Marine Terms and Ocean Cargo Insurance Abbreviations
1. Glossary of Marine Terms
AD VALUREM BILL OF LADING: See Valued Bill of Lading.
ADJUSTER: Individual charged with the responsibility of determining if a particular loss is covered by the insurance policy and, if so, the amount which will be paid to the claimant.
ADVANCE: An agreed percentage increase applied to the total of invoice plus freight. This provides for unknown expenses at the time of shipment, and covers a portion of the Assured's profit. It also may be used to develop sufficient value on the merchandise in order to prevent coinsurance in the event of a General Average.
ADVANCED FREIGHT: Freight paid to the carrier by the shipper when merchandise is accepted for shipment. Not refundable, even if the vessel and/or cargo does not arrive at the intended port of discharge. Also referred to as Prepaid Freight.
AFFREIGHTMENT: A contract which sets forth the obligations of both a shipper and a carrier concerning transportation of the merchandise. The most common forms of affreightment are Bill of Lading and Waybills.
CARRIAGE OF GOODS BY WATER ACT (COGWA): The Canadian equivalent of The Hague Rules (which see). All shipments of cargo, for which Bills of Lading are issued between Canada and foreign ports, are subject to the provisions of this act.
CARRIER: The firm which transports merchandise from one point to another. May be a vessel owner/manager/operator, an airline, a truck operator or a railroad.
CAUSE OF LOSS: A phrase used to identify the peril or action which caused loss or used to describe resultant loss. For rusted because of having been wetted may be identified as rust because the seawater or moisture) may not be damage to merchandise. Sometimes example, steel products may arrive during transit. The cause of loss actual peril (rain, condensation, determinable.
CERTIFICATE OF INSURANCE: A document presented by the insurance company or Assured as evidence to a third party that insurance is in effect. The Assured may assign his rights under this negotiable document to a third party, usually the consignee, by endorsing the reverse of the certificate in the same manner as a personal check (see Endorsement in Blank).
CHARTER PARTY : A contract between a shipowner and another party for the use of a vessel for one or more voyages or for a specific period of time. Terms of the charter party govern the rights and obligations of each party, and may not contain the same responsibilities that exist under other contracts of affreightment.
CLAIMANT: An individual filing a claim for loss or damage to merchandise.
CLAIM AGENT: Usually an overseas representative of the insurance company that a claimant can contact in the event of loss or damage.
CLEAN BILL OF LADING: A Bill of Lading on which the carrier has made no indication of any problems with the condition of the cargo at the time of acceptance for carriage.
CLEAN RECEIPT: A delivery receipt upon which no exceptions for damage or shortage have been noted by the party receiving the merchandise.
COGSA: See Carriage of Goods by Sea Act.
COGWA: See Carriage of Goods by Water Act.
COLLECT FREIGHT: Freight which is not payable to the carrier unless the merchandise arrives at the port of discharge named in the Bill of Lading.
COMMERCIAL INVOICE: A document issued by the seller to the buyer which clearly indicates the merchandise being sold, type of packaging used, number of units being shipped, per unit cost and the total cost up to the point named in the terms of sale. It should also include names of seller and buyer.
COMMON CARRIER: Any shipowner or other carrier who offers his vessel or other mode of transportation to the public, in general, for the purpose of transporting merchandise.
CONSULAR INVOICE: Special invoice required by some countries to control merchandise shipped to them. The form required may vary from country to country, and it must be notarized or validated by the country's consulate prior to shipment of merchandise.
CONSUMPTION ENTRY: See Customs Entry Form.
CONTAINER: Metal, steel, aluminum or fibreglass reinforced plywood boxes in which merchandise is shipped. Usually 20 and 40 feet in length and used to facilitate the movement of merchandise. Each container in use usually has a unique identifying number assigned to it.
CONTAINER NUMBER : See Container.
CONTAINER SEAL: A metal, steel, aluminum or plastic device affixed to the locking mechanism of a container - door to deter unauthorized opening. Usually affixed by the party packing the container for shipment, each seal is numbered and may contain a code identifying the manufacturer and user.
Container seal numbers should be shown on all documents issued in conjunction with a shipment as well as the container number to which it is affixed. Parties taking delivery of a container should verify against the documents that the container number and seal number are correct. It is also important to be certain that the seal has not been tampered with. Exceptions should be noted if any discrepancies exist.
CONTAINER SEAL NUMBERS: See Container Seal.
CONTRACT OF CARRIAGE: See Affreightment.
CONTRIBUTORY VALUE: The value of property saved as a result of General Average Act which forms the basis for determining each party's contribution in General Average.
CUSTOMS BROKER: A firm which specializes in clearing imported merchandise for transit to the interior. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs and arranging inland transport as well as paying all charges related to the functions.
CUSTOMS ENTRY FORM: A form required by Customs for all merchandise entering a country. It indicates country of origin, description of merchandise and amount of estimated duty to be paid before merchandise is released by Customs, unless other arrangements have been made.
DECLARATION: Form supplied by insurance companies, and used by Assureds in reporting shipments under an Open Cargo Policy when no evidence of insurance is required.
