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Glossary of Protection and Indemnity Terms

 

A B C D E F G H I J K L M N O P Q R S T U V W

A

Abandonment

Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss

Actual Total Loss

This occurs when:

the insured property is completely destroyed

the assured is irretrievably deprived of the insured property

cargo changes in character so that it is no longer the thing that was insured e.g. cement, water damaged becomes concrete

a ship is posted "missing" at Lloyd's.

Adventure

The exposure of property to risk

AFT

Toward, at, or near the stern

Assignment

The passing of beneficial rights from one party to another

Assured

Party indemnified against loss by means of insurance

Arbitration

Methods of settling disputes which is usually binding on the parties concerned.

Air Pipe

Fitted to water ballast and oil tanks and led to the upper deck to allow the escape of air when the tanks are being filled

Amidships

The portion of the ship at half its length

Approved

An "approved" vessel is one which the underwriters deem adequate to carry the insured cargo, at the agreed rate of premium.

Auxiliary Boiler

Used for duties other than main propulsion but may still be very large boilers as found on tankers when cargo discharge is done using cargo pumps driven by steam turbines.

Average

A marine partial loss.

Avoidance

The right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage, to step aside from the insurance contract and to treat it as though he never accepted the risk

B

Ballast

Any solid or liquid weight placed in a ship to increase the draught, to change the trim or to regulate the stability

Ballast Tank

A watertight compartment to hold water to improve the ship's stability

Bank Guarantee

An undertaking given by a bank to pay a claim sometime in the future should the Member be found liable and the undertaking is provided by the bank for the Association.

Barge

A flat bottomed vessel for carrying cargo.

Batten

To “batten down” is to secure the hatchway tarpaulin

Beam

Fitted in the fore part of a ship to prevent vibration

Berth

Where a ship is tied up or docked, a place to sleep aboard

Bilge

Curved portion between the bottom and the side shell plating, drainage space within the ship

Bill Of Lading

A receipt for the cargo received into the care of the carrier must be issued to the shipper by the carrier.

1. Evidence of the contract of carriage

2. Title to the goods

3. Receipt for the goods

Bollard

Fitted for the purpose of securing ropes

Bona Fide

In good faith, without fraud or deceit

Bowthruster

An additional motor driven propulsion unit to provide transverse movement.

Broker

A person who transacts the business of negotiating between merchants and shipowners respecting cargoes and clearances, or one who effects insurances with underwriters

Bulbous Bow

A ship which has a bulbous profile which improves the speed and efficiency/characteristics of the vessel.

Bulkhead

A crosswise/longitudinal division of a ship

BULWARK

The plating fitted for protection at the sides of a ship on and above the weather deck

BUNKER

Ship's fuel

C

Call

The premium charged by a P & I Club

Cargo Interests

Parties having an interest in the cargo.

Carrier

Operator or charterer of a ship, usually a shipowner

Centrifugal Separators

Used on ships to treat fuels and lubricating oils. They spin at very high speeds, typically 6000 rpm and separate out water and solids.

Certificate Of Entry

A document issued by the Association which records the names of Members interested in, and is evidence of a contract of insurance in respect of, an entered ship.

Cesser

When a term comes to an end.

Charterer

Person who hires a vessel either on a voyage or for a period of time.

Charterparty

A contract between a shipowner and a party who hires his ship for an agreed period of time, or for a specific voyage or a series of voyages

Classification Society

Bodies approved by governments to ensure the practical enforcement of statute for the safety of life at sea

Cleat

A fitting having two horns around which ropes may be tied, a clip on the frames to hold the cargo battens in place

Coinsurance

Where two or more parties share the same insured risk.

Collision

Physical impact between two or more ships or vessels used for navigation.

Compressor

A means of producing air.

Constructive Total Loss

Where the assured abandons the subject matter insured to the underwriter and claims a total loss.

Contract Of Affreightment

Contract for the carriage of goods by sea in return for payment

Cool Down Survey

The process by which the refrigeration equipment is checked to be operating within its designed parameters. It is used to identify the possible existence of insulation deficiencies.

