Extended Operational and Trade Vocabulary

Marine Insurance, P&I and Claims glossary (page 2)

The London-market and P&I vocabulary of marine insurance and claims: abandonment and constructive total loss, the slip and acceptance, accommodation lines, average adjusting through the AAA, the Marine Insurance Act 1906 and the Institute Clauses, and the claims process from notice through subrogation. Grounds each term in the underwriting practice and the casualty allocation it governs.

385 defined terms.

Showing 135 on this page (page 2 of 2).

N

Notice of Abandonment (NOA): formal notice by the assured to underwriters claiming a constructive total loss.
Notice of Claim: notice given to insurer of an event likely to give rise to a claim.

O

Off-Hire: Period under a time charter during which hire ceases due to specified events.
Off-hire survey: Joint survey at redelivery.
Oil Pollution Act 1990 (OPA 90): US federal statute imposing strict liability for oil pollution in US waters.
Open Cover: contract under which underwriters agree to accept all cargo shipments meeting agreed criteria during a stated period.
Open Market Slip: placing slip used in the London market for non-binder business.
Operator's Extra Expense (OEE): energy-related cover for blowout control.
Ordinary Leakage and Loss in Weight Exclusion: ICC clause 4.2 exclusion.
Outstanding Claims Reserve: see Loss Reserve.
Owner's Workers' Compensation: cover for liability to harbor workers under the US Longshore and Harbor Workers' Compensation Act.

P

P&I Club: Mutual insurance association covering protection-and-indemnity risks.
P&I Cover: third-party liability and indemnity insurance for shipowners and charterers, mutually provided by clubs.
Package Limitation: limit per package or unit under Hague-Visby Rules article IV rule 5.
Particular Average (PA): partial loss caused by an insured peril fortuitously suffered by a particular interest.
Particular Charges: expenses incurred by or for the assured for the safety or preservation of the subject matter, other than GA or salvage.
Particulars of Loss: detailed account of how a loss occurred, required for the formal claim.
Passenger Liability: P&I cover for liabilities to passengers, with blue cards under Athens 2002.
Pay-to-be-Paid Rule: P&I principle requiring the member to have paid the third party before the club indemnifies, upheld in The Fanti and The Padre Island.
Perils of the Seas: fortuitous accidents or casualties of the seas, an insured peril; ordinary action of the wind and waves excluded.
Personal Injury Cover: P&I head of cover for injury or death of crew, passengers, and others.
PHMSA: US Pipeline and Hazardous Materials Safety Administration, relevant to hazardous cargo certification.
Piracy: Defined in UNCLOS Article 101.
Placement: the act of broking a risk to underwriters.
Placing Broker: broker who arranges the original placement of the risk.
Plating Clause: hull clause regarding renewal of plating wastage.
Pollution Hazard Clause: ITC Hulls 1/10/83 clause 7 covering damage to the vessel resulting from authority action to avert pollution.
Pool: International Group of P&I Clubs Pooling Agreement, sharing claims between USD 10 million and USD 100 million among member clubs.
Pooling agreement: Arrangement to pool earnings of similar tonnage.
Port Risk Insurance: hull cover for vessels remaining in port and not at sea.
Premium: consideration paid by the assured for the insurance.
Premium Accounting: settlement of premiums between broker and underwriter, governed in London by IMR or Velonetic systems.
Premium Fraud: dishonest manipulation of premium accounting, including double-broking.
Premium Warranty: warranty requiring premium to be paid by a stated date.
Pro Rata Cancellation: cancellation with return of unearned premium proportional to unexpired period.
Promissory Warranty: warranty by which the assured undertakes that some particular thing shall or shall not be done, governed by section 33 of the Marine Insurance Act 1906 and reformed by the Insurance Act 2015.
Proof of Loss: documents establishing the loss claimed.
Proportional Reinsurance: reinsurance in which premium and losses are shared in fixed proportion, including quota share and surplus share.
Protection and Indemnity Insurance: see P&I.
Protest: master's sworn statement of facts following a casualty, used in claims documentation.
Provisional Premium: see Deposit Premium.

Q

Quota Share Treaty: proportional reinsurance ceding a fixed percentage of every risk in the class.