DELIVERY RECEIPT: A document used by carriers to signify delivery of the merchandise to the intended party. May be a copy of the Bill of Lading or Waybill.
DOCK RECEIPT: A form issued by a carrier or his representative as evidence that merchandise was in fact received by the carrier for shipment. Often referred to as a Received For Shipment Bill of Lading.
DOOR TO DOOR: Refers to merchandise shipped in containers, trailers or vans from the original point of manufacturer to the final destination. Also referred to as House to House.
ENDORSEMENT IN BLANK: By endorsing the reverse of a Special Cargo Policy or a Certificate of Insurance, the Assured may assign the rights to insurance. The firm name is typed or stamped on the document and it is signed by the individual authorized to execute the Special Cargo Policy. Order Bills of Lading are negotiated in the same manner.
EXCEPTIONS: Notations on a delivery receipt, made by the person receiving the merchandise, stating that the container or shipping package or merchandise was received in a damaged condition or that total quantity was not received. Establishes evidence that the shipment was not sound, or complete, at time of delivery. If no exceptions are taken during the course of shipment, it may be difficult for a claimant to prove that a loss actually occurred prior to their receiving the merchandise.
EXTENT OF LOSS : The dollar amount (insured value) of the merchandise lost or damaged.
FILING CLAIM: The formal action taken against the party causing a loss by the party suffering a loss. Also, formal presentation to an insurance company of a claim under an insurance Policy.
FRANCHISE: Used to eliminate normal expected losses on certain commodities. It represents a percentage of the insured value or a fixed amount which the loss must equal or exceed in order to be paid. If the amount of the franchise is met or exceeded, the loss is paid in full.
FREIGHT FORWARDER: Firm specializing in arranging transport of merchandise and completing documentation required for the orderly transport of merchandise. Occasionally, they will take merchandise for the purpose of packing or consolidating with other cargo for export to the same country.
FULL VALUE DECLARED: (FVD) a notation on an Air Waybill which indicates that a specific value has been declared to the carrier for carriage of the merchandise.
GENERAL AVERAGE: A voluntary sacrifice or extraordinary expense incurred during transit to protect all interests from an impending peril.
GENERAL AVERAGE CONTRIBUTION: The amount each party involved in a General Average must contribute. It is determined by applying the General Average percent to each party's contributory value.
GENERAL AVERAGE GUARANTEE: A form of promissory note provided by a party involved in a General Average guaranteeing payment of all contributions legally due. If insured under an Open Ocean Cargo Policy, the insurance company will usually provide their Guarantee.
GENERAL AVERAGE PERCENT: A percentage derived by dividing the total amount of loss and expense incurred as a result of a General Average by the total amount saved as a result of General Average, which is applied to each party's contributory value.
GUARANTEED FREIGHT: Freight which is not prepaid but which is payable whether or not the merchandise arrives at the final port of destination.
HAGUE RULES : See The Hague Rules.
HOUSE AIR WAYBILL: An Air Waybill issued by a freight forwarder for an air shipment.
HOUSE TO HOUSE : See Door to Door.
HOUSE WAYBILL: Waybill issued by a freight forwarder for air or truck shipments.
IGLOO: A metal, fiberglass or wooden container used by airlines to consolidate small packages into a single shipping unit while on aircraft.
INLAND WAYBILL: See Waybill.
INSURED VALUE: The amount for which merchandise has been insured. Usually based on pre-agreed formula, or stated amount, contained in the Open Policy.
INVOICE: A “bill of sale” issued by the seller to the buyer indicating the items purchased and the amount. The two most common types being a Commercial Invoice and a Consular Invoice.
LASH (Li ghter Aboard Ship) : An ocean vessel which carries specially designed barges.
MARKS AND NUMBERS: Unique identifying information shown on the outside of all packages shipped. Usually include: consignee name, port of discharge, package number in relation to total number of packages shipped (e.g., 5/50 indicates package number 5 of 50 shipped) and brief description of contents. Codes (referred to as “Blind Markings”) are often used to hide the identity of merchandise which is highly susceptible to theft or pilferage.
MASTER AIR WAYBILL: An Air Waybill issued by the originating airline when more than one airline is involved with a shipment, or when a freight forwarder issues a House Air Waybill.
NATURE OF LOSS: See Cause of Loss
NO VALUE DECLARED (NVD): A notation on an Air Waybill which indicates that no separate value has been declared to the carrier of the merchandise. Liability of the carrier would therefore be as defined by statute or as incorporated in the waybill. Also referred to as a Released Bill.
NON-DELIVERY: Unexplained disappearance of an entire shipping package rather than the contents themselves or a portion of the contents.
ON BOARD BILL OF LADING: A Bill of Lading issued by the steamship company, confirming the receipt of merchandise and the fact that it was loaded on board the ocean vessel.
OPEN OCEAN CARGO POLICY : See Open Policy.
OPEN POLICY: Insurance contract tailored to the needs of an individual assured which automatically insures all covered shipments for which insurance must be provided according to the terms of sale. The contract remains in force until cancelled by either the Assured or the insurance company.
