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What is cutting clause in marine insurance?

Author

Jessica Hardy

Updated on February 17, 2026

What is cutting clause in marine insurance?

In the event of damage or breakage caused by an insured peril it is agreed that the damaged, broken length or portion shall be cut off, the remaining length or portion be considered as sound and the Company shall be liable only for the insured value of the length or portion which has been lost by being broken off or

Subsequently, one may also ask, what are the important clauses in marine insurance?

Warehouse to Warehouse Clause- The marine insurance policy mentions the warehouses that the goods are taken and delivered to. This means the company will take charge if any uncertainties occur while goods are being bought from hinterland to port and also during the voyage.

Secondly, what is PBL in marine insurance? The open cover is a category of marine insurance policy in which the insurance provider will provide coverage for all the cargoes shipped during a specific policy period. The premium for this open cover marine insurance is maintained by the cash deposit account maintained by the insured person.

Considering this, what are the various clauses of marine insurance policy?

Valuation Clause= Here the value of the subject is the value as decided between both the parties. In case of any loss or damage, the compensation amount would not exceed the amount as stated in the marine insurance policy.

What is excess clause in marine insurance?

An excess is the amount payable by the insured and is usually expressed as the first amount falling due, up to a ceiling, in the event of a loss. An excess may or may not be applied. It may be expressed in either monetary or percentage terms.

What are the different types of marine losses?

2 Types of Marine Losses: Total Loss and Partial Loss
  • Actual Total Loss:
  • Constructive Total Loss:
  • Particular Average Loss:
  • General Average Loss:

What is the valuation clause in marine insurance policy?

The clause in a marine cargo insurance policy that contains the agreed basis for determining the value of covered goods. This sets the amount due under any claim for lows or general average contribution.

What is both to blame collision clause?

A both-to-blame collision clause is an insurance policy clause that says both vessel owners must share in the responsibility of a collision between ships if the crash was due to negligence. Marine insurance coverage includes such actions as ship sinking or collisions but does not cover wear and tear or war.

What are the basic insurance principles?

In the insurance world there are six basic principles that must be met, ie insurable interest, Utmost good faith, proximate cause, indemnity, subrogation and contribution. The right to insure arising out of a financial relationship, between the insured to the insured and legally recognized.

What are marine perils?

“Marine Perils means the perils consequent on”, or incidental to the navigation of the sea, that is to say, perils of the seas, fire, war perils (enemies), pirates, rovers, thieves, captures, seizures, restraints and detainment of princes and peoples, jettisons, barratry and other perils, either of the like kind or

What is Inchmaree clause?

An Inchmaree clause is found in maritime insurance policies and provides coverage for the ship's hull from loss or damage caused by machinery. The Inchmaree clause, also called the negligence clause, covers damage that is caused by the negligence of ship personnel, such as engineers and captains, when navigating.

What are the various clauses?

Clauses come in four types: main (or independent), subordinate (or dependent), adjective (or relative), and noun. Every clause has at least one subject and one verb. Other characteristics will help you distinguish one type of clause from another.

What is a sue and labor clause?

A sue and labor clause imposes a duty on the insured to take reasonable steps to protect insured property in the event of actual or, in some cases, imminent, covered damage. In turn, the insurer will provide reimbursement for the insured's expenses under appropriate circumstances.

What are the different types of fire insurance policy?

A single policy covers multiple risks, thus, comprehensive insurance is highly recommended. Consequential Loss Policy: Due to a fire incident, factory works will be at a halt. Production will go down despite the fixed expenses continue at the same rate. With a consequential loss policy, all these losses can be covered.

What is the duration of marine insurance?

Generally, the period of open marine insurance will not exceed one year. 8) Deliberate Act: If goods are damaged or loss occurs during transit because of deliberate act of an owner then that damage or loss will not be covered under the policy.

Is rain water damage covered by marine insurance?

Below given risk can be covered under I.C.C. 'b' on payment of additional premium: Theft, pilferage and/ or non-delivery. Fresh water and rainwater damage.

What is marine declaration?

All transits upto the sum insured are covered without any exception and total value of goods in transit are required to be declared atleast once in a quarter in the form of a certified statement. Period of insurance for this policy is one year.

What is a valued insurance policy?

Valued policy law (VPL) is a legal statute that requires insurance companies to pay the full value of a policy to the insured in the event of a total loss. Valued policy law does not consider the actual cash value of the insured property at the time of the loss; instead, the law mandates total payment.

What is frequency and severity in insurance?

Frequency refers to the number of claims an insurer anticipates will occur over a given period of time. Severity refers to the costs of a claim—a high-severity claim is more expensive than an average claim, and a low-severity claim is less expensive.

What is the difference between marine open cover and open policy?

(a) The open policy is a stamped document and is, therefore, legally enforceable in itself, whereas an open cover is unstamped and has no legal validity unless backed by a stamped policy/certificate of insurance.

Why cargo insurance is needed?

Cargo Insurance provides coverage against all risks of physical loss or damage to freight during the shipment from any external cause during shipping, whether by land, sea or air. Businesses need cargo insurance to reduce the risk of importing and exporting.

What are the two types of marine insurance?

The three most common types of marine insurance are hull, cargo, and protection and indemnity (P&I). There is no such thing as a standard marine insurance policy and not all marine insurance companies insure against the same risks in the same type of policy.

What is not covered in marine insurance?

Marine Insurance doesn't offer any coverage in the following cases: Loss or damage due to wilful act of negligence and misconduct. Loss or damage due to wire, strike, riot, and civil commotion. Loss or damage arising from the use of nuclear fission, weapon, or any other radioactive force.

What does a marine cargo policy cover?

Marine cargo insurance covers losses arising from physical damage to goods whilst being transported around the world, whether by road, rail, sea or air. They could be stolen en route or destroyed in a collision at sea; either way resulting in a financial burden for the owner if not insured.

What are the 5 principles of marine insurance?

Know the Principles of Marine Insurance
  • Principle of Utmost Good Faith.
  • Principle of Insurable Interest.
  • Principle of Indemnity.
  • Principle of Cause Proxima.
  • Principle of Loss Minimization.

What is the difference between marine and cargo insurance?

While marine insurance protects the insured only in transportation of goods via sea, cargo insurance covers land and air as well. Marine Insurance helps to provide for losses caused due to damages to goods because of the perils of the sea such as collision, storm, etc.

What is an excess clause?

An excess clause is an insurance-policy provision. This provision limits the insurer's liability to the amount exceeding other available coverage. Therefore, this clause essentially requires other insurers to pay first.

What is a general average clause?

In insurance: General average clause. The general average clause in ocean marine insurance obligates the insurers of various interests to share the cost of losses incurred voluntarily to save the voyage from complete destruction.

What is concealed damage clause?

Concealed Damage Clause

Any container and/or case and/or package showing signs of damage shall be opened immediately on arrival at final destination. The period under this extension is limited to 30 days after arrival at final destination.

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What is cutting clause in marine insurance?