The coverage type which an insured person can obtain from a Cargo Insurance may range from the minimum coverage that is provided by the basic policy that is commonly termed as the Ships and Good Policy to the maximum protection of all the risks whatsoever. S.G Policy or Ships and Goods Policy cover the loss and the damage that goods may experience whether total or partial arising from the sea perils. Because the goods are exposed in the transit to extraneous perils like leakage, shortages pilferage and theft, the scope that will be provided under policy of SG needs to be enlarged by introducing many Institute Cargo Clauses or ICC like the free from particular average or FPA, All risks or AR and With Average or WA. There are also certain cargo types that require special clauses which is commonly referred to as the trade clauses like the raw sugar clause, timber trade federation clause or the rubber clause.
It is important to point out that because of the difficulties that are encountered by commerce and trade when interpreting the archaic workings of SG policy, Lloyd’s underwriters association with its consultation with Institute of London underwriters has replaced the policy of the SG with simpler document and with corresponding new institute cargo clauses set.
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