An unforeseen occurrence of happening; fortuitous event.

A natural event, not preventable by any human agency, such as flood, storms, or lightning. Force of nature that a carrier has no control over, and therefore cannot be held accountable for.

The broadest form of coverage available, providing protection against all risk of physical loss or damage from any external cause. Does not cover loss or damage due to delay, inherent vice, pre-shipment condition, inadequate packaging, or loss of market. Loss must be fortuitous to be covered.

Goods that are not particularly susceptible to loss or either by reason of their nature or because they are well packed. This term embraces practically all manufactured articles or new merchandise.

Description of the terms under which damaged property is sold, meaning that it is to be sold at its present location and in its present condition without warranty as to quality or quantity. See "Salvage Value".

The perils Clause establishes the basic perils that are covered by the policy, and a total loss due to one of these perils is covered in full. The various Average Clauses determine when PARTIAL LOSSES due to a peril in the Perils Clause are covered. The Average Clauses fall into two categories: F.P.A. (Free of Particular Average) and W.A. (With Average).

A contract to rent a vessel without equipment, crew, fuel, or stores.

The document issued on behalf of the carrier describing the kind and quantity of the goods being shipped, the shipper, the consignee, the ports of loading and discharge and the carrying vessel. The Bill of Lading serves as:

A) Receipt for the merchandise given to the shipper by the carrier

B) Document of title giving lawful possessor title to goods

C) The contract of carriage between shipper and carrier; and

D) Evidence of the apparent condition of the goods when     received by the carrier. (If the cargo shows damage, the     Master will note exceptions on the B/L, e.g., "all coils     rusted," or "13 bags broken and leaking." A B/L lacking     such exceptions is a "clean" Bill of Lading, and prima facie     evidence of the apparent good order of the cargo).

Loose cargo, such as cartons, stowed directly in the ship's hold as opposed to containerized or bulk cargo. See "Containerization".

Shipments which are not packaged, but are loaded directly into the vessel's holds. Examples of commodities that can be shipped in bulk are ores, coal, scrap, iron, grain, rice, vegetable oil, tallow, fuel oil, fertilizers, and similar commodities.

1936 U.S. Statute governs the acts that a carrier is responsible for, and it defines the terms used in shipping. The act provides that the shipowner's liability will be limited to $500.00 per shipping package, and it states that there is a one year time limit for filing suit against the carrier. This act automatically applies to international ocean movements but not to domestic ocean transits unless the carrier agrees to be bound by it

Usually means Steamship Company, but can also refer to trucking company, airlines, or railroads as transporters of cargo.

Document issued on behalf of the Underwriter stating the terms and conditions of the marine insurance. Issued when evidence of insurance is required, as by the bank issuing the Letter of Credit (especially on export shipment.)

One who rents, hires, or leases a vessel from its owner.

A document containing the terms of a contract for the renting or leasing of a vessel by the owner to the charterer.

In marine insurance, a vessel striking another vessel or floating (not stationary) object.

The seller's bill of sale for the goods sold, specifying type of goods, quantity and price of each type, and terms of sale.

Transporter who hold himself out to the general public for the transportation of goods over a definite route and according to a regular schedule.

Damage to the contents of a package which is apparently in good condition externally.

Shipping system based on large cargo-carrying containers ranging up to 40' long that can be easily interchanged between trucks, trains, and ships without rehandling the contents.

A coverage contingent upon non-performance of a policy issued abroad. If the Assured buys or sells on terms under which the insurance is arranged by the other party, and that Insurance protects the Assured's interest in such shipment.

The contract of carriage between shipper and carrier, usually expressed in the Bill of Lading, but subject to the Carriage of Goods by Sea Act if a United States Port and a foreign port are involved.

Form filled out by Assured and sent to the broker and insurance company when reporting individual shipments coming within the terms of an Open Cargo Policy; usually used for declaring import shipments where evidence of insurance is not required. See "Certificate".

Even under All Risks coverage, damage due to delay is not recoverable. Most Underwriters have inserted a "Delay Clause" in the Open Cargo Policy, which states specifically that damage caused by delay is not recoverable even if the delay was due to a peril insured against.

1) Penalty charged to cargo that is held beyond the generally allowed number of days"free time" before it is picked up by consignee.

2) A penalty that Charterer pays vessel owner for keeping vessel at port of, loading or discharge longer than agreed in the Charter Party.

The prevention, by governmental authority, of vessel and/or cargo leaving port, particularly during time of hostilities.

Any unexcused departure from the prescribed or customary way of pursuing the intended voyage covered by the Policy that is of enough significance to alter the risk, such as altering the intended route. Stowage of cargo on deck when an "Under Deck" Bill of Lading has been issued is considered a deviation. An Open Cargo Policy generally includes the Deviation Clause, protecting the cargo owner in case of deviation or change of voyage, or in case of error in the description of the interest, vessel or voyage. The carrier loses the benefit of the Exemptions from Liability in the U.S. Carriage of Goods by Sea Act in the case of intentional deviation, unless such deviation be for the purpose of attempting to save life, or property at sea.

