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uShip Cargo Insurance PolicyTable of ContentsLimits of Liability . 4Goods Insured . 4Deductible . 4SECTION 1: General Conditions . 5Geographical Limits . 5U.S. Economic and Trade Sanctions . 5Account . 5Payee . 5Interest . 5Accumulation . 5Valuation . 5Cancellation . 6Conveyances, Craft and Lighter . 6Carrier . 6Seaworthiness . 6Fraudulent Bills of Lading . 6Vessel Classification Clause . 6Average Terms and Conditions. 7Terrorism . 9SECTION 2: Additional Coverages . 10General Average . 10Landing, Warehousing and Forwarding Charges . 10Both to Blame . 10Sue and Labor . 10Brands and Trademarks. 10Expenses to Inspect, Repackage and Reship . 10Debris Removal . 10Airfreight Replacement . 11Pairs and Sets Clause . 11Deliberate Damage/Pollution Hazard . 11Deliberate Damage by Customs Service . 11Page 1
Cargo Ism Forwarding Charges (JC98/023 dated June 4, 1998) . 11Fumigation. 11Shore Coverage . 11SECTION 3: Duration of Risk Clauses . 12Transit . 12F.O.B/F.A.S. Purchases . 12Deviation/Errors and Omissions . 12Consolidation/Deconsolidation . 12Change of Destination. 12Refused or Returned Shipments . 12Termination of Transit (Terrorism) (JC2009/056 DATED January 1, 2009) . 12SECTION 4: Loss Adjustment Clauses . 14Constructive Total Loss . 14Partial Loss. 14Machinery . 14Labels . 14Demurrage Charges . 14Notice of Loss . 14Notice of Suit . 14Institute Service of Suit (USA) CL.355 November 1, 1992 . 15Institute Marine Policy General Provisions revised CL.269 October 1, 1982 (Amended) . 15Payment on Account . 16Subrogation . 16Other Insurance . 16SECTION 5: Certificates and Reporting . 17Certificates of Insurance . 17Authority to Issue Certificates . 17Letters of Credit . 17Reports of Shipments . 17Inspection of Records . 17SECTION 6: Other Coverages . 18Import Duty and Freight Payable on Delivery . 18F.O.B./F.A.S. Sales . 18Page 2
Increased Value . 18SECTION 7: Exclusions . 20General Exclusions . 20War Exclusion . 20Atomic and Nuclear Exclusion . 21SR&CC Exclusion . 21CARGO ISM (JC98/019 dated May 1, 1998) . 21Institute Radioactive Contamination, Chemical, Biological, Bio-Chemical and Electromagnetic . 21Weapons Exclusion CL.370 November 10, 2003 . 21Radioactive Contamination Exclusion, U.S.A. Endorsement. 21Institute Cyber Attack Exclusion CL.380 November 10, 2003 . 22UK Export Control Order 2008 – Revocation of Licenses Clause JC2010/015 . 22Strikes, Riots & Civil Commotions (AIMU January 1, 2008) . 23American Institute (AIMU) Amended War Risk Only (Cargo) Clauses . 25Page 3
MARINE OPEN CARGO POLICY SUMMARYSyndicate Listing – 100% WTK #457In accordance with your instructions, we have effected insurance with certain Underwriters at Lloyd’s,hereinafter referred to as Underwriters; in consideration of premiums to be paid at the rates set forth in theattached schedules, or as may be agreed upon from time to time, subject to the Clauses contained underthis insurance and all other terms, conditions, exclusions and warranties hereinafter set forth, unlessmodified or superseded elsewhere herein or endorsed hereon.Policy Number:11RTS7156Named Insured:uShip And/or Associated, Affiliated or Subsidiary Companies, Corporations,Firms or Organizations as may now exist or may become established, hereinafterreferred to as the Assured.205 Brazos Street; Austin, TX 78701Mailing Address:Policy Period:Twelve (12) months cover effective 9/1/2011 12:01 A.M. standard time at theaddress of the Assured as stated herein and expiring 9/1/2012 12:01 A.M. Thisinsurance to include all sendings but subject to cancellation by either the Assuredor Underwriters giving Notice of Cancellation as per the cancellation clausedefined herein.Limits of LiabilityUnderwriters shall not be liable for more than: 500,000any one vessel or conveyance per any one account of the Assured, except thatin the following cases this insurance shall cover for not more than: 50,000any one vessel subject to an On-Deck bill(s) of lading; 500,000any one aircraft or conveyance or in any one place at any one time; 50,000any one barge, except as a connecting conveyance; 500,000any one land or air conveyance for domestic transit only shipments in U.S.and/or Canada; 5,000any one package by parcel post, mail or similar parcel delivery service; 50,000Per any one customer of the Assured for shipments of Household Goods &Personal Effect; 75,000Per any one automobile, motorcycle, or boat; 25,000Per any one shipment of artwork or antiques; 2,500Per any one shipment consisting of mobile/cellular telephones; laptop and tabletcomputers and computer memory modules, card and sticks.Goods InsuredTo cover all lawful goods of every description including Household Goods, Personal Effects, Automobiles,Motorcycles, and Boats; however, the following commodities are excluded unless agreed upon in writing byUnderwriters: fresh foods; live animals; flowers; plants; cigarettes; cotton; eggs; cash in transit; specie;securities and other negotiable papers; bulk products; jewelry and precious stones and metals.DeductibleAs per Clause 15.Page 4
