Item no 8.1 of Clause 8 of the Institute Cargo clause provides that upon delivery to the Assured/consignees or at any other final place of storage at the destination named in the policy, the cover will be terminated. The termination of transit under the particular clause also takes place if the assured elects to use the storage place either,
(i) For storage other than in the ordinary course of transit.
(ii) For allocation or distribution.
Looking at storage other than ordinary course of transit, an example would be where the movement of goods is deliberately stopped by an assured at an intermediate warehouse perhaps because the original warehouse is full and/or used for the allocation or distribution for the purpose of breaking down the consignment into smaller units for onward transit. Since marine policy does not cover such storage risk, the cover under the marine policy will terminate as soon as the storage is effected voluntarily.
However, Multi Transit and intermediate storage cover for a maximum period of 56 days may be granted to the client as per Rule X of erstwhile All India Marine Cargo Tariff if such storage is done for the purpose of allocation, distribution, and processing only.
Moreover, the cover during storage at Carriers’ godown, Bonded warehouse, Clearing and Forwarding Agent’s godown are also generally granted if the client is compelled to keep the materials therein due to unavoidable circumstances like transport strike, Port strike, delay due to examination and assessment of duty on the goods by the Customs Authorities, etc.
Since storage at any godowns is not automatic, the extension of storage cover should not be granted at the inception of cover, other than multi transit with intermediate storage cover. In case of unavoidable circumstances, the client should approach the underwriters for an extension of storage cover with suitable reasons for such storage prior to the expiry of the policy.
Regards,
Anaita Vas
