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Institute Replacement Clause

The document outlines the final versions of three Institute Replacement Clauses effective from December 1, 2008, which include updates to existing language and new provisions for proportional valuation and obsolete parts endorsement. The clauses specify the limits of recoverable costs in the event of loss or damage to insured machines or manufactured items. It also notes that these clauses are illustrative and may be modified based on individual policy conditions.

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63 views4 pages

Institute Replacement Clause

The document outlines the final versions of three Institute Replacement Clauses effective from December 1, 2008, which include updates to existing language and new provisions for proportional valuation and obsolete parts endorsement. The clauses specify the limits of recoverable costs in the event of loss or damage to insured machines or manufactured items. It also notes that these clauses are illustrative and may be modified based on individual policy conditions.

Uploaded by

dharmadhikarismita793
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Joint Cargo Committee

Room358, Lloyd’s, One Lime Street


London EC3M 7DQ
Tel: (+44) 020 7327 3333 Fax: (+44) 020 7327 4443

Enquiries to: Neil Smith JC 2008/023


Direct Dial: 0207 327 8333 1 December 2008
Neil.smith@lmalloyds.com

Institute Replacement Clause 01/12/2008 (CL372)

Institute Replacement Clause – Proportional Valuation 01/12/2008 (CL373)

Institute Replacement Clause – Obsolete Parts Endorsement (JC2008/023)

Following the circulation of consultation drafts of the above clauses back in February
2008, please find attached the final versions of these wordings. Please note that the
only amendment to the previously circulated versions is the replacement of the word
“Insurers” for ”Underwriters” within clauses CL372 and CL373.

The Institute Replacement Clause 01/12/2008 (CL372) is intended to update the


language of the existing Institute Replacement Clause 01/01/1934 (CL161).

The Institute Replacement Clause – Proportional Valuation 01/12 2008 is a new


wording which allows a proportional value limitation where this is deemed
appropriate.

The third wording, the Institute Replacement Clause – Obsolete Parts Endorsement
01/12/2008 (JC2008/023) is a JC endorsement drafted for use with either of the
above in circumstances where replacement items may be obsolete and new items
may need manufacturing.

It should be noted that these clauses are purely illustrative and different policy
conditions may be agreed. Specimen clauses are available to any interested person
upon request. In particular:

a) in relation to any clause which excludes losses from the cover, insurers
may agree a separate insurance policy covering such losses or may
extend the clause to cover such events;

b) in relation to clauses making cover of certain risks subject to specific


conditions each insurer may alter the said conditions.

Neil Smith
Secretary

Information relating to the work of the Joint Cargo Committee, including


circulars and details of forthcoming Cargo Forum meetings, can be accessed
from the Joint Cargo Committee page of the LMA website www.lmalloyds.com
The page can be accessed via the following link:
http://www.lmalloyds.com/AM/Template.cfm?Section=Joint_Cargo1&Template=
/TaggedPage/TaggedPageDisplay.cfm&TPLID=3&ContentID=7044
01/12/2008

INSTITUTE REPLACEMENT CLAUSE

In the event of loss of or damage to any part(s) of an insured machine or other


manufactured item consisting of more than one part caused by a peril covered by
this insurance, the sum recoverable shall not exceed the cost of replacement or
repair of such part(s) plus labour for (re)fitting and carriage costs. Duty incurred in
the provision of replacement or repaired part(s) shall also be recoverable provided
that the full duty payable on the insured machine or manufactured item is included
in the amount insured.

The total liability of Insurers shall in no event exceed the amount insured of the
machine or manufactured item.

CL372
01/12/2008
01/12/2008

INSTITUTE REPLACEMENT CLAUSE – PROPORTIONAL VALUATION

In the event of loss of or damage to any part(s) of an insured machine or other


manufactured item consisting of more than one part caused by a peril covered by
this insurance, the sum recoverable shall not exceed such proportion of the cost of
replacement or repair of such part(s) as the amount insured bears to the new cost
of the machine or manufactured item, plus labour for (re)fitting and carriage costs.
Duty incurred in the provision of replacement or repaired part(s) shall also be
recoverable provided that the full duty payable on the insured machine or
manufactured item is included in the amount insured.

The total liability of Insurers shall in no event exceed the amount insured of the
machine or manufactured item.

CL373
01/12/2008
INSTITUTE REPLACEMENT CLAUSE– OBSOLETE PARTS ENDORSEMENT

(For use only with the Institute Replacement Clause 01/12/2008 (CL372) or the
Institute Replacement Clause – Proportional Valuation 01/12/2008 (CL373))

In the event of a claim recoverable under this policy necessitating the


manufacture of any new part(s) for the repair of an insured machine or
other manufactured item, the sum recoverable shall not exceed the
manufacturer's last list price for the year of manufacture of the lost or
damaged part(s), uplifted for inflation. Inflation shall be determined by
reference to the Retail Price Index, or other officially published data of the
country of manufacture of the insured machine or manufactured item, up to
a maximum total uplift of 25%.

if no such manufacturer's list price is available, the total liability shall in no


event exceed the amount insured of the machine or manufactured item.

JC 2008/023
01/12/2008

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