18 
Report on Insurance of British Shipping.—Part IV. 
(2.) That immediately after the outbreak of such a war a State insurance office be 
opened in London for the insurance by the State against King’s enemy risks of cargo 
starting on a voyage after the outbreak of war. 
(3.) That the rate of premium charged by the State for covering these risks be a 
flat one, irrespective of the voyage or the character of the cargo insured. 
(4.) That the State shall have the right to fix and vary such rates of premiums, 
within a maximum of 5 per cent, and a minimum of 1 per cent. But a rate agreed 
for a specific voyage shall hold good, provided the cargo starts on such voyage within 
14 days. If, however, the 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. 
(5.) That the values of cargo for State insurance shall be the values agreed in the 
marine insurance policies covering the same cargo. 
(6.) That these marine insurance policies must be produced at the State office, 
when the State insurance of war risks is finally arranged. 
(7.) That the premium for insurance must be paid in cash to the State office when 
the provisional insurance is effected. 
(8.) That if, when the marine insurance policies are produced, the values in those 
policies shall be less than the amount provisionally insured in the State office, the 
premium on the excess value will be refunded, but no increased value on a shipment 
will then be accepted. 
(9.) That marine insurance policies will only be accepted by the State if issued 
by members of Lloyd’s, British Insurance Companies and other approved Insurance 
Companies and Underwriters. 
(10.) That claims under the State insurance policy shall be settled on the basis of 
the marine insurance policy, but such marine insurance policy shall be deemed to 
contain such standard clauses (if any) as may be approved by the State in regard to the 
particular class of cargo insured. 
(11.) That the State insurance of cargo shall be confined to cargo on vessels 
insured by the State. 
(12.) That the State shall be prepared to insure all cargo on such vessels, 
irrespective of the nationality of the owner of such cargo, except, of course, enemy 
cargo. 
(13.) That a Board or Boards of Advisers shall be established to assist the 
Government both with the administrative work of the State office and with the settle 
ment of claims. 
(14.) That one of these Boards should be appointed at once with a permanent 
secretary. Its duties will be :— 
(a.) To fill in all the details of the organisation of the State office and to revise 
them from time to time. 
(b.) To fix and revise from time to time the standard clauses which the State will 
deem to be in marine insurance policies when it assumes the King’s enemy 
risks excluded from those policies. 
(15.) That all claims shall be settled by the Board of Advisers, but in the event of 
any dispute with the assured as to the proposed settlement, the liability of the State 
will have to be settled (failing agreement to refer to arbitration) by the Courts of Law. 
(16.) That payment of all agreed claims be made at once in cash. 
Concluding Remarks. 
93. We further recommend that, if our proposals are approved of, the); shall be 
made public as soon as possible. This is, in our opinion, essential, not only in order that 
the necessary changes in the present arrangements for mutual insurance of hulls should 
be made by the Clubs, but also in order that the details of our proposals for insuring 
cargoes may be carefully prepared and periodically revised by the Board of Advisers 
which we recommend should be appointed for the purpose. 
94. We have already pointed out that, in the absence of experience of the effect of 
naval warfare on our oversea trade as it now exists, it is impossible to form any reliable 
estimate of the liabilities which the State would incur if these proposals are adopted. 
We have shown, however, in paragraphs 23-27, 34 and 90, that on the assumption that 
5 per cent, of all British steamships which on the outbreak of war are at sea or in ports 
of the enemy are captured, and that during the six months following the outbreak of war