Marine Insurance: Institute Cargo Clauses ( “ICC”) 2009
The archaic term “servants” in Clause 4.3 of ICC 1982 has been replaced with the term “employees” in Clause 4.3 of ICC 2009″.
The ICC 1982 were recently revised and updated, with the new ICC 2009 finally coming into effect on 1 st January 2009. The overall result of the amendments to the 1982 Clauses are to make them more favorable to the Assured in general, as will be shown below.
- Terms and Language used
Some of the terms used in the 1982 Clauses have been updated or adapted, for greater clarity.For example, the term “goods” has been dropped and replaced with the term “Subject-matter insured”. This is because “goods” alone did not accurately describe the range and type of cargoes insured.In addition, the term “Assured” has been defined under Clause 15 of the ICC(A) (all risks) clauses. “Assured” has been adapted to include either the person by or on behalf of whom the contract of insurance was effected or the assignee.
Furthermore, some terms have been updated and/ or replaced. Notably, the archaic term “servants” in Clause 4.3 of ICC 1982 has been replaced with the term “employees” in Clause 4.3 of ICC 2009. Similarly, the term “underwriters” has been replaced with “insurers” in Clause 17, amongst other clauses.
Notably, the above mentioned amendments to terms have been followed through with regard to both the ICC(B) and ICC(C) clauses.
- Commercial changes
Some of the more relevant changes include, but are not limited to:
- Insufficiency of packing;
- Change of voyage; and
- Insolvency exclusion.
As noted at the beginning of this brief update, the new ICC 2009 now has terms more favorable to the assured. A classic example is Clause 4.3, which falls under “exclusions” in ICC(A) 2009.
Namely, Clause 4.3 now sets out the standard of insufficiency or unsuitability- which is that such packing or preparation must be sufficient “to withstand the ordinary incidents of the insured transit”.
Furthermore, Clause 4.3 does not consider independent contractors to be “employees”. This now means that the new Clause 4.3 is limited to cases where the assured or their employees themselves are responsible for poor packing or preparation.
With regard to change of voyage, under the new Clause 10, the assured now clearly knows the steps to be taken to ensure that they enjoy coverage. This clarifies the position which was previously set out in ICC 1982, in that the term “held covered” has been removed, which caused some confusion as to the actions required to be taken by the Assured so that they are covered by insurance and its implications.
Furthermore, Clause 10.2 covers the “phantom ship” situations where vessels with false papers take the cargo to a different destination and sell it. Under ICC 2009, as long as the Assured or their employees have no knowledge of such alteration in destination, the insurance still attaches to the voyage.
As seen above, we have briefly outlined some of the changes and improvements incorporated in the ICC 2009, particularly with regard to ICC (A).
By Rahayu Partnership, Malaysia
Law Firm Website: www.rahayupartnership.com