R

Rate of Exchange Clause: clause fixing exchange rates for claims paid in other currencies.
Reasonable Despatch: assured's duty under ICC clause 18 to act with reasonable despatch in circumstances within their control.
Recovery: amount obtained from third parties reducing the insurer's net loss; see Subrogation.
Reinstatement Premium: premium payable to reinstate a reinsurance layer after a loss.
Reinsurance: insurance of insurance, by which insurers transfer part of accepted risk.
Removal of Wreck Cover: P&I head of cover for compulsory wreck removal liabilities.
Repatriation Cover: P&I cover for crew repatriation expenses under MLC 2006 and national law.
Replacement Clause: see Institute Replacement Clause 1/12/34.
Reservation of Rights: insurer's notice that it investigates a claim without admitting cover.
Retention: amount of risk retained net for own account before reinsurance responds.
Retrocession: reinsurance of reinsurance.
Returns for Lay-up: premium return under ITC Hulls 1/10/83 clause 22 for periods in approved lay-up.
Risk Inception: time and date risk attaches.
Risk Surveyor: surveyor appointed by underwriters before binding to assess condition.
Rule B Attachment: pre-judgment maritime attachment in US courts.
Rules of the Club: rulebook governing P&I cover, contractual basis of cover between member and club.
Running Down Clause (RDC): traditional name for the collision liability clause in hull cover.

S

Salvage: Recovery of a vessel or cargo from peril at sea.
Salvage Arbitration Branch: Lloyd's body administering LOF arbitrations.
Salvage Association: maritime survey organization providing casualty surveys, now part of Braemar.
Salvage Award: Reward fixed under Salvage Convention 1989 criteria or LOF arbitration.
Salvage Charges: charges recoverable under maritime law by the salvor, recoverable from underwriters under section 65 of the Marine Insurance Act 1906.
Salvage Fraud: dishonest inflation of salvage claims, an offence and breach of cover.
Salvors' Liability Insurance: liability cover for professional salvors.
SCOPIC: Special Compensation P&I Club Clause, optional supplement to LOF providing P&I-funded tariff remuneration where Article 14 might otherwise apply.
SDR: Special Drawing Rights of the International Monetary Fund, the unit of limitation in HVR, LLMC, CLC and other conventions.
Sea Carrier: carrier by sea, whose liability may be insured under marine liability covers.
Seaworthiness: Carrier's duty to make the ship seaworthy under Article III Rule 1 of Hague-Visby.
Section 39(5) Marine Insurance Act 1906: time policy provision that the assured is not liable for unseaworthiness unless privy to it.
Section 55 Marine Insurance Act 1906: provision on losses proximately caused by perils insured against.
Security: financial guarantee provided to release a ship from arrest, commonly an LOU or bank guarantee.
Settlement: payment in discharge of the claim.
Severability of Interests: liability policy term treating each insured as separately insured.
Shipbuilder's Risk Cover: see Builders' Risks.
Shipowner Limitation Fund: fund constituted in court under LLMC 1976 to limit aggregate liability.
Shipowners' Mutual Protection and Indemnity Association: the Shipowners' Club, International Group member specializing in small and specialist tonnage.
Sight Draft Premium: premium payable on production of the slip and accounts.
Signing: process of recording underwriters' shares on the slip and policy.
Signing Down: scaling down written lines where the slip is oversubscribed.
Single Voyage Policy: cargo or hull policy covering one voyage.
Slip: Allow to run; berth for a small craft.
Slip Policy: policy issued in standard slip-policy form under the Market Reform Contract.
Special Compensation: compensation under Article 14 of the Salvage Convention 1989 for salvors preventing environmental damage.
Standard Towage Conditions: BIMCO TOWHIRE and TOWCON forms used in marine towage contracts, relevant to liability allocation.
Statement of Claim: pleading served in maritime proceedings.
Statement of General Average: document prepared by the average adjuster setting out the adjustment.
Steamship Mutual Underwriting Association Limited: International Group P&I club founded 1909.
Strikes Clauses: see Institute Strikes Clauses.
Sub-Brokerage: brokerage commission paid to a producing broker.
Subrogation: Insurer's right to step into the insured's claim against third parties.
Sue and Labour Clause: clause requiring the assured to take reasonable measures to avert or minimize loss, with expenses recoverable; ITC Hulls 1/10/83 clause 11.
Sum Insured: stated amount of cover.
Supplementary Call: additional contribution levied by a P&I club on members if standard calls are insufficient.
Surplus Share Treaty: proportional treaty ceding amounts above the cedant's retention up to a stated number of lines.
Surveyor: independent expert appointed to investigate cause and extent of loss.

