Glossary

Marine claim terms,
defined plainly.

Cargo and hull and machinery claim terms, each in a few sentences. Where a guide goes deeper, the entry links to it.

Claim documents

Bill of Lading: The document the carrier issues for goods shipped: a receipt for the goods, evidence of the contract of carriage and, in its negotiable form, a document of title. A clean bill records the goods in apparent good order and condition; a claused bill carries remarks, such as wet or torn bags.; Read the guide
Commercial Invoice: The seller's invoice to the buyer for the goods. In a cargo claim it sets the value basis. Its quantities should match the packing list and the bill of lading; differences between the three are a frequent gap in a claim file.; Read the guide
Deck Log: The ship's own record kept on the bridge by the officers on watch. It records navigation, weather, cargo operations and events such as the opening and closing of hatches. In a cargo claim it is often compared line by line with the statement of facts.; Read the guide
Engine room logbook: The record kept by the ship's engineers of machinery operation, readings such as pressures and temperatures, alarms and orders from the bridge. In a hull and machinery claim the file needs extracts covering a period before and after the casualty, not only the hour of the event.; Read the guide
Letter of protest: A written statement by the master, an agent or a cargo interest that records disagreement with a fact or reserves rights, for example on times in the statement of facts or on the condition of cargo. Some charterparties accept the master's letter of protest where a signed statement of facts could not be obtained.; Read the guide
Master's statement: The master's signed and dated account of a casualty: what happened, when and what was done. It should be consistent with the deck and engine room logbooks.; Read the guide
Mate's Receipt: The receipt signed by the chief officer when cargo is loaded on board. Remarks on it about the condition or quantity of the goods are normally carried over into the bill of lading.; Read the guide
Notice of readiness: The master's notice that the ship has arrived and is ready to load or discharge. Under the charterparty terms it usually starts the laytime clock. Its time is one of the first entries in the statement of facts.; Read the guide
Outturn report: The record of what was actually discharged, in quantity and condition, against the bill of lading or manifest. For containers or break bulk it is often the first record of a shortage or of visibly damaged packages.; Read the guide
Packing List: The shipper's list of how the goods were packed and marked, package by package. With the commercial invoice it lets you check the quantity claimed against the quantity shipped. A bulk shortage claim may have none.; Read the guide
Sea protest (note of protest): A formal declaration by the master, before a notary, consul or port authority, of events during the voyage that may have caused damage, such as heavy weather. The formalities depend on the law of the place where it is made. Where one is made, it belongs in the file next to the master's statement and the logbooks.; Read the guide
Statement of Facts: The chronological record of a port call, usually prepared by the ship's agent and countersigned by the master. It lists events with dates and times: notice of readiness, berthing, start and end of loading or discharge, and interruptions for weather or other reasons. It is the basis of laytime and demurrage calculations, and it is often compared with the deck log.; Read the guide
Survey Report: The surveyor's report on the nature, extent and likely cause of the loss or damage, usually with photographs. It is strongest when the other side was invited to attend. A wet damage report should separate fresh water from sea water damage.; Read the guide

Cargo claims

Draft Survey: A method of establishing the weight of a bulk cargo by reading the ship's drafts before and after loading or discharge, corrected for ballast, fuel, fresh water and water density. Surveys at both ends of the voyage are the usual basis of a bulk shortage claim.; Read the guide
Joint survey: A survey attended by surveyors for both sides, for example the receivers and the carrier, or owners and underwriters. Under the Hague-Visby Rules, written notice of loss is not needed if the state of the goods was the subject of a joint survey or inspection at receipt. Keep the invitation to attend in the file.; Read the guide
Shortage: A claim that less cargo was delivered than was shipped. For bulk cargo it turns on quantity figures from both ends of the voyage, usually draft surveys; for packaged goods, on the tally and the outturn report against the bill of lading.; Read the guide
Wet damage: Damage to cargo by water, from rain, sea water, condensation or a leak. The claim turns on the cause of the water and on when the hatches were open, so the weather entries and hatch times in the deck log and statement of facts are often the lines that matter most.; Read the guide

Hull and machinery

Class (classification society): A classification society sets technical rules for ships and surveys them against those rules. A ship that meets them is in class. After a casualty, class attends to assess the damage, and hull policies commonly require the ship to keep its class.; Read the guide
Condition of class: A requirement from the classification society that repairs or further surveys are carried out within a set time for the ship to keep its class. Some societies call it a recommendation. It is often imposed at the first attendance after a casualty and closed after the permanent repair.; Read the guide
Hull and machinery (H&M) insurance: Insurance of the ship itself: hull, machinery and equipment against physical loss or damage from an insured peril, such as grounding, collision, heavy weather or fire. Policies usually also respond to the ship's share of general average and salvage, to sue and labour costs and to part of the collision liability. The cover is set by the clauses of the actual policy.; Read the guide
Repair specification: The description of the repair work that yards are asked to price. It is the basis for tenders and should record later additions. Where owners carry out their own work in the same yard stay, the invoices need to show which items relate to the damage.; Read the guide

