16
Report on Insurance oe British Shipping.—Part IY.
on cargo. It would not, we think, be necessary for the board to meet for this purpose
more than twice a year. It is essential to protect the State against the insertion in
marine policies of special clauses which might involve it in much more extended
liabilities than are usually understood by the sea risk clause. There would, of course,
be no possible objection to the adoption of such special clauses for ordinary purposes;
but the State is entitled to fix the standard clauses which it will require in marine
policies when it assumes the King’s enemy risks excluded from these policies, and
cargo-owners, too, are entitled to know the requirements of the State in this respect.
88. There is one other point on which we wish to make a few remarks. We have
shown that the State will be able, by forbidding the movement of vessels, to avoid the
loss of these vessels and of their cargoes. It is quite right that the State should, in the
interests of the community and in its own protection, have this right and exercise it;
but we submit that the right must be exercised with great discretion. It must not,
for instance, be possible for shipowners or cargo-owners to say that the State has taken
their premiums to cover a certain risk and has then exercised such precaution as to
avoid running all the risks it has undertaken. We have already suggested that, in the
case of ships, the State should, when requested to do so, refund the premium it has
received to cover a particular voyage if this voyage is prohibited ; and we are of opinion
that this privilege should be extended to the cargo-owner.
89. We have now completed the general outline of our proposals for State insurance
of cargoes after the outbreak of war.
The Extent of the Liability of the State for Losses on Cargoes.
90. We are, of course, unabB to give any indication of what the losses in respect
of cargoes will be in time of war. But the assumption we have made, by way of
illustration, that 5 per cent, of the vessels engaged after the outbreak of war in the
foreign trade would be lost in six months represents a loss of about 200 ships. The
values of the cargoes carried under normal trade conditions vary greatly on vessels and
on voyages, but each ship in the foreign trade of the United Kingdom carries, on the
average, 40,000Z. worth of cargo per voyage. If this average be adopted for the
purposes of illustration, then the value of the cargo lost on the 200 ships would be
8,000,Q0GZ.
Part IY.—Summary.
91. We recommend—
(A.) In the case of Hulls—
(1.) That arrangements should be made with the existing Clubs, or Mutual War
Risks Associations, that they shall extend their existing standard forms of policy to
cover the King’s enemy risks up to the arrival of the vessels at the final port on the
voyage which thev are making when war breaks out or hostilities have begun, and for
ten clear clays after such arrival.
(2.) That arrangements should be made with these Clubs for the issue of policies
covering the King’s enemy risks on vessels starting on voyages after this country
is at war.
(3.) That the State shall reinsure 80 per cent, of all these risks.
(4.) lhat no premium shall be charged by the State in respect of voyages current
at the outbreak of war.
(5.) That, for voyages begun after the outbreak of war, the State shall fix the
insurance premium to be charged on a voyage basis and shall receive 80 per cent, of
such premium.
(6.) That the State shall have the right to fix and vary the premiums from time
to time as may be considered necessary within a suggested maximum of a per cent, and
a minimum of 1 per cent. ; but a rate agreed for a specific voyage shall hold good if the
vessel sails on that voyage within 14 days of the completion of the insurance. On the
other hand, if the starting of a voyage is delayed under the orders of the Admiralty,
the assured, shall have the option of cancelling the policy and receiving back the
premium paid.
(7.) That the Clubs shall run the remaining 20 per cent, of these risks, both before
