AIMU Revises Cargo Clauses; First Change Since 1966
By Michael Ha
NU Online News Service, May 24, 4:02 p.m. EDT?The American Institute of Marine Underwriters said it has revised the association's cargo clauses for the first time since 1966, to help update its forms and make them more consistent with modern usage.[@@]
An ocean marine cargo policy is a contract between the insured and the insurer which provides automatic protection on all shipments coming within the contract coverage. Cargo clauses are the insuring agreements in a cargo policy.
The AIMU, whose service for its members includes the development of marine underwriting clauses, said it has created four forms to provide the needed protection for the insured. They are: All Risks; Free of Particular Average?American Conditions; Free of Particular Average?English Conditions; and With Average.
"What's been happening in the marketplace is that a lot of companies have been coming out with their own revisions for cargo clauses?I am talking about major brokers and insurance companies. Some of them were taking the basic AIMU cargo clauses from 1966, and sometimes even from 1949, and adding various clauses and forms to them," explained James Craig, president of AIMU.
According to the New York-based industry association, its members represent 90 percent of the ocean marine business written in the United States.
Mr. Craig said it's been getting to the point "where it was just getting everyone involved very confused" as to what was and wasn't covered.
"So the cargo committee decided with the approval of the board to come forward with what we would like to think of as revised, modernized forms," he said.
Reacting to the ongoing proliferation of individual company forms, AIMU said it is hoping these new clauses can now establish "a standard form of reference" when checking different types of basic cargo coverage.
"The clauses may prove helpful in defining terms in regards to coverage based on the consensus of leading underwriters in the industry," added David French, chairman of the American Institute of Marine Underwriters.
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