T

Tank Cleaning Cover: P&I extension responding to tank cleaning costs after carriage of damaging cargo.
Tanker Owners' Voluntary Agreement Concerning Liability for Oil Pollution (TOVALOP): superseded voluntary regime, historical.
Termination of Adventure Clause: ICC clause 9 dealing with cessation of cover where carriage terminates other than at intended destination.
Three-Fourths Collision Liability: ITC Hulls 1/10/83 clause 8 covering 75% of collision liability, with the remaining quarter falling to P&I.
Through Transit Insurance: warehouse-to-warehouse cargo cover.
Time Bar: Limitation period (one year under Hague-Visby Article III Rule 6).
Time Policy: policy insuring for a defined period of time, as defined in section 25 of the Marine Insurance Act 1906.
Total Loss Only (TLO): cover responding only to actual or constructive total loss.
Towage Liability: P&I cover for liability arising under customary or contractual towage.
Tradesman's Charges: invoiced repair costs, examined by hull surveyors.
Trading Warranty: navigation warranty restricting the vessel's trading limits and forming the basis of breach trading warranty additional premium.
Transit Clause: ICC clause 8 defining duration of cover from leaving warehouse at origin until delivery at destination, subject to time and event limits.
Treaty Reinsurance: reinsurance covering classes of business under a single contract.
Tug and Tow Liability: liability of tug owners under tow contracts.

U

Uberrimae Fidei: utmost good faith, the historic basis of section 17 of the Marine Insurance Act 1906; modified by the Insurance Act 2015 for non-consumer business.
UK P&I Club: United Kingdom Mutual Steam Ship Assurance Association, founded 1869, International Group member.
Underwriter: person or entity accepting risk in exchange for premium.
Underwriting Profit: profit on insurance operations excluding investment income.
Unearned Premium Reserve: reserve for the unexpired portion of in-force policies.
Unrepaired Damage: damage not repaired before sale or end of policy, recoverable in part under ITC Hulls 1/10/83 clause 18.

V

Valued Policy: policy specifying the agreed value of the subject matter insured, per section 27 of the Marine Insurance Act 1906.
Vessel's Proportion of General Average: ship's share of GA in the adjustment.
Voyage Policy: policy from one place to another, as defined in section 25 of the Marine Insurance Act 1906.

W

WAR Risk Insurance: Cover for war and strikes perils excluded from hull policy.
War Risks Mutuals: associations such as the Hellenic War Risks and Norwegian war risk pools, providing P&I-style war cover.
Warehouse-to-Warehouse Clause: predecessor to the Transit Clause, providing continuous cover from origin to destination warehouse.
Warranty: see Promissory Warranty; reformed by sections 9 to 11 of the Insurance Act 2015.
Warranty of Legality: implied warranty under section 41 of the Marine Insurance Act 1906 that the adventure is lawful.
Warranty of Neutrality: implied warranty under section 36 of the Marine Insurance Act 1906 that insured neutral property shall have neutral character at the commencement of the risk.
Warranty of seaworthiness: Express or implied undertaking by owner.
West of England P&I: International Group P&I club founded 1870.
Without Prejudice: Privilege over settlement communications.
Wreck Removal Cover: P&I head of cover for liabilities for removal, marking or lighting of wrecks.
Written Line: percentage share written by an underwriter on the slip before signing down.

X

XCU Cover: explosion, collapse and underground damage cover, occasionally relevant in marine construction.
XOL: see Excess of Loss.

Y

York-Antwerp Rules: CMI-drafted rules for adjustment of general average; current editions 1994, 2004, 2016.

Z

Zone Limits: trading limits set out in hull trading warranties, often defined by reference to International Navigating Conditions.