Correspondent

Representatives of the Association who are based in all major and minor ports throughout the world. Correspondents can be maritime lawyers, ship's agents or in some cases surveyors.

Coaming

The vertical plating bounding a hatchway

Cofferdam

Narrow space between two bulkheads or floors that prevents leakage between adjoining compartments

D

Davits

The supports under which the lifeboats are stowed and from which they are launched overboard

Deadweight

The difference in displacement between the light and load waterlines

Deck Log

A book where records of the vessel's navigational progress and daily events are kept.

Deductible

Sometimes called an “excess” is the amount the Member agrees to pay or is required to pay in respect of a particular claim.

Demurrage

Charge made by shipowner or wharf owner for delay in unloading or loading

Demise Charter Party

A charter party under which the shipowner provides vessel, and charterer crew and cargo.

Derrick

A wood spar or steel tube used for discharging or loading cargo

Disclosure

The duty of the assured and his broker to tell the underwriter every material circumstances before acceptance of the risk

Disbursments

Payments incurred for a variety of port expenses embracing fresh water, bunkers, customs fees etc.

Displacements

The weight of water displaced by the ship

Dolphin

A mooring buoy or a block of wood with a ring bolt at each end for vessels to ride buy

Draught

The depth of water at which the ship floats

Dunnage

Battens fitted in the hold for the protection of cargo

E

Entered Ship

A ship which has been entered for insurance in any Class of the Association.

Estimated Total Call (ETC)

The approximate level of premium which the Members will be advised how much to budget for the coming year.

F

Facultative

The right of option. The right of an underwriter to decide whether or not to accept a risk.

Fathom

A unit of measurement

Fenders

Rubbing pieces fitted on the sides of a ship as a means of protection

Forecastle

The superstructure on the upper deck at the fore end of a ship

Fore Peak

The watertight compartment at the extreme foreward end.

Freight

The hire of a ship, the carriage of cargo, cargo

G

Gangway

A ladder used for boarding a ship

General Average

An extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common adventure.

Good Faith

A basic principle of insurance. The assured and his broker must disclose and truly represent every material circumstance to the underwriter before acceptance of the risk. A breach of good faith entitles the underwriter to avoid the contract.

H

Hague Rules

Throughout the latter half of the 19th Century there was increasing dissatisfaction amongst cargo owners and their insurers with the law governing a carrier's liabilities for damage to goods in their custody. This was due to an increasing number of protection and other limitation clauses. There was a growing demand to establish a uniform code or rules for the carriage of goods by sea. After many years a conference was held at Brussels which resulted in a set of Rules known as the Hague Rules. The aim of the Rules was to establish a uniform code for the carriage of cargo shipped under Bills of Lading.

Hague Visby Rules

In 1968 the Hague Rules were revised and amended in order to bring them into line with the needs of a modern shipping industry. The amended Rules are known as the Hague Visby Rules.

Hamburg Rules

A further convention on the Carriage of Goods By Sea was held in Hamburg and the provisions agreed at this convention are known as the Hamburg Rules. The Hamburg Rules make the presumption that the carrier is responsible for any loss or damage unless it is proved that the carrier took all measures that could reasonable be required to avoid the occurrence.

Hatch Cover

Steel, wood or canvas covers for the openings to cargo compartments

Held Covered

A provisional acceptance of risk, subject to confirmation at a later date that the agreed cover is needed. Where applicable to an existing insurance, cover is conditional, in practice, on prompt advice to the underwriter as soon as the assured is aware of the circumstances to be held covered coming into effect.

Holds

Spaces below deck for stowage of cargo

Hose Test

The testing of hatch covers' weather tight integrity through the application of a jet of water (minimum 5 bar) to the hatch joints.

Hull

A ship's chassis/base frame

I

Indemnity

Security against damage or loss, exemption from penalties, compensation for damage

Inherent Vice

A defect or inherent quality of the goods or their packing which of itself may contribute to their deterioration, injury, wastage or final destruction without any negligence.