Insurance and recovery

Average bond: An undertaking signed by the cargo owner or receiver to pay the cargo's share of general average once the adjustment is made. Shipowners usually ask for it, together with an average guarantee or a cash deposit, before they release the cargo.; Read the guide
Average guarantee: A guarantee from the cargo insurer that it will pay the cargo's contribution to general average as adjusted. It is usually given together with the average bond signed by the cargo owner.; Read the guide
Claims leader: The insurer that handles a claim on behalf of all the insurers on a risk that is shared between several of them. Under the Nordic Marine Insurance Plan the role is set out in the conditions. Owners usually notify the claims leader or leading underwriter through the broker.; Read the guide
Deductible: The part of a covered loss that the assured bears before the insurer pays. Hull clauses commonly apply it per accident or occurrence. Whether general average, salvage and sue and labour are subject to it depends on the conditions of the actual policy.; Read the guide
General average: A sacrifice or expenditure made intentionally and reasonably for the common safety of ship and cargo in a peril. The loss is shared between the interests in the voyage in proportion to their values. The adjustment is usually made under the York-Antwerp Rules incorporated in the contracts of carriage.; Read the guide
P&I club: A mutual association of shipowners that insures its members against liabilities to third parties, such as liability for cargo, crew, pollution and the share of collision liability not covered by the hull policy. Clubs often handle cargo claims against their members and appoint local correspondents.
Recovery: The claim against the party responsible for a loss, often the carrier, to recover what was paid. Cargo insurers usually pursue it by subrogation after paying the assured. Its time limits run from delivery, not from the date the insurer pays.; Read the guide
Salvage: A service that saves a ship or cargo in danger at sea. The salvor's reward is set by the salvage agreement or by law, often on a no cure, no pay basis. Ship and cargo usually contribute to it in proportion to their saved values.; Read the guide
Subrogation: The right of an insurer that has paid a claim to take over the assured's rights against a third party responsible for the loss. The insurer then pursues the recovery in the assured's place. Its scope depends on the policy and the applicable law.; Read the guide
Sue and labour: Costs the assured reasonably incurs to avert or reduce a loss that the policy would cover. Marine policies usually pay them in addition to the loss itself. Whether the deductible applies to them depends on the conditions.; Read the guide
York-Antwerp Rules: Rules for adjusting general average, published by the Comité Maritime International in several versions, the latest in 2016. They apply because the contracts of carriage incorporate them, and the version that applies is the one named in those contracts.; Read the guide

Time bars and conventions

Clause paramount: A clause in a bill of lading or charterparty that incorporates a cargo regime, usually the Hague or Hague-Visby Rules, into the contract. It is often the first place to look when working out which notice and suit periods may apply.; Read the guide
Delivery: The moment the carrier hands the goods over to the person entitled to receive them. Under the Hague-Visby Rules the time for suit runs from delivery, or from the date the goods should have been delivered. When delivery took place is a question of fact and of the contract, so record its source.; Read the guide
Hague Rules: The 1924 convention on bills of lading, still in force for a number of states. Notice of loss or damage that is not apparent is due within three days, and suit must be brought within one year of delivery. Whether they apply depends on the contract and the law.; Read the guide
Hague-Visby Rules: The Hague Rules as amended by the 1968 and 1979 Protocols. Written notice is due at delivery, or within three days if the damage is not apparent; a missed notice makes the claim harder to prove but does not end it. Suit must be brought within one year of delivery, unless the parties agree an extension after the cause of action has arisen.; Read the guide
Hamburg Rules: The 1978 UN convention on the carriage of goods by sea, in force since 1 November 1992 for the states that are party to it. Notice of damage that is not apparent is due within 15 consecutive days, and proceedings must be brought within two years. The period can be extended by a written declaration of the person against whom the claim is made.; Read the guide
Notice of Claim: The written notice to the carrier, or its agent, of loss or damage to the goods. It is separate from the time for suit: giving notice does not stop the time bar running. Notice periods depend on the regime and the contract.; Read the guide
Rotterdam Rules: The 2008 UN convention on contracts for the carriage of goods wholly or partly by sea. It sets a two-year period for proceedings, which can be extended by declaration. It is not in force: it needs 20 ratifications or accessions and has far fewer.; Read the guide
Time bar: The period within which proceedings must be brought; after it, the claim is usually lost. It depends on the regime, the contract, the forum and the applicable law, so confirm the date for each claim and record the document it rests on. This is not legal advice.; Read the guide
Time extension: An extension of the time for suit, granted by the carrier or its P&I club, usually while settlement talks continue. Ask for it in writing well before the period expires and record the new expiry date as the extension states it. An ongoing discussion is not an extension, and whether one is effective is a legal question.; Read the guide

Shipping terms

Average adjuster: A specialist who prepares the adjustment of a general average or of a hull and machinery claim. The adjustment sets out the costs claimed, the items allowed and how they are shared or recovered. Average adjusters are usually independent of the parties.; Read the guide
Charterparty: The contract between a shipowner and a charterer for the use of a ship, for a voyage, for a period of time or as a bareboat charter. It sets laytime, demurrage and other terms, and it can incorporate a cargo regime and an arbitration clause with their own time limits.; Read the guide
Demurrage: The amount the charterer pays the shipowner for time used beyond the agreed laytime, at the rate set in the charterparty. A demurrage claim is calculated from the statement of facts, and some charterparties require a signed statement of facts with it.; Read the guide
Laytime: The time allowed in a charterparty for loading or discharge without extra payment to the shipowner. Whether a period counts, for example a stoppage for rain, depends on the charterparty clauses. Time used beyond laytime is usually paid as demurrage.; Read the guide

General explanations, not legal advice. The meaning of a term in a given claim can depend on the contract, the policy and the governing law.

Marine claim terms,defined plainly.