Complete Glossary of
Marine Terms & Abbreviations
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IATA
International Civil Air Transport Association
ICC
Institute Cargo Clauses. There are three basic sets of these clauses (A, B and C). The (A) clauses cover all risks, subject to specified exclusions. The (B) and (C) clauses cover specified risks, subject to specified exclusions.
ICD - Inland Clearance Depot
A container facility with customs clearance facilities.
ILU
Institute of London Underwriters
IMDG Code - International Maritime Dangerous Goods Code
The IMO recommendations for the carriage of dangerous goods by sea.
IMO - International Maritime Organisation
The UN Body charged with the duty of making safety and anti-pollution conventions and recommendations concerning sea transport.
IMPLIED WARRANTY
A warranty that is not expressed in the policy specifically but which is understood by both parties to be incorporated in the contract. An implied warranty must be strictly complied with and in the event of a breach of the warranty the insurer is discharged from liability as from the date of the breach, but the insurer may waive the breach or the breach may be excused by Statute.
The insurer is still liable for claims in respect of losses, by insured perils, occurring before the breach. The two main implied warranties are seaworthiness of the vessel and legality of the adventure.
IN PERSONAM
Legal action against a person.
IN REM
Legal action against an object or the owner thereof (eg action naming the ship).
Inchmaree Clause
(So-called for a famous legal decision involving a vessel of that name) Covers losses resulting from a latent defect in the vessel’s hull or machinery and losses resulting from errors in navigation or management of the vessel by the master or crew.
INCOterms
A set of ICC (International Chamber of Commerce) terms offered for optional use in trading contracts and intended to reduce misunderstandings in the meaning of international trading terms.
Increased Value (Cargo)
A clause in a cargo policy which provides that, where both an underlying policy and an increased value policy cover the same goods for the same transit, the insured values expressed in both policies shall be aggregated; so that the sum insured by each policy shall be deemed to he part of the whole. The intention is that, where both policies settle a claim, any recoveries in respect of that claim are shared between the underwriters subscribing both policies.
Increased Value - Hull
An insurance effected on a hull interest (e.g. "disbursements") to provide additional indemnity to that provided by the insured's hull & machinery marine policy in event of a total loss of the insured ship.
The H & M policy incorporates a warranty which restricts the amount that can be insured in an increased value policy.
INDEMNITY
The making good of a loss to the insured by financial payment. It does not include any profit to the insured in its pure sense but may, in practice, embrace some profit by agreement as in the case of cargo "Valued Policies".
Indent
An order for the supply of goods.
Indirect Damage
Damage caused by an insured peril but not proximately caused thereby.
Inevitable Loss
A loss which will happen and which is not dependent on a fortuity. This is not an insured peril, nor can it be a general average loss.
INFESTATION
Infested with vermin. Unless the policy specifically includes this risk it is excluded from the policy by the Marine Insurance Act
Inherent Vice
A quality existent in a cargo which produces damaged to the cargo without the assistance of an outside agent and by its own action. The perishable nature of fruit and spontaneous combustion is inherent vice. It is always excluded by the insurers of the cargo because of its inevitable nature.
INMARSAT
International maritime satellite system
Institute Cargo Clauses
Standard insurance conditions, published by the Institute of London Underwriters, for policies covering goods in transit overseas.
Institute Clause
A standard clause published by the Institute of London Underwriters.
Institute Of London Underwriters
An association of Company Underwriters representing the Companies which are members of the Institute. The Institute is controlled by a Committee elected from its members. The purpose of the Institute is to further the interests of insurance by co-ordinating facilities regarding wordings, clauses and conditions and to find grounds for common agreement on problems affecting the insurance market. Principally the Institute concentrates on marine business.
Committees are formed which include Lloyd’s Underwriters as well as members of the Institute to decide on matters affecting the whole market and to make recommendations to the market based on their findings. The Institute provides facilities for these Committees to meet. The Technical and Clauses Committee and The Joint Hull Committee are two such Committees. the "Returns Bureau" (The Joint Hull Returns Bureau) operates under the auspices of the Joint Hull Committee for the benefit of the whole market and authorises "lay up" returns for both Lloyd’s and Company Underwriters. In addition to its services to insurance, the Institute administers a Policy Signing Office (now joined with Lloyds) and a "Claims Payable Abroad" service on behalf of its member Companies.
Institute Time Clauses
Standard insurance conditions, published by the Institute of London Underwriters, for policies covering ships for a period of time.