Insurable Intrest

It is illegal for anyone to insure without an insurable interest or, in the case of marine insurance, a reasonable expectation of acquiring such interest. In general one has such interest when his relationship to the property at risk may expose him to loss or liability or where he stands to gain by the safety of such property.

J

Jurisdiction

Administration of justice

K

L

Lagging

Material used for insulation

Laid Up Returns

P & I insurance premium or call which is received although a vessel is laid up during a policy year and is no longer trading.

Letter Of Protest

A declaration by the Master holding another party responsible for some loss or damage that has already occurred or is likely to occur to the ship or cargo.

Liable/Liability

Legally bound, subject to, exposed to, answerable for/being liable for,

Lien

Retention of property until outstanding debit is discharged

Line

The amount or percentage in a broker's slip or policy which establishes the extent of the underwriter's liability. The written line is written by the underwriter on the slip when he accepts the risk.

Lighter

An open non-propelled barge

Liner

A merchant ship engaged on a scheduled direct regular service

List

Inclination of ship from the upright position

Log Book

An official book containing the records of the voyage inserted by the Master of the ship

M

Main Boiler

Typically water tube boilers where the steam and water drums are interconnected with tubes which carry the water.

Manhole

A hole in the tank top to provide access

Manifest

Inventory/list of cargo shipped

Master

A person in sole charge of a ship

Mate's Receipt

An important document used in preparing Bills of Lading. It is a receipt, given and signed by the Mate, for goods actually received on board the ship. It must provide a description of the cargo, including the quantity, distinguishing marks, grade and any other relevant information.

Member

A shipowner/charterer/time charterer or a person who hire ships for a specific voyage who has entered his vessels with the Association for insurance cover.

Midships

Middle of the ship's length

Misrepresentation

A mis-statement of fact made by the assured or his broker to the undewriter, before acceptance of the risk, which misleads the undewriter in assessing the risk.

Mutual Insurance

The sharing of liabilities on a non profit basis

N

No Cure No Pay

Salvage provision whereby no award is paid to a salvor if he is unsuccessful.

O

Overspill Call

If a claim exceeds the Club's retention, the Pool's retention and excess loss reinsurance an overspill call will be required.

Owner

A person who owns a ship (shortened version of shipowner)

P

Pilotage

A charge raised on a vessel entering a river/port/estuary/canal where the services of a pilot are obligatory

Peak Tanks

The compartments at the extreme ends of the ship which are normally used as ballast tanks

Peril

A term used in the Marine Insurance Act (1906) to denote a hazard.

Pilot

A person who aids the Master in ship navigation, usually in confined waters.

Policy Year

Time period of insurance

Pooling Agreement

Means or method whereby claims are paid by various contributions from P & I Clubs collectively known as the London Group or International Group. A sharing arrangement.

Port

Left hand side of the vessel when looking forward

Premium

Monies paid to the Association in respect of the entered ship

Prima Facie

At first glance

Privity

Knowledge actual or constructive

Propeller

A revolving screw-like device that drives the ship through the water

Pump

A means of transporting liquids or gases from one area to another.

Q

R

Ratify/Ratification

To confirm or accept by signature or other formality

Recovery

Amount recovered from a third party responsible for a loss on which a claim has been paid.

Release Call

Upon the cesser of insurance in respect of an Entered Ship for any reason, or at any time thereafter the Managers may at their sole discretion demand an amount to release the Member from liability for further contributions to Calls in respect of such ship.

Reserve

When claims cannot be met out of the call income or reinsurance then there are always reserves. It is not however a policy of P & I Clubs to hold on to their Members' money unnecessarily and therefore reserves are maintained at an optimum level.

Reinsurance

The procedure whereby an insurance company or P & I Club passes on all or part of the risk to another insurance company or P & I Club.

Rider Clause

The addition of type-written clauses to the standard Charter Party. These clauses can significantly alter the owner's responsibility for cargo claims.

