Concealed Damage Clause

Marine insurance policy in India is an insurance category that protects against maritime risks, such as cargo loss or damage to cargo, ships, or other vessels.

There are two major categories of marine insurance: cargo insurance and hull insurance. Under cargo insurance, loss or damage to goods during transit visas by sea, air, and land are covered. On the other hand, hull insurance provides coverage for physical damage to the ship or vessel, including its machinery, equipment, and other parts.

However, we will focus on cargo insurance and the various clauses included in it to protect the interest and hold the liable party accountable in case of any damage or loss. Let us understand some crucial clauses of marine cargo insurance.

Clauses in Marine Insurance

• Institute Cargo Clauses: These are standard clauses that define the scope of marine insurance; their varying versions provide different levels of protection, such as:

• ICC (A) covers all types of risks except the especially excluded ones, i.e., nuclear peril, war, inherited vice, etc.

• ICC (B) covers perils on the plan, i.e., fire, theft, collision, stranding, etc.

• ICC (C) covers only limited numbers of perils, i.e., fire, stranding, collision etc.

Change of Voyage Clause: Under this clause, deviation from the planned route of the voyage is permitted within specified limits without invalidation of the insurance coverage. It is pretty helpful in unavoidable circumstances like changing the voyage route due to bad weather.

Process Clause: The process clause states that damage or destruction directly caused by any risk of the trade, manufacturing process, treatment, usage, or demonstration is expressly excluded.

“At and From” Clause: This marine insurance clause specifies the geographical scope of insurance coverage. It defines the point where the insurance commences (when cargo is loaded on the ship) and the point at which it terminates (when cargo is unloaded at the final destination).

Warehouse to Warehouse Clause: This marine insurance clause provides cargo coverage from the original warehouse to the destination warehouse, thus providing additional protection to the cargo during the pre-and post-shipment process.

Sue and Labour Clause: This clause is included in marine insurance to encourage the insured to take all precautionary actions to minimise the loss and further damage to the insured. The insured will be reimbursed for reasonable expenses incurred in these steps.

Read About: Difference Between Institute Cargo Clauses A, B and C

The concealed damage clause is an understated clause of marine insurance. It is included to deal with situations where damage to insured cargo is discovered once it reaches its destination and is unpacked.

The concealed damage clause states that it is agreed that any loss or damage discovered when unpacking the insured cases, packages, or bales shall be deemed to have occurred during transit and shall be paid for accordingly by the insurer unless conclusively proved otherwise.

However, certain conditions of this clause need to be fulfilled by the insured in order for this agreement to be viable. The condition is that the agreement will only apply if the damage or loss is discovered within 30 days of the arrival of the insured goods at the consignee’s or other final destination.

Thus, it is essential that the insured checks the goods immediately after receiving them for any damages and informs the insurer of the same so that an immediate investigation can be done.

Know About: What is the Endorsement Clause in Marine Insurance?

The concealed damage clause in marine insurance is one of the essential clauses that protects the insured's interests from any losses that might have occurred during the transit of goods. It shows how crucial it is for the maritime industry to have an adequate marine cargo insurance policy that protects their cargo from harsh climatic and sea conditions that might damage their goods.

You can choose to buy from reputable insurance providers like Tata AIG, which provides marine insurance that caters to various needs of policy buyers by providing customised insurance coverage, protection against liabilities and gives you peace of mind.

What is the time-frame to get compensated under the concealed damage clause in marine insurance?

Most companies offer a time frame of 30 to 90 days from the arrival to find and report any damage to cargo and get compensated under the concealed damage clause.

What is a jettison clause in marine insurance?

The jettison clause in marine insurance refers to throwing cargo or equipment overboard to reduce the ship's or vessel’s load and save it from sinking.