ICC-C perils more relevant than fancy covers

Even as marine cargo insurers and brokers keep adding newer clauses to policies, some relevant and some cosmetic, the fire accident on the ULCS Maersk Honam is a grim reminder that the maritime perils covered under Institute Cargo Clauses –C are the most relevant even today. Originally vessels were majorly made of wood and hence prone to fires, but are the modern vessels made of steel also fire-prone? Most certainly yes. The construction of the vessels and the fact that large vessels can carry up to 18000 TEUs makes fire-fighting all the more difficult. The temperatures inside containers can rise to very high levels causing them to melt as well. Problem gets compounded when shippers declare cargo wrongly or try to pass off goods falling under IMDG code without declaring them to be so.

The wise men who drafted the ICC, duly included Fire and Explosion under the basic C coverage. Another cover available under ICC – C is for General Average sacrifice & expenditure. The incidences of General Average are on the rise too, reasons known to all – the value of cargo on board a vessel, often exceeds the value of the vessel.

Brokers and insurers should focus more on risk management as regards cargo and hull and educate clients suitably. Another area which needs tightening up is strict compliance with regulations as regards transportation of cargo everywhere in the world. Until this is done, the cosmetic clauses provided by insurers and brokers would never address the deep-rooted fundamental issues associated with sea voyages.