, 6080 ft. one nautical mile per hour

K&R
Kidnap and ransom (insurance)

K.K.
Knock-for-knock


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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.

  1. The most common form of the clause excludes claims for lost or damaged labels and limits the insurer’s liability to the cost of re-labelling and repacking the goods.
  2. 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.

Lagan
Cargo thrown overboard, but buoyed so that it may he recovered.

Laker
A vessel specially constructed for navigation in the waterways of the Great Lakes and canal systems of North America.

Landed Value
Wholesale market value at the point of destination on the final day of discharge.

Landfall
First sight of land, approaching from seaward

Landing Charges
Charges payable on cargo at the port of destination. These include expense of unloading, temporary warehousing, duty and freight, if this is payable at destination. Particular average claims are calculated on the gross value which is the actual value of the cargo when sold or delivered at destination and therefore includes landing charges. The net value of goods is the gross value less the landing charges.

In the case of general average or salvage it should be noted that the landing charges would not be paid if the goods did not arrive at the destination port, hence they have not been saved by the general average or salvage act. The adjustments for general average or salvage contribution must, therefore, be calculated on net values.

Lashing
securing by rope

Latent Defect
A hidden flaw or defect in the construction of the ship which is not readily discernible by a competent person using reasonable skill in an ordinary inspection.

Lay-up Return
Part of the annual premium on a ship time policy paid back to the assured by the underwriters because the ship has been laid up and not exposed to full navigational risks for a minimum period, usually not less than 30 consecutive days.
Such return is not paid until the natural expiry date of the policy and is forfeit if the vessel becomes a total loss before such date.

LAY DAYS
Days allowed by charter for loading or discharging cargo. The term is applied, also, to the days a ship occupies a dry dock.

Lazy
Sailing term, meaning 'extra' or 'spare'

Lead line
Marked line of rope, weighted by a lead line, for measuring the depth of water. (Often the lead line had a ball of wax on the bottom side, so the crew on board the ship could tell the composition of the sea bottom).

Leadage
The cost of transporting coal from colliery to place of shipment.

Leading marks / lights
Marks or lights, which when brought into a line of sight, indicate channel or best navigable water

Leakage
Ordinary leakage is the natural loss expected to occur in liquids by reason of evaporation, soaking into the container or other natural causes. If there is a loss of liquid cargo where the container is intact and where no peril has operated, this is usually due to ordinary leakage.

Lee shore
Shore on to which the wind is blowing

Leech
The trailing (aft) edge of a sail

Leeward
The side of the vessel further from the wind (opposite to windward).

Leeway
The sideways movement of a vessel, blown by the wind

Legal Expenses
It is the duty of a cargo owner to claim against the carrier for damage for which the carrier is liable and if, with the insurer’s consent, a law suit is pressed the legal expenses so incurred are payable by the insurer. The legal expenses in defending a claim made against the insured are also paid by the insurer if they are for the purpose of minimising a loss recoverable under the policy, such as would arise under the collision clause in a hull policy.

Legality Of The Adventure
There is an implied warranty of legality in every marine insurance contract whereby the adventure must be lawful at commencement and must be legally prosecuted throughout. A breach of this warranty discharges the insurer from liability as from the date of the breach. This warranty of legality is specified in the UK Marine Insurance Act.

Letter of Credit
Method of payment between buyer and seller. The buyer opens a Letter of Credit in favour of the seller at his local bank by depositing the amount of the purchase price and dictating certain documents which the seller must present in order to obtain a payment. The Letter of Credit will be sent to a bank in the vicinity of the seller and upon presentation of the documents called for, the local bank will release payment.

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.

Lien
A lien is a legal right whereby a person may prevent another from taking possession of property until the other person has satisfied a liability due to the person with the lien.

A shipowner has a lien on cargo in respect of which a general average deposit is payable. A salvor has a maritime lien a salved property in respect of the salvage award due to him. A carrier has a lien on cargo for which freight is due. A broker has a lien on a policy for unpaid premiums.

Lift
a wind shift allowing a sailing boat to point higher (i.e. nearer to the intended direction) - opposite to a 'header'. Also, a rope that supports a spinnaker pole

Light Dues
Moneys collected by the U.K. Customs on behalf of Trinity House for the maintenance of lighthouses and buoys. Dues are levied on vessels according to their net registered tonnage.

Lighterage
The price paid for loading or unloading ships by lighters or barges.

Limber Hole
A drainage hole in a ship.

Limited Terms
An insurance expression meaning that the policy gives less cover than a policy on full conditions (eg total loss only).

Line Slip
A signing slip issued off a long term cover.

Liner
Vessel plying a regular trade/defined route against a published sailing schedule i.e a ship on a regular schedule calling at specified ports.

Liner Terms / Berth Terms
A liner (or berth) term shipping rate indicates that the shipping company will organise stevedoring onto and out of the ship.

This is the standard type of freight rate for most ships picking up general cargo.

It particularly applies to any containerised cargo but not always to bulk-break (loose) cargo and therefore an exporter / importer should check this with shipping / forwarding agents.

Liquidation (of a company)
If a company is in liquidation then it is in the course of being wound up and the assets sold to defray the debts.

A liquidator is a person appointed to carry out the winding up of a company. The duties of a liquidator are to realise the assets and the property of the company, to pay its debts and to distribute the surplus, if any.

See Receivership. Liquidation will fall within "insolvency or financial default of exclusion cl;ause 4.6 of ICC(A).

List
Angle of heel of a vessel in the water, usually due to a vessel stability problem i.e. the angle away from the usual 90º upright floating position.

Lloyd's Agents
Persons or companies appointed by the Corporation of Lloyd's and stationed in most world ports. One of their many functions is to provide a surveying service, safeguard Lloyd's interests and report the movements and losses of ships.

Lloyd's Broker
An intermediary who negotiates insurance contracts with Lloyd's underwriters on behalf of his clients, the assured. For a broker to be admitted as a Lloyd's broker he must satisfy the Committee of Lloyd's that he is a suitable person to become a Lloyd's broker.

Only Lloyd's brokers and their nominated substitutes (holding a valid Lloyd's security pass) are permitted to enter the underwriting room at Lloyd's to transact business with underwriters.

Lloyd's Register Of Shipping
An independent non-profit-making Society. It undertakes surveys and classification of vessels; also produces various annual publications.

Lloyd's Rep.
Lloyd's Law Reports

LMX
London Market Excess-of-loss

LO-LO - Lift-On/Lift Off
A containership onto which and from which containers are lifted by crane (as opposed to Ro-Ro).

Load Line
The Load Line, sometimes called the Plimsoll Line or "marks", indicates the depth in the water down to which a ship may be loaded; the position of these marks is governed by international convention and is calculated by a Classification Society surveyor.

Location Clause
A clause in a cargo insurance contract limiting insurance cover at any location during transit when the goods are not on the oversea vessel. The intention is to restrict accumulation of risk in one location, and normally applies to open cover conditions.

Loom
[of a light]: reflection in the sky; or the inboard end of an oar

LOP
Loss of profits

Loss Of Specie
A change in the character of cargo which, in insurance terms, is effectively 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. An example would be cement which when immersed in seawater becomes concrete.

Lost Of Not Lost
The provision appears in most marine policies automatically. The expression means that the risk attaches to the policy even though at the time of acceptance by the insurer the property may have been lost. The acceptance by the insurer on these terms is conditional on the insured advising the insurer of any known loss prior to acceptance. The insured cannot acquire an insurable interest after loss if he is aware of the loss, so that he cannot insure a known loss, even by advising the insurer, if he had no interest at the time the loss occurred. The purpose of the provision is to facilitate the continuance of insurance cover on goods as the title changes hands and so that the insured shall not be prejudiced by a loss of which he is unaware at the time of effecting the insurance.

Luff
To luff: to sail closer to the wind (sometimes the sails 'flap')

Lump Sum Freight
A fixed freight rate, regardless of how much cargo is loaded.

L.A.U.A.
Lloyd's Aviation Underwriters' Association

L.D.P.I.
Latent defects protection insurance

L.H.A.R.
London, Hull, Antwerp or Rotterdam

L.J.
Lord Justice

l.n.y.d.
Liability not yet determined

L.O.C.
Letter of credit

L.R.
Lloyd's Register

L.R.M.C.
Lloyd's refridgeration machinery certificate

L.S.
Livestock, Locus siggilli (place for seal)


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Machinery Damage Additional Deductible Clause
An Institute clause available for use in a policy covering hull & machinery that provides for an additional deductible to be applied to claims for damage to machinery which is attributable to negligence of master, officers or crew.

Made Good
The sums paid to a general average fund to make good losses incurred by the general average act.

Malicious Damage Clause
A clause published by the Institute of London Underwriters for use in a cargo policy that is subject to the Institute Cargo Clauses (B) or (C) 1982. It adds the risks of malicious acts, vandalism and sabotage to the cargo policy.

Manifest
A document containing the passenger list and details of all stores and cargo on board the vessel.

Mar Policy Form
A simplified form of marine insurance policy that was introduced in the Lloyd's insurance market to replace the SG policy form. A similar form of policy was introduced by the Institute of London Underwriters, for use by member companies, at the same time.
The new policy form was introduced in 1982 for cargo insurance and in 1983 for hull insurances.

MAREN Policy Form
A policy form used in the London marine insurance market to evidence a renewed long term contract where there are no security or other substantial changes from the conditions in the expiring contract.

Marine Extension Clause
Cargo policy clause that continues coverage on goods during deviation, delay, re-shipment, and transshipment, or any other variation in normal transit beyond the insured’s control.

Marine Surveyor
Specialist who determines the nature, extent and cause of loss and/or damage.

Maritime Lien
The claim a master and crew have on the vessel for the payment of wages due.

