Shippers normally send out cargoes in advance whenever there are long holidays approaching. On such occasions, the cargoes would have to be stored in go-downs or warehouses for a longer period of time.

Mr. Chan has just encountered a similar situation in which his cargoes have to be stored at the warehouse for the Lunar New Year holidays. Mr. Chan would like to know if his cargo insurance will cover this extended period of time for storing the goods at the warehouse.

It would depend on which clause Mr. Chan’s cargo insurance is applying. For Institute Cargo Clauses (ICC) 1982 version, it states that the cargo insurance cover will commence “8.1…from the time the goods leave the warehouse or place of storage at the place named herein for the commencement of the transit, continues during the ordinary course of transit…” This means that the cargo insurance would attach only after the goods leave the warehouse and continue on their journey. So for Mr. Chan’s case, if his cargo insurance applies this clause, his goods stored at the warehouse during the long holidays would not be covered.

Whereas for ICC 2009 version, it states that the cargo insurance cover will commence “8.1…from the time the subject-matter insured is first moved in the warehouse or at the place of storage (at the place named in the contract of insurance) for the purpose of the immediate loading into or onto the carrying vehicle or other conveyance for the commencement of transit, continues during the ordinary course of transit…” That means that the insurance would attach when the goods are moved from the factory to the warehouse. So if this clause applies to Mr. Chan’s cargo insurance, his goods stored at the warehouse during the Lunar New Year holidays would be covered.

Therefore, it is recommended that cargo owners to take out cargo insurance using ICC 2009 version so as to also cover the transition period occurring in the warehouse. In addition, if cargo owners foresee a longer period of storage time in the warehouse (i.e not immediately loading the cargoes to carrying vehicle) during special occasions, it is recommended to inform the insurer in advance to determine whether this extra period of time is covered or if there would be any coverage extension if applicable.

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