When the cover starts, and the four ways it ends

More claims turn on whether the cover was still in force than on whether the peril was insured. Clause 8 of the Institute Cargo Clauses answers both ends of that question, and the 60-day rule catches people every year.

Clause 8Four termination events60 days after discharge

Attachment

The cover attaches from the time the goods are first moved in the warehouse or place of storage named in the contract of insurance, for the purpose of the immediate loading into or onto the carrying vehicle or conveyance, for the commencement of transit. It then continues during the ordinary course of that transit.

The 2009 editions moved attachment earlier than the 1982 wordings did. It now covers the movement inside the warehouse and the loading itself — which matters under EXW, where the seller need not even load the collecting vehicle.

The four termination events

Whichever happens first ends the cover. Three of the four are things the insured chooses to do; the fourth is a clock.

  1. Delivery to the final warehouse

    8.1.1

    On completion of unloading from the carrying vehicle or conveyance at the final warehouse or place of storage at the destination named in the contract of insurance.

  2. Delivery to any other warehouse the insured elects to use

    8.1.2

    On completion of unloading at any other warehouse or place of storage, before or at the named destination, which the insured or their employees elect to use for storage other than in the ordinary course of transit, or for allocation or distribution.

  3. A conveyance or container used for storage

    8.1.3

    When the insured or their employees elect to use any vehicle, conveyance or container for storage other than in the ordinary course of transit.

  4. Sixty days after discharge

    8.1.4

    On the expiry of 60 days after completion of discharge overside from the oversea vessel at the final port of discharge.

The two that cost people money

8.1.2 and 8.1.3 are elections. Taking a container to your own yard because the consignee is not ready, or breaking a consignment down for distribution at an intermediate depot, terminates the cover by choice — nobody has to tell you it has happened.

8.1.4 is a clock. Sixty days after discharge at the final port, the cover ends whether or not the goods have moved. Congestion, a customs hold or a dispute over charges can all consume it, and the cargo is then sitting uninsured on a terminal.

The clauses that sit around it

Forwarded to a different destination Clause 8.2
Where, after discharge at the final port of discharge but before the cover terminates, the goods are to be forwarded somewhere other than the insured destination, the cover does not extend beyond the moment they are first moved for the purpose of that onward transit.
Delay, deviation and transhipment Clause 8.3
The cover stays in force during delay beyond the control of the insured, any deviation, forced discharge, reshipment or transhipment, and during any variation of the adventure arising from a liberty granted to carriers under the contract of carriage — still subject to the four termination events and to Clause 9.
Termination of the contract of carriage Clause 9
Where, through circumstances beyond the insured's control, the contract of carriage ends somewhere other than the named destination, or the transit otherwise ends before unloading, the cover ends too — unless prompt notice is given and continuation requested, in which case it runs until the goods are sold and delivered there, or for 60 days after arrival, or onward to the destination.
Change of voyage Clause 10
A destination changed by the insured after attachment must be notified promptly for rates and terms to be agreed. Where the transit starts as contemplated but the ship goes elsewhere without the knowledge of the insured, the cover is nevertheless deemed to have attached.
Avoidance of delay Clause 18
It is a condition of the insurance that the insured acts with reasonable despatch in all circumstances within their control.

Common questions

When does cargo insurance start?
Under Clause 8.1 of the Institute Cargo Clauses, when the goods are first moved in the warehouse or place of storage named in the contract of insurance, for the purpose of the immediate loading onto the carrying vehicle for the commencement of transit. Not when the truck arrives, and not when the container is sealed.
What is the 60-day rule?
Clause 8.1.4: cover terminates on the expiry of 60 days after completion of discharge overside from the oversea vessel at the final port of discharge — whether or not the goods have reached their destination by then. It is one of four termination events, and whichever happens first ends the cover.
Does cover continue while goods sit in a distribution centre?
No. Unloading at a warehouse the insured elects to use for storage other than in the ordinary course of transit, or for allocation or distribution, terminates the cover under Clause 8.1.2. Goods being picked and repacked are no longer in transit, and stock throughput or storage cover is the right product for that.
Is war cover subject to the same duration?
No — and this is the trap. The Institute War Clauses (Cargo) attach as the goods are loaded on the vessel and terminate on discharge, rather than running warehouse to warehouse. Cargo seized in a terminal before loading can sit outside the war cover even though the main cover is live.
Price a transit What is excluded

Sources

Clause 8 is identical in the (A), (B) and (C) editions. The Institute War Clauses carry a different and narrower duration.

This page summarises the instruments above. It is not the wording, and it is not legal advice. Where a summary conflicts with a convention text, a policy wording or a certificate, that document governs.

InsuranceScanner is an insurance intermediary, not an insurer — see the Terms for our role. Nothing here is a personal recommendation that a particular cover, sum insured or deductible is suitable for you. Where anything on this page conflicts with the certificate, policy schedule or wording issued by an insurer, that document governs.