Ro-Ro/Roll On/Roll Off

Ships capable of shipping vehicular traffic via a ramp

Rules

Comprise of P & I cover/H & M Cover/FD & D Cover afforded to the Members subject to the terms of entry.

Running Down Clause

The collision liability clause which appears in a policy covering the hull and machinery of a ship.

Running Down Clause/RDC Cover

Sometimes all or part of the third party liability cover for damage caused to other vessels through collision is included in a special clause in the Hull and Machinery insurance. This is normally the only third party cover provided within the traditional Hull and Machinery police.

S

Salvage

Process of recovering a ship or cargo from a loss or damage due to maritime perils.

Salvor

The person claiming and receiving salvage for having saved a vessel and cargo or any part thereof from impending peril or recovered after actual loss.

Security/
Guarantee

A promise by the Association to make payment to the receiver of the guarantee should the Member be held liable for a claim.

Shell Plating

The plates forming the outer side of the hull

Shipper

A person wishing to send his goods by sea

Skylight

A framework over accommodation or engine with glass inserted to admit light and air to the space below

Sounding Pipe

A pipe led from the upper deck to the bottom of a tank which is used to ascertain the depth of water or liquid therein

Stanchion

Vertical column supporting decks or girders, also called a pillar

Supernumerary

A person carried on board but is not signed on as crew.

Starboard

The right hand side of a ship when looking forward

Steering Gear

The gear which turns the rudder and thus steers the vessel.

Stern

The aftermost end of a ship

Stevedore

Docker engaged on cargo/baggage shipment

Stow

To put away, to stow cargo in a hold

Strikes Insurance

Insurance which reimburses the shipowner for his daily operating costs when his vessel is strike-bound as a result of either shore labour or crew disputes.

Subrogation

The right of the underwriter to step into the shoes of the assured following payment of a claim to recover the payment from another party who was responsible for the loss. Limited to the amount paid on the policy.

Suit

Legal proceedings

T

Tailshaft

The aftermost length of shaft to which the propeller is attached

Tally

The process of checking, or taking account of the goods placed into a ship or unloaded from a ship.

Tanker

A steamer or motor vessel in which oils or molasses are transported in bulk

Tarpaulin

Waterproof canvas cover secured over non-watertight hatch covers.

Time Bar

Expiry of suit time

Tort

An injury or wrong independent of the contract as by assault, malicious prosecution, negligence, slander or trespass

Tovalop

A voluntary agreement but legally binding between tanker owners which provides compensation to third parties for pollution damage and clean-up costs.

Tramp

A merchant ship not confined to definite ports, but sails when cargo is available to and from any port

Transhipment

Process of transferring cargo, usually from one ship to another

Trim

The difference in draught forward and aft

Turbocharger

A performance enhancing device fitted to engines which use exhaust gases to drive gas turbines which force clean, cool air into the engine allowing increased power output from an engine.

Tween Decks

The space between two adjacent decks

U

Ullage

The vertical distance between the surface of the liquid and the top or crown of the tank.

Underwriter

Has responsibility for negotiating each Member's calls required by the Club and the terms of entry to apply to new or additional vessels as well as any other changes that a Member might require. He is also heavily involved in marketing and development.

Utmost Good Faith

Mutual trust in negotiating an insurance contract. A breach of good faith by one party entitles the other to avoid the contract.

V

Venture

Term embracing the three elements of any commercial voyage - hull, cargo and freight/passengers

W

Warranty

An undertaking by the assured whereby he promises to comply with the terms of the warranty. Non-compliance consitutes breach of warranty and the underwriter is discharged from liability as from the date of the breach.

Wash Damage

Created when a ship's speed is excessive in narrow and confined waters. Wash created erodes the banks and damages property on the banks.

Waybill

List of passengers or inventory of cargo shipped

Winches

Machinery with which a vessel can operate its mooring ropes and cargo wires which are drum driven by many means to tension/slack mooring ropes and wires.

Windlass

The machine used for raising the anchor and chain cable

Without Prejudice

Leaving the question open.

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