The terms may he applied, also, to the rights of a salvor in regard to property that is subject to a salvage award; also, to the rights of a carrier in regard to cargo that is liable for a general average contribution.

Market Capacity
The maximum amount an insurance market can absorb as liability to its policy holders while maintaining a proper solvency margin.

Marks
A term used in shipping practice to refer to the loadline marks on the ship's hull.

The term may be used also in regard to a bill of lading which shows the identification and destination markings on packages shipped.

MARPOL
Marine pollution

Master Air Waybill
An air waybill issued by the originating airline when more than one airline is involved with a shipment, or when a freight forwarder issues a house air waybill.

Master’s Protest
Sworn statement by the captain describing any unusual happening during the voyage.

Mate's Receipt
A receipt signed by the mate to say the cargo has been received on board, in good order and condition (otherwise 'claused').

Material Circumstance
Any circumstances which would influence the judgement of a prudent underwriter in determining whether to accept a risk and the amount of premium to charge.

Material Representation
A statement made to the underwriter before acceptance of risk which is material to the decision in accepting and rating the risk.

Measurement Ton - 1 cubic metre
One of the alternative bases of Freight Tariff

Mechanical Derangement
Certain types of light machinery, electrical equipment and similar are often subject to “not working” after arrival at destination, although they have not suffered from an insured peril. This is due to mechanical derangement and, to prevent misunderstandings, it is usual for the insurer specifically to exclude mechanical derangement from the policy.

Minimising A Loss
It is the duty of the assured to act all the time as though uninsured and to take all reasonable measures to minimise or avert a loss, even though the loss may be recoverable under his policy of marine insurance. If the assured or his servants take any such measures to preserve the property from an insured peril the expense, if any, is recoverable from the insurer under the suing and labouring clause.

Any expenses incurred by way of salvage or general average contributions are recoverable in a like manner. All such recoveries are subject to proportionate reduction if the property is not insured for its full value. Except where the policy provides otherwise it is customary for the insurers to pay the expense of minimising or preventing an insured loss without applying the policy deductible or franchise, if any. However, in hull practice the policy deductible is applied to all partial loss claims including expenses incurred to minimise or prevent an insured loss.

Missing Ship
A ship is deemed to be "missing" in the London market when, following extensive inquiries, she is officially posted as "missing" at Lloyd's. She is then considered to be an 'actual total loss" and policy claims for both hull and cargo are settled on that basis.

MT
Empty - an empty container or Multimodal Transport

Multimodal Transport
The UNCTAD preferred term for what some shipping companies call Combined Transport

M. & W.
Marine and war risks

M.A.
Malicious damage

M.A.S.
Maximum amount subject

M.B.D.
Machinery breakdown

M.F.L.
Maximum forseeable loss

M.I.A.
Marine Insurance Act

M.L.E.
Maximum loss expectancy

M.R.
Master of the Rolls


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Nail To Nail
A term used in transit insurance on such interests as paintings. The term denotes that the insurance attaches when the painting is removed from the wall fastening for transit and terminates when the painting is fastened to the wall at the destination specified in the policy.

Name
An underwriting member at Lloyd's, who grouped into underwriting syndicates.

Natural loss
Natural loss in weight.
In the case of liquid cargoes this is synonymous with natural leakage or trade ullage. In the case of solid cargoes it is usually due to shrinkage or drying out of moisture from changes in temperature. Potatoes are particularly susceptible to natural loss in weight. Since this is an inevitability and not a fortuity it is not covered under the term loss in weight unless this is qualified with "from any cause whatsoever" or a similar term. It is usual specifically to exclude loss in weight from insurances covering deterioration risks.

Negligence Clause
This clause was introduced to hull policies in 1888 following the decision in the case Hamilton Fraser & Co v Thames & Mersey
It is frequently termed the Inchmaree Clause after the name of the vessel involved in the case. The clause has been amended several times and is incorporated in the standard hull clauses (I.T.C.). It extends the policy perils by adding further perils in two sections (a) and (b).

Nesting
Packing hollow-ware cargo (e.g. earthenware bowls) so that one item nests within another. Paper or straw may be used to separate each item and avoid damage.

Net Tonage
This is the gross tonnage of a ship less the machinery, boiler and bunkers, crew and stores spaces.

New for Old
When new material or parts replace damaged material or parts during repairs to a ship underwriters are entitled to make a deduction from the claim as a result of betterment.

No Cure, No Pay
A principle of pure salvage. To entitle a salvor to a salvage award property of value must be saved in order that it may pay the award. If it is not saved there is no award.

It is not necessary that the property arrives at its final destination, only that the salvor brings it to a place of safety where the owner may take possession of it on payment of the salvage award. Lloyd’s Salvage Agreement is on the principle of "no cure, no pay".

No Value Declared (NVD)
A notation on air waybill which indicates that no specific value has been declared to the carrier for carriage of the merchandise. Liability of the carrier would therefore be as defined by statute or as incorporated in the waybill. Same as a Released Bill.

Non Delivery
Disappearance of an entire shipping package rather than the contents them¬selves or a portion of the contents.

Non Disclosure
The failure of the insured or their broker to disclose a material circumstance to the underwriter before acceptance of the risk. A breach of good faith.

Non-Separation Agreement
When a ship puts into a port of refuge to effect repairs which are the subject of a general average act the shipowner may discharge the cargo, or part thereof, and arrange for it to be transshipped to another vessel for onward carriage. Once the ship and cargo separate they become separate entities so far as subsequent general average loss and expenditure is concerned so that the cargo could not be called upon to contribute in general average to the additional expenditure incurred by the carrier.

For protection, the carrier will incorporate a clause in his contract of affreightment whereby the cargo owner agrees that such separation shall not affect any rights to general average contribution which the shipowner would have had under Rule XI of the York-Antwerp Rules but for the separation of the interests in the adventure.

Non Vessel Operating Common Carrier (NVOCC)
A firm that offers the same services as an ocean carrier. They usually con¬solidate several small shipments into full containers and arrange transporta¬tion by ocean common carriers. They are subject to the same laws and stat¬utes as apply to a primary common carrier. A Carrier issuing bills of lading for carriage of goods on vessels which he neither owns nor operates.

Normal Course of Transit
The orderly transit of merchandise from the point of origin to the final desti¬nation without interruptions or delays resulting from the action or inaction of any party at interest.

Notice of Abandonment
A condition which must precede a constructive total loss. If the insured fails to give notice to the underwriter, the loss can be treated only as a partial loss unless an actual total loss is proven. An underwriter who accepts notice admits liability for the loss. Notice is not necessary where it would not ben¬efit the underwriter, where the underwriter waives the obligation or in the case of a re insurance provided the policy incorporates the "waiver" clause, action taken by an underwriter to prevent or reduce the loss is not deemed to be an acceptance of abandonment.

Not To Inure Clause
A clause in a cargo policy stating that the policy shall not inure to the benefit of a carrier or other bailee. The intention is to deny the right of carriers to benefit from the insurance when they claim such a right in the contract of carriage.

Clause 15 in the Institute Cargo Clauses (A), (B) and (C).

Notary Public
An official certified to take affidavits and depositions from members of the public.

Notice Of Claim Against Carrier
When there is apparent damage to goods on discharge the consignee must give notice of the damage in writing to the carrier or his agent at the port of discharge before or at the time of removal of the goods into the custody of the person entitled to take delivery of them.

It is the duty of the consignee to carry out an immediate examination of the goods on discharge or as soon as practicable thereafter, but in any case notification of damage which is not immediately apparent must be given to the carrier within 3 days of discharge.

Notice need not be given if the survey is a joint survey.

Failure to observe these principles will exclude the carrier from liability.

NVO(C)C Non Vessel-Owing/Operating (Common) Carrier
A Carrier issuing bills of lading for carriage of goods on vessels which he neither owns nor operates.

N.A.
Net absolutely. Not available. Not applicable

N.C.A.D.
Notice of cancellation at anniversary date

N.C.D.
No-claim discount

N.C.V.
No commercial value

N.E.
Not entered

N.E.P.
Net earned premiums

N.G.A.D.
Notice given arrival date

n.r.a.d. or NRAD
A carriage of goods conditions meaning "no risk after discharge" whereby the carrier is free from liability as from the time the goods are discharged.

An insurer may also use this abbreviation on a slip where he does not wish to undertake the risk at a certain unsavoury destination.

In the absence of the abbreviation most cargo insurances would continue after discharge until delivery in accordance with the transit clause.

n.r.a.l.
No risk after landing

n.r.a.s.
No risk after shipment

N.R.T.
Net registered tonnage

n.r.t.b.
No risk until on board

n.r.t.o.r.
No risk until on rail

n.r.t.w.b.
No risk until waterborne

n.s.p.f.
Not specially provided for

N.T.U.
Not taken up

N.U.R.
Not under repair

N.W.P.
Net written premiums

N/E or n.e.
Not exceeding


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Obliteration Of Marks
Where goods arrive at their destination in specie (i.e. as shipped) but are identifiable by reason of obliteration of the marks the loss, if any, is a partial loss and must not be construed as a total loss. (UK M.I.A., 1906, Section 56, Sub 5).

Occurrence
A chain of events which together form one happening. An example given by R.H. Brown's "Marine Insurance Terms" 4th Edition is: A ship collides with another, catches fire and sinks. The whole is one occurrence.
If there are no contributing factors a single event may be termed an occurrence.

OECD
Organisation for Economic and Cooperative Development

Official Number
The registered number given to a merchant vessel and cut into the vessel's 'main beam", together with the net registered tonnage.

Omnibus Clause
A clause in a hull policy extending liability cover to embrace, in addition to the insured's legal liability, the liability of other organisations who are connected with the ship.

On Board Bill of Lading
A bill of lading confirming the receipt of merchandise and the fact that it was loaded on board the ocean vessel.