SECTION 1: General ConditionsGeographical LimitsTo and from ports and or places in the World to ports and or places in the World (but excluding entirelyshipments to/from Afghanistan, Iran, Iraq, Somalia, Sudan, truck/rail shipments to and within Mexicoother than as a connecting conveyance), with privilege of transshipment by land and/or water. Alsoincluding domestic shipments within the forty-eight (48) contiguous United States, Alaska, Hawaii andCanada. All other domestic shipments are excluded unless specifically endorsed hereon.Regardless of the Duration of Risk clauses found elsewhere in this Policy, coverage for shipments toHaiti, Nigeria, Pakistan and the Commonwealth of Independent States (CIS) ceases upon dischargefrom the ocean vessel or aircraft.The CIS presently includes: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia,Tajikistan, Turkmenistan, Ukraine and Uzbekistan.U.S. Economic and Trade SanctionsWhenever coverage provided by this Policy would be in violation of any U.S. economic or tradesanctions such as, but not limited to, those sanctions administered and enforced by the U.S. TreasuryDepartment’s Office of Foreign Assets Control (“OFAC”), such coverage shall be null and void. Similarly,any coverage relating to or referred to in any certificates or other evidences of insurance or any claimthat would be in violation of U.S. economic or trade sanctions as described above shall also be null andvoid.AccountFor account of whom it may concern.PayeeLoss, if any, payable to the Assured or order.InterestThis insurance is to cover all shipments made by or to the Assured or by or to others for the Assured’saccount or control, or in which the Assured may have an interest, also to cover all shipments for theaccount of others on which the Assured may receive instructions to insure or deem themselvesresponsible to insure, prior to sailing of vessel and prior to any known or reported loss or accident. ThisPolicy does not and is not intended to provide any legal liability coverage, except as explicitly agreed,absent a specific endorsement herein to the contrary.AccumulationShould there be an accumulation of interest beyond the limits expressed in this Policy by reason of anyinterruption of transit and/or occurrence beyond the control of the Assured, or by reason of any casualtyand/or at a transshipping point, and/or on a connecting steamer or conveyances, Underwriters shall holdcovered such excess interest and shall be liable for the full amount at risk, but in no event to exceedtwice the applicable Policy limit, provided notice be given to Underwriters as soon as known to theAssured.ValuationA. Goods and/or Merchandise (under invoice): Valued at amount of invoice, including all chargestherein, plus any prepaid and/or advanced and/or guaranteed freight, if any, plus 10%; or at amountsdeclared and agreed by Underwriters prior to shipment.B. Goods and/or Merchandise (not under invoice): Valued and insured for the Fair Market Value orActual Cash Value (replacement cost less depreciation) at place of shipment or arrival. It is furtherPage 5
agreed that irrespective of the value insured, claims for repairs shall be payable for the fair marketcosts of such repairs but in no event for more than the insured value.In no event shall claims exceed the value declared prior to shipment and declared for premium purposes.Foreign currency to be converted into U.S. dollars at rate of exchange current in New York on date ofinvoice.CancellationThis Policy shall be subject to 30 days Notice of Cancellation, by either party, giving the other partywritten notice to that effect, but such cancellation shall not affect any risk on which this insurance hasattached prior to the effective date of such notice.Notwithstanding the foregoing notice period, Underwriters may effect immediate cancellation by givingwritten notice thereof at any time when premiums have been due and unpaid for a period of thirty (30)days or more.Conveyances, Craft and LighterThis insurance shall attach on shipments by iron and/or steel vessels (propelled solely by mechanicalpower), aircraft, metal barges, rail and/or truck, and in all cases, including connecting conveyances. Thisinsurance shall further include transit by craft, raft or lighter to or from the vessel with each craft, raft orlighter to be deemed a separate insurance. The Assured are not to be prejudiced by any agreementexempting lightermen from liability.CarrierThis insurance shall not directly or indirectly benefit or insure any carrier or bailee.SeaworthinessThe seaworthiness of the vessel operating as a common carrier is hereby admitted as between theAssured and Underwriters and the wrongful act or misconduct of the ship-owner or his employeescausing a loss is not to defeat the recovery by an innocent Assured if the loss in the absence of suchwrongful act or misconduct would have been a loss recoverable on this Policy. With leave to sail with orwithout pilots, and to tow and assist vessels or craft in all situations, and to be towed. The Assured is notto be prejudiced by the presence of the negligence clause and/or latent defect clause in the Bill(s) ofLading and/or Charter Party.Fraudulent Bills of LadingThis insurance covers physical loss or damage to goods insured under this Policy occasioned throughthe acceptance by the Assured and/or their agents or shippers of fraudulent Bills of Lading and/orshipping receipts and/or messenger receipt.Also to cover loss or damage caused by the utilization of legitimate bills of lading and/or other shippingdocuments without the authorization and/or consent of the Assured or their agents.In no event, however, does this insurance cover loss or damage arising from the shipper’s fraud ormisstatement.Vessel Classification ClauseThis insurance covers shipments as specified herein, shipped on:A. Metal-hulled, self-propelled vessels which are not over 20 years of age nor less than 1,000 netregistered tons and which are classed A1 American Record or equivalent by a member of theInternational Association of Classification Societies; orPage 6
