Marine Insurance: Law and Practice




14.1 This chapter has a broad title. Indeed, it may be overly broad in that all, or at least nearly all, of the risks which can be insured under a contract of marine insurance may be considered to be marine risks. However, it does contain the core of risks to be found in most ordinary contracts of marine insurance insuring against physical loss, ie loss to property, and related losses. It is appropriate to deal in separate chapters with: liability and associated risks;1 risks arising from discord (“war and strikes”);2 and those concerned with aversion and minimisation of loss.3 It is also convenient to place together in one chapter those risks that are normally accorded special treatment in hulls and freight clauses in the Inchmaree clause.4

All risks

14.2 Although the possibility of insuring ships against all risks is sometimes aired, the practice continues to be to insure ships against specified individual risks. This also happens with the (B) and (C) clauses of the Institute Cargo Clauses. However, cargo is more commonly than not insured against “all risks”. Thus, of the seven basic sets of Institute clauses, one, and one alone, provides for cover against all risks, namely, and appropriately, the Institute Cargo Clauses (A). 14.3 The first, obvious point to note about such cover is that such insurance, as with all contracts of insurance, takes effect as part of, and subject to the other terms of, the whole contract. Thus, the underwriter is not, under the (A) clauses, simply liable for all risks without qualification. Of the three “Risks Covered” provisions of the (A) clauses, clause 1 (the “Risks Clause”) provides that “This insurance covers all risks of loss of or damage to the subject-matter insured except as provided in clauses 4, 5, 6 and 7 below”.5 The potentially comprehensive cover is therefore restricted by the exclusion clauses. Also, the insurance is only against “loss of or damage to the subject-matter insured”. That will not necessarily lead to the assured’s being indemnified for every loss he suffers consequent upon the operation of a peril, thus requiring additional cover. Despite the all risks cover in clause 1, therefore, the (A) clauses “risks covered” provisions also include a general average clause6 and a both to blame collision clause.7 14.4 The expression “all risks” contains within itself a limitation on the circumstances in which the underwriter must indemnify the assured, a limitation that derives from the general concept of insurance.8 In Schloss Bros v Stevens 9 Walton J said that the words:

“‘all risks by land and water’ etc must be read literally as meaning all risks whatsoever. I think they were intended to cover all losses by any accidental cause of any kind occurring during the transit … There must be a casualty”.

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