On Consignment
When goods are sent overseas with the intention that they are to be put up for sale on arrival at destination, they are said to be sent "on consignment". In the event of a claim the insurers are not liable for sale charges.

On Deck Bill of Lading
A bill of lading which states that the cargo has been stowed on deck and is at the shipper's risk. The carrier is not liable for loss or damage unless due to gross negligence.

Onus Of Proof
The onus always lies with the claimant. The assured must prove his loss. The insurer defending a claim on the grounds of unseaworthiness must prove the unseaworthiness. The effect is that the person making the claim must prove his right to the claim and a person defending a claim must prove his grounds of defence. The onus is on the person whose property has been sacrificed in general average to claim contribution from the general average fund.

The onus of proof initially lies with the claimant. The claimant must prove a loss exists.

In an all risks insurance, the onus of proof then passes to the insurer to prove, should they so wish, that a policy exception applies.
With a specified perils policy, the claimant must prove the loss was as a result of one the perils insured against.

OOG - Out of Gauge
Goods whose dimensions exceed those of the container/flat rack in which they are packed.

Open Cargo Policy
These are for those clients who have a regular turnover of Goods in Transit. The contract will cover all sendings which come within the scope of the insurance. Premiums are debited monthly or quarterly.

Open Charter
Where the charter-party specifies neither the kind of cargo nor the ports of destination.

Optional Stowage Bill of Lading
A bill of lading which gives the carrier the right to stow cargo wherever he sees fit, especially with respect to the stowage of containers on deck.

Ordinary Breakage
Breakage of fragile cargo which by its regularity has become accepted as inevitable loss during transit. It is not mentioned in the general exclusion clauses in the ICC (1982), but is one of the Statutory exclusions in the MIA 1906.

Occurs to cargoes of brittle nature or which are particularly subject to breakage. This is breakage which arises without the operation of an insured peril and it is not covered by the ordinary standard policy unless specifically expressed therein as being covered.

Ordinary Leakage
Natural loss of liquid in a cargo (e.g. evaporation of water in grain, evaporation of oil, contraction of oil, etc. during transit).

Orlop
Lowest deck of a ship.

Overage Additional Premium
All additional premiums charged on an open cover declaration where the carrying vessel is outside the scope of the classification clause. It may be applied, also, to additional premium charged for breach of navigational war¬ranties (e.g., institute warranties) where the ship is more than 15 years old.

OT - Open Top
A container with tarpaulin covered open roof.

Out-Turn
In shipping, this is the amount or weight of the cargo discharged from the ship.

In insurance, the expression may also refer to the condition of the cargo on discharge. This is particularly important in respect of bulk cargoes where claims are calculated on a comparison between loaded and unloaded weights.

Oxter Plate
A plate fitted to the top of a rudder post.

O.D.
Own damage or On Deck

O.D.I.C.
Owners' difference in conditions

O.F.T.
Office of Fair Trading (UK)

o/b
On or before

o/c
Open cover. Off cover

O/D
On deck

O/H - Overheight
A container/flat rack with goods protruding above the top of the corner posts.

O/W - Overwidth
A container with goods protruding beyond the sides of the container/flat rack onto which they are packed.


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Packing List
these are detailed inventories of all the physical component elements of the cargo packed for shipment. The packing list:

  • is a check list for the seller when packing, and the buyer when unpacking
  • assists customs when identifying the goods and performing inspections
  • (may) give the specific weights of individual packages

Pairs And Sets Clause
This is not strictly a marine clause. However, art objects and jewellery are frequently insured in the marine market. It is a common clause in household removal contracts.

Where an article is damaged or lost and the object is part of a pair or set is ruined by such loss or damage and the assured may feel entitled to indemnity for the whole pair or set, requiring the insurer to take over whatever may remain. To obviate this the pair and set clause is incorporated into such insurances limiting the insurer’s liability to the insured value of the lost or damaged part or object only.

Examples of pairs and sets are matching candlesticks, and sofa & armchair sets. In the case of the latter and water / knife damage in unpacking, the insurer's liability is strictly limited to recovering one chair, and not the whole set.

Partial Loss
The MIA states the basis for claims for partial loss. Where the whole or any part of the goods have been delivered damaged at destination, the measure of indemnity is such proportion of the sum fixed by the policy as the difference between the gross sound and damaged values at the place of arrival bears to the gross sound value.

Particular Average
A particular loss caused by marine perils, other than a General Average loss.

Particular Charges
An expense incurred by the assured, his agents or assigns to prevent or minimise a loss of the subject matter insured from an insured peril. Neither general average nor salvage charges are included in the term "Particular Charges". Particular charges are not particular average and cannot be added to attain the franchise, if any.

Sue and Labour charges are a form of particular charge but are not referred to as such in practice because it is customary to use the term "Particular Charges" to apply only to charges at destination.

This is an important difference because charges at destination are merely a means of assessing loss rather than preventing loss, so that there can be no question of the insurer paying particular charges at destination following a total loss, as there could be with Sue and Labour charges. Of the two, only Sue and Labour charges are recoverable from the insurer if there is no loss, particular charges not being recoverable unless there is a claim under the policy.

Particular Charges, Sue And Labour Expenses And Extra Charges

In addition to total and partial losses, underwriters settle salvage losses, particular charges, sue and labour expenses and extra charges.

Particular charges include extra charges and sue and labour expenses and difficulty can often be experienced when distinguishing between them. These are expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured other than general average expenditure or salvage (M.I.A. s64)

A particular average loss is a partial loss of the subject-matter insured, which is caused by a peril insured against, and which is not a general average loss

Expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges, are called particular average charges. Particular charges are not included in particular average.

Basically, Sue and Labour charges are incurred short of destination and particular charges are incurred at destination.

Apart from this, the major difference between them is that sue and labour charges can be recovered in addition to a total loss but particular charges are added to the claim and the total sum is limited to the insured value.

Examples of such charges are:

  • sorting sound cargo from damaged cargo,
  • dry cleaning and repacking wet damaged clothing,
  • fumigating infested cocoa beans, and
  • repacking machinery at an intermediate port.

Partlow Chart
Circular paper disc recording chart for refrigeration temperatures, used on refrigerated containers.

Parturient
In labour. Applicable to livestock insurance and related to pregnancy.

Pax
Passengers (Aviation)

Percentage Of Depreciation
Generally this term applies to claims on goods only, because the measure of indemnity for partial loss of ship is the reasonable cost of repairs regardless of the insured value of the ship. The percentage of depreciation is the percentage which is applied to the insured value on a cargo policy to ascertain the claim for partial loss. It is arrived at by comparing the gross arrived damaged value of the goods with the estimated gross arrived sound value, the difference being applied to the estimated gross arrived sound value as a percentage. In some cases the surveyor may assess the percentage of depreciation to be applied.

Perfecting the Sight
Adding necessary details of the bill of lading when such had been previously omitted.

Perils of the Sea
Hazards arising on navigable waters through natural forces such as abnor¬mally heavy seas, high winds, etc.

Pilferage
Theft of the contents, in whole or in part, of a shipping package.

Pirates
Persons attacking property whilst outside the jurisdiction of any state, and owing allegiance to no recognised flag, but the term includes passengers who mutiny and rioters attacking a ship from the shore. A pirate acts for his own personal gain and not for political ends.

Piracy
An assault on a vessel, cargo, crew or passengers at sea by persons owing no allegiance to a recognised flag and acting for personal gain.

It also includes acts of rioters who attack a ship from the shore and of passengers who mutiny. This peril, along with war perils, was excluded from the SC policy by the F.C. & S. clause; to be reinstated if the agreed policy conditions covered war risks. Thus, for many years piracy was related to war risks.

The 1982 cargo war clauses do not cover piracy, and it is not embraced within the risks covered by the B or C cargo clauses.
The 1983 hull clauses incorporate piracy among the risks covered by the standard marine clauses; piracy not being included in the war risks cover (1983).

PLC
Public limited company

Plimsoll Mark
The loading mark on the side of a vessel.

The draught of a vessel is the vertical distance from the keel to the waterline. The maximum permitted draught varies according to the seasons and waters in which she plies. The markings are given above, and all ships should be loaded so that the loadline corresponding to the zone in which they are steaming must not be submerged. The seasons to which the markings apply are Tropical (T), Summer (S), Winter (W) and Winter North Atlantic (WNA). The LR in the above diagram denotes "Lloyd's Register".

The world has been mapped off into sections showing where those sections apply. These are broadly detailed below:

Summer Virginia to Tarifa, South Coast of Cuba and Costa Blanco, Yokohama to Prince Rupert and Hong Kong and Philip-pine Islands to California

Tropical Venezuela to Costa Blanco and Rio de Janiero to Walvis Bay, Somalia through Saigon to Guatemala and Diego Suarez through Darwin to Coquimbo

Summer All areas between the lower line of the foregoing tropical area down to a line passing through Bahia Blanca, Cape Town, Durban, Launceston, Dunedin and Valparaiso

It must be appreciated that some areas change from summer to winter with different dates applying.

Given below is the seasonal winter situation:

Bergen to Greenland including the centre of the North Atlantic; Prince Rupert and the North Pacific to Yokohama - winter loadlines apply from 16th October to 15th April and summer loadlines from 16th April to 15th October.

All areas below the line between Bahia Blanca, Cape Town, Durban, Launceston, Dunedin and Valporaiso - winter loadlines apply from 16th April to 15th October, and summer loadlines from 16th October to 15th April.

Continent Baltic and North Atlantic - winter loadlines from 1st November to 31st March and summer loadlines from 1st April to 31st October.

Mediterranean and Black Sea - winter loadlines from 16th Dec-ember to 15th March and summer loadlines from 16th March to 15th December.

Sea of Japan - summer loadlines from 1st March to 30th Nov-ember and winter loadlines from 1st December to 28th/29th February.

