FOSFA Circular - March 13

All Members
CIRCULAR
28 March 2013
INSURANCE CLAUSES
The Joint Cargo Committee (JCC) under the umbrella of the Lloyd’s Market Association
(LMA) has reviewed and updated the 1982 Institute Cargo Clauses. Since the publication of
their new clauses in 2009, a series of LMA working groups have been comparing the existing
“ancillary” and commodity clauses in relation to the revised wording. The FOSFA Clauses
were included in this review, and a proposal to update the Institute FOSFA Trade Clauses
was put forward to FOSFA for consideration.
With the support of the Section Committees, and endorsement by Council, the revised
(updated) Institute FOSFA Trade Clauses have been under a process of public consultation
by the LMA which ended late December. Having received no substantive comments, the new
Clauses are near now to be released by LMA and published by FOSFA, anticipated effective
on and from 1 May 2013.
Regarding the changes applied to the clauses, there has been a basic updating of the
language used. For example, the terms “goods” and “cargo” have been replaced by “subject
matter insured”; the term “underwriters” has been replaced by “insurers”; and the term
“servants” by “employees” (however, the latter has been retained in Supplementary Clause 3
as the term servants in this clause derives from and remains relevant to Article IV.2(a) of the
Hague-Visby Rules).
There have been some changes in the Exclusion Clauses, in particular:

Packaging and Preparation: The exclusion is now limited to where the packaging or
preparation is carried out by the Assured or their employees (not including
independent contractors); or the packaging or preparation is carried out prior to the
attachment of the risk.

Nuclear Accidents: The scope of this clause has been widening so as to cover, for
example, new possible kinds of terrorist attacks.

Unseaworthiness: The scope of the clause was narrowed providing benefits to the
Assured.

Terrorism: This exclusion has been extended to reflect the wide range of threats that
may now be encountered, and the range of motives that may be behind an attack.
Other clauses have also been amended, such as:

Transit Clause: It now covers from the time the subject matter insured is first moved
in the warehouse for the purpose of the immediate loading; and terminates on
completion of unloading.

Change of Voyage: This clause now ensures that an innocent Assured does not lose
coverage because of the effect of Section 44 of the Marine Insurance Act regarding a
change of voyage.
FEDERATION OF OILS, SEEDS AND FATS ASSOCIATIONS LIMITED 20 St Dunstan’s Hill London EC3R 8NQ United Kingdom
Tel: +44(0)20 7283 5511 Fax: +44 (0)20 7623 1310 E-mail: contact@fosfa.org www.fosfa.org
These changes apply to FOSFA Trade Clauses (A). The “B”, “C” and the War, the Strikes
and the Supplementary Clauses have been amended in line with the FOSFA Trade Clauses
(A).
Finally, the Termination of Transit Clause (Terrorism) JC 056 wording has been updated as
part of the 2009 JCC review process and therefore the FOSFA Insurance Exclusion Clause
List is being amended accordingly.
Subscribers to the Contract Manual Amendment Service will automatically receive copies of
the new Insurance Clauses and, as usual, the website will be updated as soon as LMA
agreement is reached.
Members wishing to order copies of these clauses may do so via e-mail at contact@fosfa.org
or by completing the Order Form available on the website.
R B Garay
Trade Policy Manager