Clause incorporated in freight policies to cover threefourths of the shipowner’s liability for collision damage that may attach to freight. The clause is used only where freight is liable to be called upon to contribute to collision liability, i.e. where certain foreign laws may apply to the settlement. In English law freight is not taken into account in assessing the shipowner’s liability for collision.

Insurable interest of a consignee who has paid freight on goods when delivered over the ship’s rail but where the goods remain at risk until arriving at the final destination.

The insurance of the freight earned by shipowners. Shipowners usually insure freight for 12 months by fixing an amount that could be earned on any one round voyage. Bill of lading freight is normally paid in advance and added to the value of the goods by the cargo owner. The insurable value of freight is the gross value of freight receivable by the shipowner plus the cost of insurance. See also FREIGHT; FREIGHT COLLISION CLAUSE.

Clause 22 of the International Hull Clauses (11/2002) under which the insurer waives his right to freight earned or to be earned by a ship that is the subject of a constructive total loss claim. See ABANDONMENT.

A type of loss that combines high probability with low impact, the predictable nature of which means that it can usually be assumed and managed, e.g. shoplifting, minor mechanical breakdowns.

Cargo damaged by fresh water without the operation of a maritime peril. This risk, together with other extraneous risks such as damage by other cargo, hooks, oils and sweat may added to the policy when governed by Institute Cargo Clause (B) or (C). Clause (A), ‘all risks, is already wide enough to embrace the risk. The freshwater loss/damage must be fortuitous, happening by reason of some external cause.

Otherwise known as ‘collecting societies’ they are like industrial life companies but owned and operated for the benefit of its members. They are authorised to transact industrial life assurance as defined in the Industrial Assurance Act 1923. Friendly societies started as local organisations, distributing benefits to sick and bereaved members. They have to be registered under the Friendly Societies Act 1974 and are subject to the supervision of the FSA.

(1) an unincorporated association set up under the provisions of the Friendly Societies Act 1974, or similar earlier legislation, and carrying on certain types of insurance business allowed by that Act; (2) an incorporated society set up under the provisions of the Friendly Societies Act 1992 and allowed to carry on a wider range of insurance and other financial activities than is permitted under the 1974 and earlier legislation.
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A mutual society established for the relief or maintenance of its members or their relatives during sickness or othr infirmity or in old age or widowhood or for life assurance and certain other purposes.

An insurance company not regarded as one of the ‘majors’ by whom or for whom business is written in one of the underwriting rooms near Lloyd’s.

An act ‘for one’s own purposes. It describes circumstances when an employer is not vicariously liable for the tort of his employee because the latter was not acting in the course of employment as he was ‘on a frolic of his own’, i.e. engaged in an activity on his own account. In Hilton v. Thomas Burton (Rhodes) Ltd (1961) demolition workers left work in the employer’s van to go to a cafe. The driver, an employee of the defendants, was negligent and the foreman was killed. The defendants were not liable as the men were on a ‘frolic of their own’.