An Open Cargo Policy provides automatic coverage on those shipments which the Assured is obligated to insure and specifically excludes coverage on those shipments which the Assured is not obligated to insure, such as those purchased C.I.F. However, the party responsible for insuring such shipment could be purchasing insurance with more limited insuring conditions than the Assured would have under his own Open Policy, had he had the responsibility of placing the insurance. A D.I.C. Endorsement gives the Assured coverage for the difference in conditions between the coverage provided by the Policy covering the shipment and the broader conditions provided by the Assured's Open

Uninterrupted movement of goods from point of origin to destination without delay caused by cargo owner.

Loose wood or other material used in a vessel's hold to secure and support cargo during voyage to prevent movement.

A notation on a shipping document (Bill of Lading or Delivery Receipt) qualifying the condition of the merchandise to indicate damage.

A Marine Cargo Policy normally covers only while in due course of transit. An Exhibition Cover extends coverage to include while the merchandise is on exhibit (usually at a trade show) and the return shipment (unless the merchandise is sold). Only the Marine Policy can be so extended to cover while ashore; the War Policy cannot.

Clause excluding war risks from the Marine Policy; war risks can be covered by issuing a separate War Policy with an additional premium being charged

1851 U.S. Statute that provides no shipowner can be held liable for any loss or damage to merchandise on board his vessel by reason of fire on board unless this fire has been caused by the design or neglect of the shipowner.

If a merchant sells on F.O.B., F.A.S., C&F, or similar terms, it is the buyer's responsibility to place the marine insurance. However, if the buyer purchases marine insurance that does not have a "Warehouse-to-Warehouse" Clause, or Marine Extension clauses, the coverage may not attach until the cargo is placed aboard the vessel. If the merchant has an Open Cargo Policy, an F.O.B./F.A.S. Endorsement provides automatic coverage on such shipments until such time as the buyer's policy attaches. A type of Contingency coverage.

Limits recovery of partial losses to those directly CAUSED BY the vessel stranding, sinking, burning, or being in collision with another vessel.

Limits recovery of partial losses due to a peril in the Perils Clause to those occurring on a voyage in which the vessel is stranded, sunk, burnt, or in collision with another vessel. Under F.P.A.E.C. it is NOT NECESSARY that the actual damage be caused by the vessel stranding, sinking, burning, or being in collision, but only that one of these HAS OCCURRED during the voyage to open up the F.P.A. Warranty.

The percentage of insured value of fixed dollar amount in the policy which must be reached before an insured loss is paid in full.

Similar to a deductible in that insured losses less than the franchise are not paid. Different from a deductible in that insured losses equal to, or more than, the franchise are paid in full.

Ancient principle of equity in which all parties in a sea adventure (ship, cargo, and freight) proportionately share losses resulting from a voluntary and successful A) Sacrifice of part of the ship or cargo to save the whole adventure from an impending peril, or B) Extraordinary expenses necessarily incurred for the joint benefit of ship and cargo.

A marine specialists who adjusts and prints the statement of General Average; appointed by the shipowner, as a rule, and in the United States is usually a member of the Association of Average Adjusters; collects security and authorizes release of cargo to owners when cargo is fully secured.

A bond prepared by the General Average Adjuster wherein the owner of the goods binds himself to pay his proportion of the General Average. Ordinarily General Average Adjusters will not authorize delivery of the goods to the owner until he signs this bond which is AKA Average Agreement.

A cash deposit (usually based on the estimated percentage of General Average) which the General Average Adjuster demands from the owner of the goods to secure the payment of his proportion of the General Average. This cash deposit is usually demanded as additional security to the General Average Bond. See "General Average Guarantee".

The Insurance Company's written guarantee to the Adjuster guaranteeing to pay the proportion of General Average finally assessed against the goods insured. This guarantee is usually accepted by the Adjuster in lieu of a cash deposit and is additional security to the bond signed by the owner of the goods.

A set of rules for the regulation of foreign bills of lading in the carriage of goods by sea that resulted from a 1921 conference of maritime nations at the Hague. The 1922 revised Hague Rules were recommended to the governments of the maritime nations or adoption as the basis for their Carriage of Goods by Sea Act which would provide for enforcement. The U.S. adopted the Hague Rules with some changes in 1936 when it passed C.O.G.S.A.

1893 U.S. Statute that relieves the owner of a ship from the consequences of careless or negligent acts in the navigation or in the management of the vessel, and from liability for losses caused by inherent defects or weakness in the vessel itself, provided the owner or his manager has taken all precautions to furnish a seaworthy vessel that has been adequately equipped and manned by a competent master and crew; this act still applies to domestic water shipments by common carriers, although it has been superseded by C.O.G.S.A. on shipments to and from foreign countries.

Insurance that covers an increase in the value of the property insured. A rising market usually necessitates such insurance, which is ordinarily for a separate amount in excess of the total insured value of the property which has increased in value.

