Short-tail (risk)

A type of insurance where claims are usually made during the term of the policy or shortly after the policy has expired. Property insurance is an example of short tail business. The opposite of short tail business is long tail business.

Shut Out Clause

At times the whole or part of the cargo of an insured may be shot out from the vessel due to various reasons like lack of space in the vessel or suddenly the weather turning bad, forcing closure of the vessel hatches. In such cases, the cargo of the insured would be lying on the wharf, quay or pier and exposed to static risk till it is shipped on board another vessel when the normal transit risk under the policy would re-attach. Shut out clause provides coverage to the shut out cargo as per the terms and conditions of the main policy. It also extends coverage while the shut-out cargo is moved to another wharf, quay, pier or to a storage location awaiting the next vessel. This is a “held covered” provision meaning, the assured should notify the insurer about the shut out cargo as soon as he comes to know of it.