A warehouse-to-warehouse clause is an essential provision in marine cargo insurance policies that provides coverage for goods in transit from the origin warehouse to the destination warehouse. This clause plays a crucial role in ensuring the financial protection of cargo during transportation, covering risks encountered throughout the journey.
Elements of a Warehouse-to-Warehouse Clause
Origin Warehouse to Final Destination
The warehouse-to-warehouse clause extends coverage from the moment goods are dispatched from the initial storage facility (origin warehouse) until they reach the final storage location (destination warehouse). This includes any intermediate transit points, ports, and handling stations.
Types of Risks Covered
The clause typically covers multiple risks such as:
- Physical damage
- Theft and pilferage
- Natural disasters
- Accidents during transport
Coverage Duration
Coverage generally commences from the time the insured goods leave the origin warehouse and continues until they are delivered to the destination warehouse or a specified period afterward, typically up to 60 days after the goods arrive at the port of destination.
Historical Context and Development
Origin in Marine Insurance
The warehouse-to-warehouse clause has its roots in marine insurance practices from the 19th century. Historically, shippers and merchants demanded comprehensive coverage that included not only ocean transit but also land and storage risks.
Evolution with Modern Logistics
With the advancement of global trade and complex supply chains, the clause has evolved to address the requirements of multimodal transportation, ensuring seamless coverage across different modes of transport such as ships, trucks, and trains.
Applicability and Considerations
Common Industries
Industries that frequently utilize this clause include:
- Retail
- Manufacturing
- Pharmaceuticals
- Automotive
- Electronics
Special Considerations
While the warehouse-to-warehouse clause offers extensive coverage, policyholders should be aware of certain limitations and exclusions, such as:
- Improper packaging
- Inherent vice
- Delay in transit
- Wear and tear
Example of a Warehouse-to-Warehouse Clause in Practice
A pharmaceutical company shipping vaccines from its production facility in India to several distribution centers across Europe would rely on a warehouse-to-warehouse clause to insure the cargo. This coverage would protect the vaccines during:
- Storage at the production facility.
- Transportation to the port of shipment.
- Ocean transit to the destination port.
- Overland transport to various distribution centers.
- Temporary storage at the destination warehouse before final distribution.
FAQs
What happens if there is a delay in transit?
Are there any exclusions in the warehouse-to-warehouse clause?
Can the warehouse-to-warehouse clause be customized?
Related Terms
- Marine Cargo Insurance: A type of insurance designed to cover loss or damage to cargo transported oversea, encompassing provisions like the warehouse-to-warehouse clause.
- Multimodal Transport: Logistics operations that involve multiple modes of transportation, often covered under a single insurance policy.
References
- “Principles of Marine Insurance” by A.A. Thomson
- “Cargo Insurance Policies Explained” by Maritime Law Publications
- International Marine Transportation Insurance Guidelines
Summary
The warehouse-to-warehouse clause is pivotal in marine cargo insurance, ensuring goods are protected from the time they leave the origin warehouse until they reach their final destination. Understanding the scope, historical evolution, and applicability of this clause helps businesses mitigate risks and navigate the complexities of global trade efficiently.