Seasonal Tropical (Arabian Sea - above Muscat and Karachi) - tropical loadlines from 1st August to 20th May; summer load-lines from 21st May to 31st July.

Arabian sea, below Muscat and Karachi to a line from Somaliland to Colombo - tropical loadlines from 1st December to 20th May; summer loadlines from 21st May to 15th September. Tropical loadlines from 16th September to 15th October; Summer loadlines from 16th October to 30th November.

Bay of Bengal - tropical loadlines from 16th December to 15th April and summer loadlines from 16th April to 15th December.

China sea - tropical loadlines from 16th December to 15th April and summer loadlines from 1st May to 20th January. The foregoing regulations/zones must be strictly followed as vessels are not permitted to operate submerged above their seasonal loadline marking. Alterations in the zones are made by the timber cargo regulations.

Freeboard is the distance measured amidships from the water line to the main deck of a vessel. This is normally the uppermost continuous deck in a ship with one or more decks. However, in a shelter deck vessel it would be the next deck below.

POA - Place of Acceptance
Where the goods are received for transit and Carrier's liability commences.
Now more usually called a POR.

POD
Place of Delivery - Where goods are delivered and Carrier's liability ceases.
or
Proof of Delivery - A signed receipt acknowledging delivery.

Poincaré Franc
Fictitious gold franc originally used amongst other things to assess Carrier's liability in an inflation -proofed manner in Hague Visby Rules. Now largely replaced by SDRs.

Point
point = a measure of direction (one point = 11¼ degrees of arc) Also: a headland, jutting into the sea

Policy Proof Of Interest
The assured under a policy must have an insurable interest at time of loss and he is obliged, if required, to prove this interest at the time he makes his claim.

Pollution Hazard Clause
A clause in a hull policy, whereby underwriters cover deliberate damage or loss to the ship caused by Governmental authority in attempts to mitigate a threat of pollution hazard; where such relates to loss or damage to the ship and where it has not resulted from a want of due diligence on the part of the assured, owners or managers of the ship.

POR - Place of Receipt
Where the goods are received for transit and Carrier's liability commences.

Port Blockage
Stand alone cover that provides a loss of revenue cover for Port Authorities following the seaward full or partial blockage of access to the port or facilities, generally by wreck or natural disasters.

Portage Bill
A bill giving the statement of wages of each member of the crew at the end of a voyage. Power of Attorney: A (locument which empowers one person to act for another.

Porthole Container
Insulated container for carrying refrigerated produce, that is reliant on an external source of cold air.

Pratique
When a vessel is about to make direct contact with a port it is necessary for a medical officer to ensure that the ship has a clean bill of health and that quarantine regulations have been observed. The “Pratique” is the permit issued after the medical officer has been satisfied, following which the vessel may contact the port.

Prepaid Freight
Freight paid by the shipper to the carrier when merchandise is accepted for shipment. Not refundable even if the merchandise does not arrive at the intended destination.

Press
to press: to force a tank to overflow by using a pump

Prime Cost
In the Marine Insurance Act, refers to the invoice price at the port of loading

Proof Of Loss
The onus to prove loss rests with the assured, who must also prove the loss was caused by an insured peril. If the insurer does not agree the onus to prove that the loss was caused by an uninsured peril rests with the insurer.

A sworn statement by the assured giving details of the loss is also called "Proof of Loss". This is seldom required in marine insurance because the survey report usually gives sufficient details.

Under an All Risks policy the insurer does not generally require to know the cause of loss although he may ask the assured to produce evidence that, in fact, an accident has occurred which results in the loss.

Protection and Indemnity Clubs
A mutual club formed by shipowners to cover Protection and Indemnity risks not insurable in the ordinary marine market. Each shipowner "enters" his tonnage in the club and receives a Certificate of Entry for each vessel entered. He pays a nominal amount for entry and is requested to pay "calls" periodically by the club. The club is operated by a manager and controlled by a Committee appointed from members of the club. It is usual for the club also to advise members on charter disputes and defence of claims made by cargo owners. The premium provisions of the Marine Insurance Act, 1906 do not apply to mutual clubs. Further, the provisions of the Act may be modified by agreement between both parties in mutual insurance.

Protection & Indemnity Risks
Hull risks not insurable under the ordinary marine policy. these are basically liabilities of the shipowner to others or expenses unintentionally incurred by the shipowner in running his ship. Of the former the one-fourth collision liability (see Collision Clause) is the most obvious, followed by liabilities to objects, own cargo, own engagements, loss of life and personal injury and other liabilities. The sort of expenses recoverable as Protection and Indemnity risks in a club are quarantine expenses, fines, shipwreck indemnity and the like. The only standard policies to cover Protection and Indemnity risks are Builders Policies, Port Risk Policies and Yacht Policies. The marine policy may, in some cases, be extended to cover Protection and Indemnity risks, but this is unusual.

Protest
A written declaration by the master and witnessed before a Notary Public.

Proximate Cause
The most direct cause of loss or damage to the insured property. It is not necessarily the nearest cause in time but is the nearest cause in effect. The furthest cause is called "Causa Remota". The legal term for proximate cause is "Causa Proxima Non Remota Spectatur" which means that the nearest cause and not the distant cause must be taken into account when considering the cause of loss.

Pure Indemnity
An expression used to denote indemnity as laid down by the Marine Insurance Act 1906 for unvalued policies. Pure indemnity represents the actual loss suffered by the assured as though the adventure had never taken place. In the case of total loss of hull it is the actual market value of the vessel. In the case of total loss of cargo it is the actual cost of the goods to be assured plus charges of freight and insurance, not including profit. In practice, valued policies are always used in hull and cargo insurances, thus over-riding the principles of pure indemnity. This is permissible by the Marine Insurance Act 1906.

P. & L.
Profit and Loss

P.I.
Personal injury. Professional indemnity. Premium income

P.I.A.
Peril insured against

P.M.L.
Probable maximum loss. Possible maximum loss

P.O.D.
Pay on delivery

P.O.R.
Port of refuge

p.p.
Per procurationem (On behalf of)

P.R.
Port risks

p.r.
pro rata (in proportion)


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Quayage
The charge for using a berth alongside a wharf.

Quantitative, non-tariff trade barriers (Quotas)
A quantitative trade barrier, or quota places a finite limit on the quantities of goods which may be imported into (or in some cases exported out of a country each year. It is most commonly seen in the form of an import quota, which places specific limits onto the quantities of imports, by product type, and in some cases, product origin. Quantitative trade barriers are usually controlled through a system of import (or export) licensing, whereby each year importers (and exporters) apply to be granted a portion (or quota) of the overall allowable limit. This licence must be presented to customs before any shipment will be permitted to pass in or out of the country.

Q.C.
Queen's Counsel


R

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RACE
Radioactive containment exclusion clause - also IRACE

Ranging Clause
A clause in a hull policy exempting underwriters from liability under the policy (for damage received as well as for damage done) in the event that the insured ship collides with another ship while the vessels are approaching or ranging alongside each other at sea for the purpose of transferring cargo. Cover may be obtained by arrangement with the underwriters, in practice, provided they are notified, of the intention to transfer cargo in this manner, in advance.

The exemption does not apply to customary transhipment in port areas involving inshore harbour craft.

Received for Shipment Bill of Lading
A bill of lading issued by the carrier evidencing actual receipt of merchan¬dise for shipment. Also referred to as a Dock Receipt.

Receiver
The person appointed to "receive" and administer the rents and profits, or other moneys, accruing to an estate or business undertaking which is administered or wound-up under the supervision of the court. Official Receivers are officials permanently employed to act in that capacity in bankruptcy proceedings or the winding-up of joint-stock companies.

Receiver of Wreck
An official who is responsible for wrecks within coastal waters.

Receivership (of a company)
When a company is in receivership, the management of that company has been handed over to professional managers, who may decide to either wind up the company (see Liquidation) or to trade the company out of its financial difficulties.

Whether this falls into the ICC(A) 4.6 exclusion:
In case shall this insurance cover .... "loss damage or expense arising from insolvency or financial default of the owners managers charterers or operators of the vessel " depends on the circumstances. First, the cargo has to either lost or damaged due to either a delay, or the exercise of a lien (probably on the ship or the containers). Essentially, there has to be an interruption to the prosecution of the intended transit, specifically caused by the financial difficulties of the carrier.
If the cargo has been landed, and a fire occurs in the onshore store while awaiting another vessel, it is not likely that the proximate cause is the financial default.

Reconditioning Charges
Where practicable it is the duty of the assured to recondition cargo damaged by an insured peril, thereby minimising a claim under the policy.
Provided the charges for reconditioning are incurred short of destination and are to prevent a loss which would be recoverable from the insurer, the assured is entitled to recover these charges under the policy as Sue and Labour Charges.

Reconditioning charges at destination are not necessarily recoverable under the policy since they are merely a means of assessing the loss.

Recovery
The amount recovered from a third party responsible for a loss on which a claim has been paid.

REEFER
Refrigerated

Registered Tonnage
Charges in respect of the use of canals and similar are based on a ship’s net registered tonnage. the tonnage is found by calculating the cargo carrying capacity of the ship in cubic tons at 100 cubic ft. per ton. The gross tonnage of the ship is arrived at by taking into account the whole area inside the hull and the net registered tonnage is calculated by deducting certain specified spaces from the gross tonnage. These spaces include engine room space, crew’s quarters, space used in navigating and operating the vessel, light and air spaces used in navigating and operating the vessel, light and air spaces, locker rooms and similar. An open shelter deck is not included in the net registered tonnage but a permanently closed shelter deck is.

Released Bill of Lading
Type of affreightment where no specific value has been declared for carriage. (See No Value Declared).

