Page 15 - Insurance Times May 2020

Situations View Points / Possible solutions
1. The road vehicles are struck on the way due to Yes, since the vehicles are in transit, such a situation will be
lockdown (may be at border, may be any place treated as ordinary course of transit and held cover as per
midway)...... Is the insurance cover available in the Duration clause 6.1. under the ITC - A
case of an insured peril, operating? ....
2. The road vehicles or rail have reached the The cover under Duration clause is available for only 7 days
destination town, but are unable to reach the final from the time it has reached the destination town. Within
destination....Is the insurance cover available in this period the goods have to reach final destination and
case of an insured peril, operating? get unloaded ...else the policy terminates.
3. The road vehicles or rail have reached the Though the delay is beyond control of assured and the cover
destination town, in fact the final destination, but should continue as per clause 6.2 of the Duration clause,
unable to unload due to lack of manpower / they are still subject to the timelines mention under clause
premises being closed 6.1 ( i.e. 7 days from the time it enters the destination
town). So , if the unloading does not happen , again the
policy will terminate on expiry of the 7 days In fact the
Duration clause 6.1.3 also states that .....Policy will
terminate "When the Assured or their employees elect to
use any carrying vehicle or other conveyance or any
container for storage other than in the ordinary course of
transit"
4. Goods have been discharged from vessels, but are The insurance cover is valid for 60 days from the time the
lying in port due to non clearance from customs / goods are discharged from the vessels( 30 days for aircraft)
lockdown in cities as per ICC - A , within which the same should reach final
destination and goods should be unloaded.
5. There will be accumulations at various places .... It is time to review the " per location limit " ...if the same
port, borders, eateries on highways, outside the is breached , loss will be paid till PLL only ( in fact as per
final destination. ..Any concerns? Marine Insurance act 1906 , underinsurance can also apply,
depending on how the insurers view the same )
6. It is possible that a vessel (air or sea) carrying cargo a. Can the cargo owner recover the damages from the
from or to countries affected by the virus and going carrier? …..Carriage contracts are normally governed
to another destination, may not be allowed to enter by the Hague- Visby rules and the Article IV of these
the port of destination. The vessel may be redirected rules mentioned that the carrier cannot be held
to a new destination OR may be quarantined. The responsible , if there is a quarantine
consequence of this can be, either of the following: b. Goods getting damaged during the quarantine period
a. Non delivery of the consignment to the proximately caused due to the delay in reaching the
concerned person final destination …can they be covered under the cargo
b. Damage to the cargo (perishable cargo) till the owners (buyer or seller depending on the terms of
time the vessel is allowed to return to the trade) marine insurance policy? …….. Exclusion 4.5 of
original destination. the ICC clause mentions: "loss damage or expense
caused by delay, even though the delay be caused by a
risk insured against". Thus this clause would result in
such losses getting rejected. Even Section 55(2) (b) of
MARINE Insurance act, 1906 speaks about this
exclusion.
7. If the cargo cannot be delivered at the original port Termination of Contract of Carriage...clause 9 of ICC -A,
of destination due to the threat of the virus, and is clearly mentions that even if the circumstances are beyond

The Insurance Times, May 2020 15