ORDER BILL OF LADING: A Bill of Lading which shows the shipper or buyer as the consignee. It is a negotiable document and interest is transferred from one party to another by endorsement in the same manner as a Special Policy or Certificate of Insurance.
PACKING LIST: Usually issued in conjunction with a Supplier's Invoice detailing the types of merchandise, size and quantity per shipping unit.
POLICY OF INSURANCE: See Special Cargo Policy.
PREPAID FREIGHT: Freight paid by the shipper to the carrier when merchandise is tendered for shipment. Not refundable if the merchandise does not arrive at the intended destination.
PRO FORMA : Term used to refer to a Trucker's Waybill or Bill of Lading.
RECEIVED FOR SHIPMENT BILL OF LADING: See Dock Receipt.
RECOVERY: The actual act of pursuing damages from responsible parties.
RELEASED BILL: See No Value Declared.
SALVAGE: Usually the amount of money realized from the sale of damaged merchandise.
SALVAGE LOSS: When merchandise has been damaged and an amount of depreciation cannot be agreed upon by the claimant and company, the company or their appointed surveyor will solicit bids from persons interested in buying the damaged merchandise. The extent of loss will be the difference between the amount realized from the salvage sale and the insured value of the damaged merchandise.
SALVAGE SALE : Public sale of damaged merchandise. See Salvage Loss also.
SEAL NUMBER : A metal, steel, aluminum or plastic device affixed to the locking mechanism of the door to a truck, railcar, airline igloo or container. See Container Seal.
SHORT FORM BILL OF LADING: A summary-type Bill of Lading which does not incorporate all obligations and responsibilities of both parties. Unless a shipper is familiar with the carrier's tariff, he should request a full Bill of Lading.
SHORTAGE: A term used to indicate non-receipt of a part of the total quantity shipped.
SPECIAL CARGO POLICY: Similar to a Certificate of Insurance, except it is an insurance in and of itself and not subject to the underlying terms of an Open Policy when title has been transferred to a third party.
SUBROGATION: Assignment or transfer of rights of an Assured who has suffered loss to its insurance carrier at the time of payment by said insurance company (this basically puts the insurance carrier in the same position as the Assured with their rights against other parties).
SUPPLIER'S INVOICE: See Invoice.
SURVEY: An examination of damaged merchandise to ascertain the cause and extent of damage.
SURVEYOR: In ocean cargo, an individual well versed in shipping practices, packaging techniques, characteristics or properties of merchandise shipped in international trade and attendant damage which may happen to it.
TERMS OF SALE: Usually refers to an internationally accepted set of definitions which outlines the responsibilities of a buyer and seller for loss or damage to merchandise during transit.
THE HAGUE RULES: International agreements defining the responsibilities and liabilities of an ocean carrier transporting cargo in foreign trade .
UNIFORM STRAIGHT BILL OF LADING: See Waybill.
VALUED BILL OF LADING: A Bill of Lading issued by the carrier which indicates the amount which the shipper has declared as the value of merchandise. The carrier will be liable for this amount in the event he is found responsible for loss or damage to the merchandise.
VALUED INVENTORY: Usually used for shipments of household goods and personal effects. Lists actual items shipped and the individual value they are insured for.
WARSAW CONVENTION: Defines the responsibilities/liabilities of air carriers transporting merchandise in international trade.
WAYBILL: A Bill of Lading issued by a carrier showing the merchandise to be transported and shipping instructions. It is usually used by airlines and truckers. See Air Waybill, House Air Waybill, House Waybill, Master Air Waybill.
2. Common Ocean Cargo Insurance Abbreviations
|Ocean Cargo Insurance Abbreviations
||Bill of Lading
|C. & F.
||Cost and Freight
||Cost. Insurance and Freight
||Carriage of Goods by Sea Act
||Constructive Total Loss
||Door to Door
||Difference in Conditions
||Estimated Time of Arrival
||From something (e.g., ex dock, ex warehouse, ex ship, etc.)
||Freight all Kinds
|F.C. & S.
||Free of Capture and Seizure
||Forty-foot Equivalent Unit
||(refers to container capacity of vessels)
||Float on/Float off
||Free on Board
||Free of Particular Average
||Free of Particular Average Conditions
||Free of Particular Average Conditions
||Full Value Declared
||Institute Cargo Clauses
||Irrespective of Percentage (without franchise)
||Invoice Value, Insured Value or Increase Value
|J. & L.O.
||Jettison and Loss Overboard
|J. & W.O.
||Jettison and Washing Overboard
||Letter of Credit
||Lighter Aboard Ship
||Lift on/Lift off
||Less Than Trailer Load
||No Value Declared
||Non-Vessel Operating Common Carrier
||On or After, On or About
||Roll on/Roll off
||Rust, Oxidation and Corrosion
||Sailing or Sling
|S.R. & C.C.
||Strikes, Riots and Civil Commotions
||Twenty-foot Equivalent Unit (refers to the container capacity of vessels)
||Theft and/or Non-Delivery
||Theft, Pilferage and Non-Delivery
||With Average Irrespective or Percentage
||Warehouse to Warehouse
||Without Particular Average
||World to World