Replacement Clause
Used mainly in insurances on machinery as cargo, the clause provides that in respect of damage the insurer’s liability shall be limited to replacing and fitting the broken part. This prevents the assured from claiming a total loss on the grounds of loss of specie. Such a claim being based on the assured’s contention that he is unable to use the machine for the purpose for which it was intended.

The Secondhand Replacement Clause has much the same effect on insurances of secondhand machinery, with an added proviso that the amount recoverable in repairs is limited to that proportion that the secondhand machine bears to a new machine.

Representation
A statement of fact made by the insured or their broker when negotiating insurance with the underwriter.

RFS - Received for Shipment

Rhodian Sea Law Latin Lex Rhodia.
A body of regulations governing commercial trade and navigation in the Byzantine Empire beginning in the 7th century; it influenced the maritime law of the medieval Italian cities.

The Rhodian Sea Law was based on a statute in the Digest of the Code of Justinian commissioned in the 6th century and on maritime customary law originating on Rhodes in ancient times. The regulations concentrated on the liability for the cost of lost or damaged cargo. Cargo loss was greatest during storms, when part or all of it had to be thrown overboard in order to save the ship.

see General Average.

Large amounts were also lost to piracy; from the 7th century on, there was increased danger of sea raids by Arab and Slavic pirates. Thus, the maritime law served as a form of insurance, dividing the cost of the losses between the shipowner, the owners of the cargo, and the passengers.

Rhodian Sea Law persisted in influence, if not in actual practice, through the 12th century. In the 13th and 14th centuries, Byzantine sea commerce dwindled, and eventually the law became obsolete.

RI
Registro Italiano

Rising Market
When the value of goods is rising. It is preferable for a merchant to send goods for sale at destination (i.e. on consignment) on a rising market . The insurer is not interested in whether the market rises or falls because claims are settled by comparing gross arrived sound values with gross arrived damaged values and applying the percentage of depreciation, so arrived at, to the insured value.

Risk
A risk is an occurrence which might happen but does not include an inevitability, which must happen.

RN - Release Note
Receipt signed by Customer acknowledging delivery of goods.

RO-RO - Roll On-Roll Off
A ferry type vessel onto which goods and containers can be driven, usually via a ramp.

Rowlock
a gap in the gunwale into which an oar fits for rowing; also by common usage refers to a metal crutch, swivelling in the gunwale, for the same purpose

r. & c.c.
Riot and civil commotion

r.c.c. & s.
Riot and civil commotions and strikes

R.D.C. - Running Down Clause
A term sometimes used in market practice to define the collision liability clause in a hull policy.

R.H.A.
Road Haulage Association - UK

R.I. or R/I
Reinsurance

R.R.&I.
Respective rights and interests

R.T.B.A.
Rate to be agreed

R. & K.
Ransom and kidnap (insurance)


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Sacrifice
The deliberate casting away or destruction of property to prevent greater loss. General Average sacrifice is for the common good and saved interests make good the sacrifice in proportion to the saving enjoyed.

Salvage
An award payable to a third party for services rendered to preserve maritime property from peril at sea. Pure salvage is awarded only to a third party acting independently of contract and is payable only when the property has been saved. The award is based on the value of the property saved, the hazard and degree of skill involved and the expense of the operation. The contributory value for apportionment of salvage is calculated in the same way as for general average but the values are assessed at the place where the salvage operation is completed. The contributory value is compared with the insured value, as with general average, and any resultant under-valuation is reflected in a proportionate reduction in the contribution paid by the insurer. Any guarantee given by the insurer Is therefore subject to qualification unless a counter guarantee is given by the assured. A salvor cannot claim an award where the circumstances leading to the salvage act were brought about by the wrongful or negligent act of the salvor.

The insurance term for a salvage award is salvage charges and such charges incurred to preserve the insured property from a peril insured against are recoverable under the policy as a loss by that peril. Whereas contribution to general average is not payable by any of the interests involved which do not reach their destination, any salvage contribution is still payable on such property, provided the salvage operation was successful. For this reason, salvage charges are payable by insurers in addition to a total loss resulting from a subsequent casualty. Despite the principle of pure salvage, in practice Lloyd’s form of Salvage Agreement is used on a no cure no pay basis.

The term salvage may also be used to describe the property saved.

Salvage Association
The Salvage Association was formed in 1856 by Marine insurance and shipping interests in London. Its cumbersome former title "The Association for the Protection of Commercial Interests as respects Wrecked and Damaged Property" was discontinued when a new Royal Charter (Eliz. II) redefined the objects of the Association in 1971 and granted the title Salvage Association. The basic foundation of the Association is the investigation of casualties in which marine underwriters are interested, but since 1971 its activities have been extended to offer services to a much wider field, including non-marine and aviation matters.

When a casualty is reported and a claim seems possible it is common practice for the interested underwriters (Lloyd’s or Companies') to instruct the Salvage Association to act on their behalf. The Association initiates an examination of the circumstances of the casualty and ascertains the extent of damage to the property; subsequently providing the owner with information and recommendation for the protection and preservation of the interests of all parties.

The Association is non-profit making and its affairs are managed by a Committee comprised of representatives from Lloyd's and English Insurance Companies.

Salvage Award
An amount awarded to a salvor for services rendered in the salvage of property in peril at sea.

The award may be made by a court or by arbitration, depending on the terms of the salvage contract. Underwriters contribute towards a salvage award insofar as the award is in respect of insured property in peril from an insured risk, subject to any restrictions imposed by the policy (eg a policy deductible) and, except where the policy provides otherwise, subject to reduction to reflect under-insurance, if any.

Salvage Guarantee
An agreement, whereby a guarantor agrees to make good a salvage award if the party responsible fails to pay it to the salvor. The salvor (termed "Contractor" in the form) will discharge the maritime lien which he is entitled to attach to the salved property, in exchange for such an agreement subscribed by an acceptable guarantor or guarantors. Lloyd’s may issue such an agreement for use in conjunction with Lloyd’s Standard form of Salvage Agreement.

Payment in relation to the Lloyd’s form is guaranteed by the Corporation of Lloyd’s who require to hold a policy written by acceptable insurers, or an Indemnity subscribed by syndicates at Lloyd’s; whereby they will be reimbursed if they have to make good any sum under the guarantee.

Salvage Loss
A compromised settlement on a cargo policy, usually when the adventure has been terminated short of destination and damaged goods are sold at the intermediate port. The underwriter pays the difference between the sum insured by the policy and the proceeds of the sale.

There is a form of constructive total loss settlement which has the same result a constructive total loss, except that no notice of abandonment is required. This is known as a "salvage loss".

The term "salvage loss" originates from the practice of a forced sale at port of distress of badly damaged cargo in order to prevent the cargo from becoming a total loss.

Such losses are paid by underwriters by deducting the net sale proceeds from the insured value, treating the claim as a total loss less salvage or a "salvage loss".

The reason for this method of adjustment is that, as already discussed, the insurance is on the voyage as well as on the cargo itself. It is therefore reasonable to treat on a total loss basis cargo that cannot be forwarded to destination.

Thus:

Insured value
$100,000
Proceeds (gross)
$15,000
Sale charges
1,000
----------------
 

14,000
----------------

 
Claim
$ 86,000

Salvage Sales
Since one of the main reasons of a surveyor’s function is the assessment of the loss, the salvage sale is an item which is of the utmost importance. If a surveyor is well aware of the residual value of a damaged consignment, he has a very comfortable negotiating position versus the claimant. If the claimant then continues to seek a depreciation and/or extra costs beyond this amount, the surveyor can still propose that the goods can be placed at the disposal of the Cargo Underwriters in view of a salvage sale.

SAR
Search and rescue

Scantling
The thickness of a steel plate in a ship.

Scraping the bottom
Removing weed and incrustation from the underside of a ship. Not covered by a boll policy; not even when necessary to repair damage recoverable under the policy.

Seaworthiness
There is an implied warranty in every voyage policy that the ship must be seaworthy at the commencement of the insured voyage or, if the voyage is carried out in stages, at the commencement of each stage of the voyage. To be seaworthy, the ship must be reasonably fit in all respects to encounter the ordinary perils of the contemplated voyage, properly crewed, fuelled and provisioned, and with all her equipment in proper working order. Cargo poli¬cies waive breach of the warranty except where the insured or their servants are privy to the unseaworthiness. Breach of the warranty is not excused in a hull voyage policy, literal compliance therewith being required. Although there is no warranty of seaworthiness in a hull time policy, claims arising from unseaworthiness may be prejudiced if the ship sails in an unseaworthy condition with the knowledge of the insured.

Seaworthiness Admitted Clause
A clause in a policy whereby the insurer admits that no claim under the policy will be repudiated as a result of unseaworthiness. This clause does not defeat the right of the insurer to proceed, in the name of the assured, against a carrier who is liable for the loss.

The clause in the Institute Cargo Clauses goes on to ensure that the assured is not prejudiced by reason of the wrongful act or misconduct of the shipowners or their servants, committed without privity of the assured.

Secondhand Machinery
When machinery is insured as cargo it is deemed to be new machinery unless the policy specifically states that it is second hand. It is usual to incorporate the Second Hand Replacement Clause in a policy covering second hand machinery enabling the insurer to replace damaged parts with either second hand material, or allow a deduction for new-for-old.

Seller's Interest
The insurable interest of the seller. The seller has such an interest only until the title to the goods passes to the buyer. The policy may be assigned by the seller to the buyer but assignment must take place before, or at the time that, the seller’s interest ceases. The seller cannot assign the policy after he has lost his insurable interest.

Sentimental Loss
A market loss to goods brought about by fear that goods may have suffered from a known casualty whereas no such loss exists in fact.

This is, in effect, loss of market and is not covered by the policy. It occurs when undamaged cargo is discharged from a ship which has damaged cargo on board. It is often associated with a fear of loss by taint.

Tea is particularly subject to loss in value if stowed in proximity with damaged cargo.

