Marine Insurance

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According to the marine insurance policies, the new Jason clause is included in most of the bill of ladings. To understand the meaning of the new Jason clause, it is important to understand how marine insurance works.

What is marine insurance?

A marine insurance policy is an agreement whereby the insurance company or the insurer undertakes to cover the insured, against transit losses. A typical marine insurance policy covers against the losses caused to:

  • Cargo present on the vessel
  • Hull or the vessel itself

Cargo insurance covers the damage caused to the goods and shipments loaded on the ship. It covers the damage occurring during transit. Hull insurance covers the damage caused to specifically the ship or the vessel during the transit.

There are various perils of the sea that can be a cause of loss when the voyage takes place. These perils can cause damage to the ship as well as the cargo present on the ship. Some damages take place on account of unavoidable disasters and some take place due to negligence.

Jason Clause

The new Jason clause requires the cargo owner to contribute to the general average. The cargo owner has to pay for damages as caused by the negligence of the ship/carrier owner. In such a case, the new Jason clause should be present in the bill of landing.

A general average implies that the loss or damage to the ship or the cargo is shared by the ship and the cargo owner.

Thus, the new Jason clause protects the ship owners in case of damage caused by the negligence of the shipowner or the crew.

Prior to the adoption of the Harter Act in 1893, the ship owners received no benefit from the cargo owners when sustaining losses due to the ship owner’s negligence. To establish a way in which the negligent shipowner could recover in general average, the ship owners inserted a clause in their bill of landing. It stated that recovery can be permitted whenever the ship was released from the claims under the Harter Act and had undergone a process of due diligence. Later the carrier immunities were revised in the Carriage of Goods by Sea Act of 1936 and the new Jason clause was included.

Read More: Why do You Need Marine Insurance?

Important takeaways from the new Jason clause:

  • The new Jason clause applies in event of an accident, danger, damage or disaster
  • The accident can take place before or after the commencement of the voyage
  • The owners of the goods shall contribute with the shipowners in general average
  • Contribution can be for payment of any sacrifices, losses or expenses of a general average nature
  • The contributions made will also pay for the salvage and special charges incurred in respect of the goods.

Case Study:

A manufacturing company wanted to send a consignment of raw materials to a company located in Singapore. It took the help of a shipping company to send the consignment via voyage. All the raw materials were properly packaged to ensure their safety. The ship owners also carried out due diligence of the ship before the journey commenced.

Read More: Who can buy Marine Insurance?

During the voyage, due to the negligence of the crew member, a fire broke out causing damage to the ship. The shipowner had the new Jason clause included in the bill of landing. So, the surveyor was sent to oversee the situation when the ship owners contacted their marine insurance policyholders. He found that the incident took place due to the negligence of the crew member during the journey. Also, the bill of landing included the new Jason clause. Hence the owners of the cargo (manufacturing company), also had to contribute in the general average for the losses that the ship faced.