Institute Warranties
A phrase, if used in the London market, denotes a set of express warranties, published by the Institute of London Underwriters, for use in hull & machinery policies. The set comprises five locality warranties and one trade warranty; the latter relating to the carriage of Indian coal as cargo. In event of breach of any of the warranties, the insured is held covered by the breach of warranty clause in the Institute hull clauses.
Insurable Interest
The interest one has in relation to property exposed to peril whereby one may lose financially by the loss of, or damage to, such property or may incur a liability in respect thereof. A person who effects a marine insurance contract without an insurable interest or a reasonable expectation of acquiring such interest is guilty of an offence under law.
By most countries' marine insurance laws, no person is allowed to insure unless he has an insurable interest in the adventure, that is, he must stand to lose something if the property at risk is lost, damaged or detained or he may incur liability in respect of the property or suffer because it fails to arrive on time.
With marine cargo claims, it is important to establish who had the insurable interest at the time of loss.
INSURABLE VALUE
In practice the insured value is agreed and is conclusive. If the policy is unvalued it is necessary to know how to calculate the insurable value; that is, the maximum amount which may be insured where a policy has no agreed value.
Basically, the insurable value of a ship is the actual value of the ship at commencement of the risk including machinery, fittings etc., fuel stores, outfit, wages, disbursements and insurance premiums.
On cargo the insurable value is the cost of the cargo plus freight and insurance charges.
On freight or any other interest the insurable value is the amount at risk of the insured, plus insurance charges.
In practice all hull and cargo policies are valued so that the above is seldom needed.
Insured Value
Usually calculated by adding the invoice cost of the goods, guaranteed freight, other costs, and the insurance premium plus a percentage, commonly 10%. This usually represents the landed value.
INTEGRAL
Refrigerated container with own machinery
INTEREST ON RECOVERIES
When a claim is paid to the insured the insurer is subrogated to the rights of the insured in respect of the property. He may recover from third parties, responsible for the damage, amounts by way of damages up to the amount of claim paid to the insured.
If the period of time which elapses between the payment of the claim and the recovery to the insurer is considerable it may be agreed that interest is payable and may be added to the amount of the recovery. It may be provided in the policy that interest is shared between the underwriter and the insured when there is a period of delay between the time the accident occurred and the time the claim is paid to the insured.
Interstate Commerce Commission (U.S.)
The U.S. governmental body to regulate interstate trade.
Invoice
A document issued by the seller to the buyer, which gives detail of merchan¬dise sold, number of units being shipped, per unit cost and the terms of sale.
Inward Charges
Pilotage and other expenses incurred on entering port.
Irons
A sailing vessel is in irons when stationery, head into the wind, and unable to pay off on to either tack
Irrespective of Percentage
This term was often seen in cargo insurance contracts when the SG policy was in use. Its effect was to make claims payable without reference to the FPA warranty or the franchise expressed in the memorandum in the policy form.
With the abrogation of the SG policy for cargo insurances, the term has fallen into disuse in many marine insurance markets.
ISM - INTERNATIONAL SAFETY MANAGEMENT
The ISM Code was developed by the International Maritime Organization in the early 1990s and was adopted as a Code in May 1994 as Chapter IX to the 1974 International Convention for the Safety of Life at Sea, otherwise known as the "SOLAS Convention".
On 1 July 1998 when Chapter IX of the SOLAS Convention came into operation, compliance with the ISM Code became mandatory.
Under Regulation 2 of the SOLAS Convention, the ISM Code will apply to all ships irrespective of when those ships were constructed, with the scope and date of application being dependent on the type of ship.
ISO - International Standards Organisation
International Organisation of National Standard Bodies responsible, inter alia, for setting standards for container construction.
Isophase
A navigation light which flashes with equal periods of light and darkness
I.A.R.
Industrial all risks
I.B.C.
Institute Builders Risk Clause (marine)
I.B.N.R.
(losses) incurred but not reported
I.B.N.R.P.R.
Incurred but not properly reported
I.C.A.O.
International Civil Aviation Organisation
I.C.C.
Institute Cargo Clauses. International Chamber of Commerce
I.F.C.
Institute Freight Clause
I.H.P.
Indicated horse power
I.M.C.O.
Inter-Government Maritime Consultative Organisation
I.M.I.U.
International Marine Insurance Union
i.o.p.
Irrespective of percentage
I.P.R.C.
Institute Port Risk Clause
I.V. or I/V
Increased value. Insured value. Invoice value
I.Y.C.
Institute Yacht Clause