The phrase is also used in Household and Personal Effects claims, where the claimant erroneously claims for a loss of sentimental (emotional) value.

Settling Agent
An underwriter's representative who is authorized to settle claims.

SG Policy
The 'Ships Goods' policy form adopted by Lloyd's, in 1779, as a standard for all marine insurance business. The form covered both ship and goods on a specified voyage and required considerable adaptation to be used for modern hull and cargo business. The London company market adopted separate policy forms for hull and cargo business, but these were very similar to Lloyd's SG form and still required adaptation.

In January, 1982, the London cargo insurance market replaced the SG form with the MAR form of policy. The London hull insurance market took the same measure in October 1983. The Institute clauses published for use with the SG form and its company counterpart have been withdrawn.

Ship's Articles
The agreement between the master and his crew, giving details of conditions and terms.

Ship's Husband
The shipowner's agent who superintends the vessel when in port.

Ship Arrest
Because of the right in rem in admiralty law, an aggrieved party can arrest a vessel through the powers of the court, which has admiralty jurisdiction.

Shipped Bill
A Bill of Lading that acknowledges the goods have been loaded on the ship.

Shipper
The person tendering goods for carriage
Not to be confused with the party issuing the B/L or the vessel operator who is the carrier.

Shipper's Receipt
An alternative to a bill of lading used in consolidation of container shipments. It does not give legal title to the goods.

Short Delivery
Traditonally, the quantity of cargo delivered is less than the bill of lading quantity.

Short Form Bill of Lading
A summary type bill of lading which does not incorporate all obligations and responsibilities of both parties. Unless a shipper is familiar with the carrier's tariff, he should request a full bill of lading.

Short Shipment
When the full amount intended to be shipped has not been shipped.

Short Term
A time policy (usually a hull policy) effected for a period of less than 12 months.

Short Ton
Weight measurement of 2000 lbs.

Shortage
A form of non-delivery. Non-delivery refers to the failure of a whole package to arrive at the destination without any evidence to show the cause of loss. To establish a claim it is necessary to show documentary proof that the lost property was in fact loaded. Shortage occurs when part of a package or bulk cargo fails to arrive. The policy covers neither non-delivery nor shortage unless they are specified perils. A policy specifically covering non-delivery but not specifying either shortage or short-delivery does not cover these extra perils. Many bulk cargoes are insured against shortage, which is arrived at by comparing shipped and unloaded weights. A claim should be made by the consignee against the carrier for shortage.

Shrouds
Atwartships or lateral supports to mast

Shut Out
Cargo not loaded.
A "lock-out" usually refers to a labour dispute where the workers have been locked out of their usual place of employment by their employer

Single Transit Policy
"One Off" insurance for those clients who require transit cover on an infre¬quent basis.

Sighting The Bottom
Examining the underside of a ship for damage following an accident.

The Institute hull clauses provide that the underwriters will pay the cost of sighting the bottom without applying the policy deductible and even if no damage is found, but only when the cost is incurred specially to examine the bottom following stranding. Otherwise, these costs are included in a claim for damage to the ship's bottom but are subject to the policy deductible.

Silver Nitrate
During any marine transport, the risk of wetting of cargoes is imminent and obvious.

For some cargoes, e.g. steel cargoes, it makes a huge difference whether these have been wetted by fresh or by brackish / salt water.

In order to establish this, the field test used is the "silver nitrate test". The test is carried out by a mixture of 2% silver nitrate (AgNO3), and 98% distilled water (H2O).

This solution has the aspect of water, viz: clear and colourless.

Silver nitrate has the property of reacting with Chlorides, in the form of a white emulsion.

The reaction obtained will depend on the percentage of silver nitrate in the solution. Even a solution of 3% will give a noticeable difference in reaction compared to a 2% solution, and 5% will tend to react with almost anything.

Single Administrative Document
Produced by SITPRO (Simplication of International Trade Procedures), this document was introduced to the EEC in 1988. It is part of the 'aligned series' for the improvement of trade procedures and embraces, within a single document, the functions of some 70, previously used, Customs forms.

Sistership Clause
A clause in a hull policy whereby the underwriters agree to treat sisterships as if they were separately owned (and capable of legal liability, one to the other) in regard to collision liability claims and claims for salvage charges.

SITPRO
Simpler Trade Procedures Board

Slamming
Impact of water on the bows of the ship.

Sling Loss
Cargo lost by falling from ship's lifting tackle during loading or unloading.

Slot
Space on board a vessel occupied by a container.

Slothire
A standard BIMCO slot charter for containerships.

SOB - Shipped On Board
Endorsement on a Bill of Lading confirming loading of goods on vessel.

Sound Value
For the purpose of arriving at the amount due from the insurer in the event of partial loss of goods it is necessary to determine the sound value at the destination.

To obtain equity, it is necessary to estimate the gross sound value of the goods, so that a comparison can be made with the gross damaged value in order to apply the difference as a percentage of depreciation. In the case of hull it is not necessary to find the sound value for partial loss claims because the reasonable cost of repairs is payable without reference to the actual value of the vessel.

It is usual to obtain a certificate of sound value when assessing the contributory value of the vessel with regard to general average or salvage contributions. Contributory values on cargo are calculated on net values.

Sparred
Describes a system of packing hollow-ware cargo whereby wooden supports hold the goods rigid during handling.

Special Drawing Rights
In the late 1960’s concern developed in the international business community as to the adequacy of international liquidity in a situation of expanding world trade and investment. The 1967 annual meeting of the IMF in principle agreed to supplement existing international reserves - consisting principally of gold and national currencies such as the U.S. dollar and sterling - by creating a new reserve asset in the form of the Special Drawing right.

Originally one SDR was equal to 0.888671 grammes of fine gold, which was also the par of one U.S. dollar.

Specie
The term specie is used in two completely separate ways in marine insurance. The Marine Insurance Act 1906 refers to specie in the expression "loss of specie".

The term "specie" is also used as a collective noun to embrace all forms of valuables carried as cargo, including precious metals, gems, money, banknotes and valuable documents.

Specific Exclusion
A specific exclusion is one which is printed, typed, impressed on or written into a policy. A specific exclusion need not necessarily reduce the cover afforded by the policy. It may be there merely to draw to the attention of the assured the fact that the policy does not cover the excluded peril. for this reason the deletion of a specific exclusion does not incorporate into the policy, even by implication, the peril which is the subject of the exclusion. The deletion merely reverts the policy to the cover afforded before the exclusion was specified.

Specific Performance
The remedy sought by a plaintiff who, instead of damages for a breach of contract, seeks the enforcement of the terms of the contract.

Spontaneous Combustion
May occur when fibrous cargoes, such as jute, are loaded in a damp condition or when such cargoes contain an excessive amount of oil or grease, as may be the case with baled dirty wool. Soft coal, or lignite, is also liable to spontaneous combustion if loaded wet.

This is inherent nature and no claim is recoverable under the policy on the cargo which is subject to the spontaneous combustion. Fire damage to other cargoes or to the ship is recoverable under the policies applicable to such other cargo or ship as a loss by fire.

Spudding
Settling the legs of a drilling rig in the seabed.

Statement of Claim
The first step in the pleadings to an action, in which the plaintiff particularises his claim and the legal grounds on which it is based.

Statute-Barred
A debt or liability, the claim to which is barred by lapse of time under a country's Statutes of Limitation.

Stay
Wire rope running Fore and aft to the mast, as support for the mast

STC - Said to Contain
Abbreviation, commonly found on bills of lading

Stem
the foremost part of the hull

Stemming
Arranging bunkers.

Stern Thruster
A propeller or water jet system set in the stern of the ship and positioned to give a sideways thrust to assist manoeuvring in a confined space.

Stoppage In Transit
When a seller of goods finds that payment is unlikely and the goods are already en route to the buyer he has the right of "stoppage in transitu". By this right the seller can stop the delivery of the goods at destination.

The right is extinguished if the voyage is ended or if the goods have already been sold by the buyer to another person.

Straddle Carrier
A vehicle specially constructed to lift and move containers in a dock area or container terminal area.

Straight Bill of Lading (not a document of title)
A bill of lading naming a specific party as the consignee. It is non negotiable and only the named party can take delivery of the cargo.

Stranding
The term does not include bumping over a bar, a mere touch and go or a grounding by reason of the rise and fall of the tide. The vessel must be hard and fast for an appreciable period of time.

In hull insurance it is normal for a policy to contain the Customary Strandings Clause which provides that groundings in certain specified areas shall not be deemed strandings. Thus, the cost of sighting the bottom is not covered by the policy in the case of such groundings.

Strikes Cover
Limited to damage caused to insured property by strikers, locked out work¬ers and persons involved in a labour dispute. Does not include loss or expense incurred as a result of strikes.

Strike Expenses
Expenses incurred as a result of a strike, such as forwarding costs for goods that cannot be discharged at the scheduled destination port or extra freight charged for overcarriage to another port when the scheduled discharge port is strikebound.

These expenses are not covered by the marine policy with the standard strikes clauses attached thereto.

Strikes, Riots And Civil Commotions
The ICC(A) does not cover these risks, except where rioters attack a ship from the shore when they are designated as pirates.

To make the lack of cover clear to a cargo assured all cargo policies contain a strikes exclusion clause which excludes the above perils. In practice, it is usual to extend the policy to nullify the exclusion and to incorporate the risks of strikes, riots, civil commotions and malicious damage into the cargo policy by payment of a scale additional premium. the risks are usually incorporated in conjunction with war risks, the additional premium being increased to cover both sets of risks.

The risks of strikes, riots, civil commotions and malicious damage are, in a like manner, incorporated in the war policies on hull and freight. Claims under any of these clauses are payable irrespective of percentage.

