ON 12 April, the High Court brought to an end a question in the case of a marine transit insurance policy.

The case, Swashplate Pty Ltd v Liberty Mutual Insurance Company, arose from damage to a helicopter shipped from the US to Australia insured under a maritime transit policy.

Swashplate arranged to ship a helicopter from Mississippi to the Sunshine Coast Airport. Before the helicopter was loaded and shipped, Swashplate arranged through its broker to obtain marine transit insurance. The helicopter was damaged in transit because it was insufficiently or unsuitably packed in the shipping container.

A note released by Norton White on the case said the court considered the question of whether the inclusion in a placement slip for what ordinarily would be a voyage policy, of a date for the commencement of the period of insurance has the effect that the policy attaches on that date rather than in accordance with the Standard Institute Cargo Clauses (A).

In short: when did the insurance kick in?

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“The Institute Cargo Clauses provided that cover attached when the cargo was first moved in the hangar warehouse for loading. However, the placement slip indicated a specific date for commencement of the period of insurance,” the note reads.

“The date on which the policy commenced was relevant to determining if an exclusion for damage resulting from insufficiency of packing before cover commenced would apply. The Full Court of the Federal Court had held on 13 August 2020 that the date of commencement included in the placement slip was indicative only of when the cover was likely to commence. Further that the actual commencement of cover was to be determined by the Institute Cargo Clauses provisions and a ‘Static Cover’ endorsement which provided for up to five days cover prior to loading.”

The note continues: “If the date shown on the placement slip had been the date of commencement of cover, the transit would have commenced (and the insufficient packing which Liberty relied upon to refuse cover would have occurred) before the inception of the policy. This was because the Court had held that the date in the placement slip was the date in Mississippi where the transit had commenced rather than the date in Australia (a day earlier) where the insurance was placed.”

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