Means that all loss or damage due to a peril insured against is collectible in full, without a franchise having to be reached, or a deductible applied. See "Average Clauses".

A policy in which two or more underwriters (companies) participate insuring a single risk. This is not reinsurance.

A transportation system in which specially designed barges (lighters), after being loaded with cargo, are loaded aboard the vessel to become an integral part of the vessel. See "Lighter".

The most common method of financing ocean cargo shipments, whereby a fund is established by the buyer in a bank located near the seller, against which the seller is authorized to draw drafts for goods purchased by the buyer.

A large, open flat-bottomed barge used in unloading and loading ships wherever shallow water prevents the ships from coming into shore.

U.S. Act of 1851 granting a shipowner the right to limit his liability for the damage arising out of a collision (provided the collision occurred without his privity or (knowledge) to the value of the vessel at the end of the voyage on which the collision occurred.

An alphabetical register of vessels completely describing them and containing other information valuable to a Marine Insurance Company; published by Lloyds Register of Shipping.

Document signed by the Assured where he acknowledges receipt of money advanced by the insurance company as an interest free loan (instead of payment of a loss) repayable to the insurance company only if the loss is recovered from a third party and then only to the extent of the recovery.

A situation in which, for one reason or another, sound cargo is no longer wanted by the consignee when it arrives. This is a "business loss" not recoverable under a Marine Cargo Policy; e.g. Christmas trees arriving in January undamaged.

Clause "temporarily" added to the Cargo Policy during World War II to extend the Warehouse Clause to provide automatic coverage on the cargo form the time it leaves the warehouse of origin until it arrives in the warehouse at destination, regardless of any deviation, delay, forced discharge, reshipment, transhipment, or any other interruption in the due course of transit beyond the control of the Assured. The clause is still common to most cargo policies. See "Warehouse to Warehouse Clause".

A cargo loss in which an entire shipping package is missing at destination without any evidence of the cause of its loss; does not include pilferage.

Cargo carried on the main deck of the vessel, or other spaces above the main deck; cargo carried on deck is subject to damage by wind, sea water, and being washed overboard.

A cargo policy with no expiration date that provides automatic coverage of cargo shipments to or from an Assured in a specified trade at agreed rates, terms, and conditions. Usually consists of separate Marine and War policies.

A partial loss of the property insured caused by a peril insured against, and which is not a General Average loss.

Cargo is insured at an agreed valuation; therefore, the surveyor establishes the percentage of damage to the goods which is then applied to the agreed value to determine the amount of claim. Where a percentage of damage cannot be agreed, it is common for the damaged goods to be sold. The amount of claim is then computed by determining the sound market value of the goods on the date of sale (as if undamaged), comparing it to the amount for which they were sold, thereby obtaining a percentage of depreciation which can be applied to the agreed value.

Fortuitous accidents or casualties, peculiar to transportation on navigable water, such as stranding, sinking, collision of the vessel, striking a submerged object, or encountering heavy weather or other usual force of nature.

Document signed by third party claimant in which he acknowledges receipt of claim payment (by or on behalf of Assured) and agrees to make no further claim.

A specially constructed vessel having a ramp on the top which can be raised to a vertical position and lowered to permit trucks and trailers to load under their own power.

1) The service rendered by a third party for assistance in saving ship or cargo from peril.

2) The monetary award granted for such service.

3) That which is saved.

1) Adjustment of a C.T.L. claim on property where the salvage received by the Assured is deducted from the insured value, and the difference is paid by the Underwriter to the Assured.


2) Can only be used to adjust PA claims if agreed by Assured and Underwriters prior to the loss. See "Particular Average (PA) Adjustment".

The amount of money realized by selling damaged property. Also used to describe that portion of the property itself which is salved from a loss; i.e. salvage.

The sound condition of a vessel enabling it to successfully meet all the varying conditions of sea, wind, and weather normally to be expected on the voyage.

Note on bill of lading indicating that the contents of a container were loaded and counted by the shipper and not checked or verified by the Steamship Company.

A vessel losing buoyancy and becoming submerged. It is not necessary that she disappears, as a vessel may sink in shallow waters. If she is submerged to the depth the water permits, she is a sunken vessel.

The grounding of the vessel, causing her to remain fast for an appreciable length of time. Mere contact with the ground in which the vessel, without losing her momentum, proceeds on her course, commonly termed "touch-and-go", is not considered a stranding.

The operation by which the insurance company (on payment of a claim) assumes all of the assured's rights to recovery from any third parties; substitution of one creditor for another.

A document signed by the cargo owner acknowledging receipt of payment of a claim, and assigning his rights of recovery (against any third party) to the insurance company.

The clause in a marine policy requiring the Assured, in the event of a loss, to act as a prudent uninsured and minimize damage by taking steps to save and preserve the property from further loss or damage. The clause provides that charges or expenses reasonably incurred in preserving the property are recoverable from Underwriters, if the loss itself is recoverable.