Stripping
Unloading goods from a container; removing brand labels from salvaged goods before resale.
Sometimes also called de-stuffing.
Stuffing / Stripping
The action of packing / unpacking a container.

Stuffing
Placing goods into a container.

Subrogation
The right of the underwriter to step into the shoes of the insured, following payment of a claim, to recover the payment from a third party responsible for the loss. Subrogation is limited to the amount paid on the policy.

Substituted Expenses
Expenses incurred in place of loss or expense which would be allowed as general average (e.g. cost of removal of a ship, with general average damage, to a place where repairs would cost less).

Sue And Labour Clause
This clause formed part of the SG policy form and was the basis for applying to the policy expenses incurred by the assured to prevent loss for which underwriters would have been liable.

The clause was not retained when the MAR form of policy was introduced to replace the SG policy in 1982 (cargo) and 1983 (hull), and was, therefore, omitted from the new cargo and hull clauses drafted for attachment to the MAR form of policy.Nevertheless, the effect of the sue and labour clause is incorporated in the 'duty of the assured' clause in the new clauses.

Sue And Labour
It is the duty of the assured to act at all times as though he were uninsured and to take such measures for the preservation of the insured property as a prudent uninsured person would take. To this end he may sue, labour and act in defence of the property without prejudice to his rights under the policy. This means that he may taken any reasonable action or incur any reasonable expense to prevent or minimise a loss. Provided the loss which is minimised or prevented is proximately caused by an insured peril the insurer will reimburse the assured for such expense as he may so incur, whether or not the action taken is successful.

Under this principle, the insurer is liable for sue and labour charges in addition to a subsequent total loss. Such charges can only be incurred by the assured or his servants or agents and must be incurred short of destination.

In hull insurance, subject to the I.T.C., Sue and Labour expenses are recoverable from insurers, subject to the policy deductible. Sue and Labour charges can be incurred only for the benefit of the subject matter insured.

If they are for the common benefit they are not sue and labour but may be recoverable as general average.

Survey Fees And Sale Charges
These charges are extra charges which are added to any claim recoverable from underwriters with certain exceptions. It occasionally happens that a surveyor is requested by the assured to examine cargo for damage but which turns out to be sound. Underwriters are not liable for such survey fees.

Certain commodities, such as wool and fruit, for example, are sometimes shipped "on consignment", ie they were consigned to selling agents in the country of destination to be sold on behalf of the shipper for the best market price obtainable.
In these cases the costs of sale, which are to be incurred anyway, would not form part of the claim on underwriters.

Sweat Damage
Changing temperatures cause the ship’s plates in the holds to "sweat". That is, condensation forms on the inside of the holds. this can cause damage to baled cargoes and to other cargoes vulnerable to water damage. Sweating is particularly likely to occur when the ship in a humid climate encounters heavy weather so that hatches are battened down and ventilators closed.

It is, however, usually best to leave ventilators closed for cargoes which do not need ventilation, such as manufactured metal goods, because warm moist outer air drawn in through the ventilators will condense on the cold surface of the cargo in the cool hold and may result in sweat damage.

SWIFT
Society for Worldwide Interbank Financial Telecommunications

Sympathetic Damage
Loss suffered by cargo following damage to other goods in the same ship. An example would be taint arising from odour given off by another cargo.

Such loss is not recoverable under a cargo policy except, possibly, where the odour was caused by an insured peril (eg seawater entering the hold)

Syndicate (Lloyd's)
A group of underwriting members at Lloyd's whose acceptances and liabilities are handled jointly by an underwriting agency acting on their behalf, while each member remains legally liable solely for his/her own share of the syndicate's liability.

S. to S.
Station to station

s.a.n.r.
Subject to approval no risk. Subject acceptance no risk

s.a.p.l.
Sailed as per list

S.D.
Sea damaged

S/D
Short delivery

S.D.H.F.
Standard Dutch Hull Form

S.D.R.
Special drawing rights

S.G.
Ship and goods (Letters now meaningless, at head of traditional marine policy form)

S.O.L.A.S.
Safety of life at sea

S.R. & C.C.
Strikes, riots and civil commotions

S.R. & C.C. & M.D.
Strikes, riots, civil commotions and malicious damage

S.R.L.
Ship repairer's liability

S.S.
Steamship

S.S. or B.
Stranded, stunk or burnt

S.S.O.
Struck submerged object

S.W.D.
Sea water damage

s/a
Subject to approval

S/A
Subject to acceptance. Salvage Association


T

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Tail Shaft
Extreme section at the aft end of a ship's propeller shaft.

Taint
The passing of an odour from one cargo to another

Tale Quale
As it arrives.

Expression used particularly in the grain trade, agreement to which means that the buyer will accept the cargo in the condition in which it arrives without question as to quality or soundless. the terms are subject to a satisfactory certificate of quality at the port of shipment. Usually these terms are acceptable only where grain is carried in dry cargo vessels and not in tankers.

Tank Top
Upper plating of the double bottom in a ship.

Tanktainer
A cylindrically-shaped container intended for transport of bulk liquid cargo.

Tare
The weight of a container, box or other carrier of goods when empty.

Tariff
A tariff (or tariff schedule) is a list of taxes (or 'Duties") levied by a government on the import (and sometimes export) of items from other nations. Tariffs may be levied on selected products or groups of products or may apply across all products, and they may differ for goods from different countries. Tariffing raises the final landed cost of imports to the consumers within the importing country, and so should act to curb local demand for imported goods in favour of locally produced equivalents.

Telemotor
Machinery which operates the steering system of a ship.

Temporary Repairs
Where a ship is in a port where repairs cannot be effected or where the insurer does not wish repairs to be carried out it is usual to effect temporary repairs to make the ship seaworthy in order to remove her to the repair port. When the cost of the final repairs is recoverable under the policy, the cost of temporary repairs is also recoverable. The policy does not cover the cost of temporary repairs which are effected purely for the shipowner’s convenience. So far as general average is concerned temporary repairs are allowed only when necessary for the common safety. Where temporary repairs of accidental damage are effected in order to enable the adventure to be completed the cost of such repairs is allowed in general average but only up to the saving in expense which would have been allowed in general average if such repairs had not been effected. New for old deductions are not applied in general average in respect of temporary repairs.

Tender Clause
A clause in a policy covering hull and machinery of a ship. It specifies the measures the assured must take in the event of an accident, whereby a claim may arise under the policy, regarding advice to underwriters and Lloyd's agents and survey arrangements.

The clause also gives underwriters rights regarding the taking of tenders for repairs, deciding the place and firm of repair and acceptance of the successful tender. It details the assured's rights in regard to delay experienced in awaiting further tenders requested by underwriters. A penalty is applied to the assured's claim for non compliance with the terms of the clause.

Terms of Sale
The sale of any goods involves the exchange of ownership between a Seller and Buyer. This contract of sale will state the responsibilities of each party and these responsibilities or terms are normally referred to by using the INCOTERMS, common terms being:
EX WORKS (... named place)
FCA FREE CARRIER (... named place)
FAS FREE ALONG SHIP (... named port of shipment)
FOB FREE ON BOARD (... named port of shipment)
CFR COST AND FREIGHT (... named port of destination)
CIF COST, INSURANCE AND FREIGHT (... named port of destination)
CPT CARRIAGE PAID TO (... named place of destination
CIP CARRIAGE AND INSURANCE PAID TO (... named placed of destination)
DAF DELIVERED AT FRONTIER (... named place)
DES DELIVERED EX SHIP (... named port of destination)
DEQ DELIVERED EX QUAY (DUTY PAID) (... named port of destination)
DDU DELIVERED DUTY UNPAID (...named place of destination)
DDP DELIVERED DUTY PAID (... named place of destination

Terms or Methods of Payment
If the insured has not received payment for any reason, they must dispose of the goods and, therefore, still have an insurable interest.
The following are the more common terms of methods of payment:

  1. Collection by Draft – The seller bears the risk until they are paid. If for some reason the buyer does not accept the shipment, the seller has the problem of disposing the goods. By arranging the insurance, the seller can minimize the risk of loss.
  2. Open Account – When sales are made on an open account, the seller has financial risk similar to collecting by draft. Here again, the seller should attempt to arrange the insurance.
  3. Letter of Credit – In this procedure, the buyer establishes credit through their financial institution in favour of the seller. If the seller collects by this means, the letter of credit often stipulates that they arrange the insurance.

TEU
Twenty-foot Equivalent Unit
e.g. 1 x 40ft = 2 TEU
1 x 20ft = 1 TEU

THC
Terminal Handling Charge. A charge for handling FCLs at ocean terminals. Also known as a Container/Port Service Charge.

Third Party Liability
Legal liability to anyone other than another party to a contract (e.g. liability of one ship to another consequent upon a collision).

In marine insurance terms, the two parties to the contract are the insured and the underwriter. Anyone else is s third party.

Three Leader Agreement
A term that originated in the London market.

A condition in a slip or policy whereby the subscribing underwriters allow the leading underwriters to agree amendments etc., to the insurance on their behalf. Where both Lloyd's and ILU companies share the slip it is understood that the first two underwriters in each market subscribing the risk shall indicate their agreement to amendments, etc. It is, also, understood that the leaders' agreement relates only to changes which do not materially affect the cover (eg they cannot increase written lines).

Through Bill
A contract of affreightment that covers goods throughout the period of transit, including both overland and sea transit.

Time Charter
A contract for the hire of a ship.

The charterer has the use of the vessel for a specified period. The shipowner supplies the crew and provisions.

TIR

  1. (Europe)Transports International Routiers - A system involving the issue of a carnet to road hauliers which allows loaded vehicles to cross national frontiers with minimum Customs fomalities.
  2. (U.S.) Trailer Interchange Receipt
    Receipt to Shipper delivering a loaded export container to a terminal.

Tomming Off
Using wedges between cargo and the ship's side or a bulkhead to prevent movement of the goods during transit.

Ton & Tonne
Ton = 2240lbs Tonne = Metric measurement of weight. 1000 kilograms.

Tonnage Deck
The uppermost continuous deck in ships having less than three decks, or the second continuous deck from below.

Tower's Liability
Liability incurred by any ship or vessel when she is towing another ship, vessel or other object.

Trade Ullage
An allowance for natural loss to cargo (eg evaporation).

Transhipment
The act of transferring goods from one vessel to another or from one conveyance to another, including periods at transhipping ports or places.

Transire
A Customs document used when a vessel is coasting, giving full cargo details. It serves as clearance from the port of issue.

Transit
Goods are in transit when they are out of the immediate control of the two commercial contracting parties i.e. "in the transport chain". The ICC(A) further defines the commencement of transit as the time when the goods pass through the warehouse gates on their outward journey.

Transtainer
A vehicle used for carrying cargo containers during loading or discharge operations or within port of terminal areas

Transverse
Across a ship at right angles to a line drawn from bow to stern.

Trucker
(U.S.) A road transport operator (a haulier in the he UK).

Trunking
Movement of containers between terminals and container freight stations or container yards

TTO - Through Transport Operator
A Carrier who contracts to carry goods (only part of which carriage he undertakes himself) on the basis that he is a principal whilst the goods are in his personal care and an agent only whilst they are not.

Tween Decker
Any ship having one or more decks below the main deck.

t. & s.
Touch and stay

T.D.W.
Tonnage deadweight

T.L.O. excs and T.L.O. exs
Total loss only and excess liabilities

T.L.R.
Times Law Reports

T.L.V.O.
Total loss of vessel only

T.O.R.
Time on risk

T.O.V.A.L.O.P.
Abbreviation for "Tanker Owners' Voluntary Agreement Concerning Liability for Oil Pollution".

A pollution agreement that was subscribed to by most tanker owners world-wide, whereby owners agreed to pay jointly for clean-up costs incurred by Governments in respect of oil discharge from tankers belonging to such owners.

T.P.N.D.
Theft, pilferage and non-delivery


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Uberrimae Fidei
Latin legal phrase that means "Utmost Good Faith".

UCP - Uniform Customs and Practice for Documentary Credits
The "Bankers Bible" on Documentary Credit interpretation issued by the ICC.

UNCITRAL
United Nations Commission on International Trade Law

UNCTAD
United Nations Commission on Trade and Development

UNCTAD MMO
UNCTAD Multi Modal Transport Convention

UNICITRAL
United Nations Commission on International Trade Law

UNICON - Uncontainerable Goods
Goods which, because of their dimensions, cannot be containerised and which are therefore carried other than in a container.

Unrepaired Damage
This term relates to damage to an insured ship that has not been repaired at the time the policy expires.

It applies to both time and voyage hull policies, and provides that underwriters are not liable for unrepaired damage if the ship becomes a total loss from any cause (insured or not) before the expiry of the policy period. If the ship was not a total loss, the assured could normally claim a depreciation allowance for unrepaired damage, caused by an insured peril, on expiry of the policy.

Unvalued Policy
A policy that does not express the insured value of the property insured, as distinct from the sum insured by the policy.

A claim under an unvalued policy is limited to the insurable value of the subject matter insured at the time of loss, even though the sum insured maybe more that the insurable value.

Unvalued policies are normally used for policies covering such hull interests such as 'excess liabilities' and 'anticipated freight'.

Utmost Good Faith
A basic principle of insurance. Mutual trust in negotiating an insurance con¬tract. The insured and their broker must disclose and truly represent every material circumstance to the underwriter before acceptance of the risk. A breach of good faith entitles the underwriter to avoid the contract.

U. & O.
Use and occupancy

U.C.B.
Unless caused by

U.O.R.
Under one roof

U/R
Under repair. Underwriting

U/W
Underwriter


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Valuation Clause
Provides the basis for determining the insured value of a shipment under the Open Cargo policy.

Valued Bill of Lading
A bill of lading issued by the carrier which indicates the amount which the shipper has declared as the value of the merchandise. The carrier will be liable for this amount in the event he is found responsible for loss or damage to the merchandise.

Valued Policies
A marine policy may be valued or unvalued.

A valued policy is one which specified the value, usually with the words "valued at" or "so valued". The value in a valued policy is agreed at inception and, in the absence of fraud, is conclusive as between the insurer and assured, irrespective of whether or not it is the true value. It may only be reopened in the case of fraud or of gross over-valuation of cargo. In practice cargo policies are always valued because an unvalued policy is subject to the measure of indemnity and the valuation provisions laid down by the Marine Insurance Act, 1906, whereby the assured cannot include the profit earned by the sale of the goods. This places him in a position as though the adventure had never commenced.

A valued policy allows the assured to include the profit so that in the event of loss he is placed in the position as though the adventure had been completed. In hull insurance a valued policy is used because an old vessel is as valuable a freight earner to the assured as a relatively new vessel. For this reason, the assured wishes to insure for an amount which bears some relation to the vessel’s true value to him rather than its market value. A valued policy enables him to do this. such a valuation is acceptable to insurers, particularly as partial losses are payable in full under a valued hull policy, without reference to the true value, and over-valuation of this nature tends to increase the premium income to cover such partial losses.

VAT
Value added tax

Vice Propre
Means Inherent vice.

Voidable Policy
Where the underwriter has the right to avoid a policy (e.g., in the event of a breach of good faith), the policy is termed "voidable."

Voyage Charter
The shipowner hires out his vessel, subject to various conditions, for the carriage of cargo for a single voyage.


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Waiver Clause
A clause which entitles both underwriter and assured to take measures to prevent or reduce loss, without prejudice to the rights of either party.

Wale
A thick plate, on a ship, designed to withstand heavy impact.

War Risk
Insurance against loss or damage to property as a result of war risks.

Warehouse to Warehouse
An export/import policy clause that provides protection from the shipper’s warehouse and during the ordinary course of transit to the consignee’s warehouse.

Warping
Using ropes or cables to manoeuvre a ship.

Warranty
A warranty in a marine insurance policy is an undertaking by the assured, whereby he promises that a certain thing shall be done or shall not be done, or that some condition will be fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. A warranty may be express or implied, and must be complied with literally.

Failure to comply with the warranty is termed 'breach of warranty', which, if not excused, discharges the underwriter from all liability under the policy as from the date of the breach.

Warsaw Convention
Defines the responsibilities and liabilities of air carriers transporting mer¬chandise in international trade.

Waterborne Agreement
An understanding in the British marine insurance market, agreed in the 1930s, whereby underwriters will cover goods against war risks only while they are on board an overseas vessel.
Limited cover is allowed while goods are in craft en route between ship and shore and, also, during transhipment.

Waybill
A bill of lading issued by a carrier showing the merchandise to be trans¬ported and shipping instructions. It is usually used by airlines and truckers.

Weather Working Day
A day of 24 hours on which work is not prevented by bad weather. Usually used in contractual terms in charterparties.

Weight / Quantity / Quality Certificates
These are separate certificates issued by the seller or an independent third party that certifies the weight / quality / quantity of the shipment. These are usually required when dealing with bulk commodities. e.g. edible oils, such as soya bean oil, from Malaysia. Claims officers should be aware that sometimes the measurement method in the receiving country may inadvertently different to that at the port of export. For example, bulk molasses from Australia (which has to be heated to a high temperature to pump through pipes) can be measured by physical weight, or displacement volume either on board the vessel or in a shore tank. At first sight these documents seem to be of great assistance to a claims officer dealing with a shortage of product, but some considerable research needs to be done to ascertain the exact methodology.

Wharfage / Wharf Handling
These are port charges usually payable both at shipment and the discharge port. Wharfage is a charge levied by the port authority on the shipper basically for using the port facilities. A charge will be levied at each end by the respective ports: a goods outwards wharfage for exports, goods inwards wharfage for imports.

Wharf handling, alternatively known as the port service charge, is charged to the shipper (in the case of goods going out) by the shipping company. Basically it covers the marshalling costs, ie taking cargo from the wharfside to under ship's hook (FAS point) and would include normal storage costs.

Wharfinger
The person in charge of a wharf.

A Wharfinger's Legal Liability policy (also referred to as Landing Owner's Legal Liability) provides cover for legal liability arising for damage or injury caused by any defect or unsafe condition of the owned or operated dock

Wilful Misconduct
Is an intentional act of wrongdoing. The insurer cannot be held liable to pay any claims under the policy which are attributable to the wilful misconduct of the insured. As specified in the Marine Insurance Act, misconduct or negligence on the part of the master or crew does not give the insurer the right to repudiate a claim proximately caused by a peril insured against.

Without Benefit of Salvage
A term in a marine insurance policy whereby the underwriter forgoes his subrogation rights. A marine insurance policy that incorporates such term is deemed by the Marine Insurance Act to be a gambling policy and, as such, is invalid in a court of law.

Without Prejudice
In cases where the insurer is presented with a claim for which there is no strict liability under the policy terms, it may be agreed to pay the claim on a "Without Prejudice" basis. This means the payment is without argument on this particular occasion but it is not to be used as a precedent or basis for demanding settlement of similar future claim.

Wtd.
Warranted

W.B.S.
Without benefit of salvage to the insurer

W.R.O.
War risk only

W/W
Warehouse to warehouse


X

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XL
Excess of Loss

Xs Loss
Excess of loss reinsurance


Y

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Y.A.R.
York-Antwerp Rules

York/Antwerp Rules
An international code governing General Average.

Y.O.A.
Year of account


Z

 


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© 2017 The Candian Board of Marine Underwriters
cbmu.com
 | cbmu@cbmu.com

© 2017 The Candian Board of Marine Underwriters
cbmu.com
 | cbmu@cbmu.com