B. Vessels over 20 years of age but less than 40 years of age, which are approved by Underwriters,and which are not less than 1,000 net registered tons and classed as in (A) above, but only whileoperating in their regular trades, shall be subject to additional premiums;C. Vessels over 40 years of age and/or vessels not classed A1 American Record or equivalent by amember of the International Association of Classification Societies, which are approved byUnderwriters, but only while operating in their regular trades, shall be subject to additionalpremiums and the following conditions:1) an additional deductible of three percent (3%) of the total insured value (subject to a minimumdeductible of 1,000) shall apply;2) a maximum limit of liability of 1,000,000 any one vessel shall apply.D. Barges (other than as a connecting conveyance), which are approved by Underwriters, but onlywhile operating in their regular trades, shall be covered by this insurance even though the PolicyLimits for same may otherwise be nil. However, additional premiums and the following specialconditions shall apply:1) an additional deductible of three percent (3%) of the total insured value (subject to a minimumdeductible of 1,000) shall apply;2) a maximum limit of liability of 250,000 any one barge shall apply.E. But in any case, excluding shipments on:1) chartered vessels that are not classed A1 American Record or equivalent by a member of theInternational Association of Classification Societies;2) chartered vessels over 40 years of age;3) vessels on break-up voyages;4) chartered barges;5) vessels built for service on the Great Lakes;6) vessels built solely for Military or Naval Service; or7) vessels built for carriage of dry bulk or liquid bulk cargoes, and which are more than 15 years ofage.The above provisions shall not, however, prejudice any claim hereunder, when presentation of theadvice of such claim to Underwriters is the first indication that a transshipment, beyond control of theAssured, has been made by a vessel which is not covered above, provided the appropriate additionalpremium is paid as soon as practicable thereafter.Average Terms and ConditionsA. “All Risks”Unless otherwise specified below, this Policy insures new approved goods against “All Risks” ofphysical loss or damage from any external cause, except as excluded by the Clauses in Section 7 ofthis Policy.Each claims for loss or damage shall be subject to the following Deductibles:Shipments of approved merchandise valued up to 10,000 shall be subject to a deductible of 100.00.Shipment of approved merchandise valued in excess of 10,000 but up to 100,000 shall be subjectto a deductible of 250.00.Shipment of approved merchandise value in excess of 100,000 but not to exceed the policy limits ofliability shall be subject to a deductible of 1,000.In addition to the insuring condition noted above, the following special insuring conditions/deductibleshall apply:HOUSEHOLD GOODS AND PERSONAL EFFECTS:Shipments valued up to 10,000 shall be subject to a deductible of 100 each and every loss.Page 7
Shipments valued in excess of 10,000 but not to exceed 25,000 shall be subject to a deductible of 250 each and every loss.Shipments valued in excess of 25,000 up to the policy limits for this commodity shall be subject to adeductible of 750 each and every loss.The following warranties shall apply: Any single antique or piece of artwork shall not exceed 5,000in insured value. A valued itemized inventory must be available to Underwriters prior to shipment.The following clauses, conditions and exclusions shall also apply:a. AVERAGE CLAUSE: This Policy is subject to the condition of average, that is to say, if thegoods insured by this insurance shall, at the time of loss, be of greater value than the suminsured under this insurance, the Assured shall only be entitled to recover such proportion ofthe said loss as the sum insured by this Policy bears to the total value of the said goods.b. DEPRECIATION: Underwriters' liability is restricted to the reasonable cost of repair and noclaim is to attach for depreciation consequent thereon.c. Excluding loss or damage due to moth, vermin, wear, tear and gradual deterioration.d. ACCOMPANIED PERSONAL EFFECTS: Excluding loss from unattended vehicle.e. EXCLUDED GOODS: Excluding loss of or damage to furs, or any cash, notes, stamps,deeds, tickets, traveler’s checks, jewelry, watches, or similar valuable articles.AUTOMOBILES, MOTORCYCLES AND BOATS:Each automobile, motorcycle or boat valued up to 10,000 shall be subject to a deductible of 100each and every loss.Each automobile, motorcycle or boat valued in excess of 10,000 but not to exceed 50,000 shall besubject to a deductible of 250 each and every loss.Each automobile, motorcycle or boat valued in excess of 50,000 but not to exceed the policy limitsfor these commodities shall be subject to a deductible of 750 each and every loss.This policy shall exclude claims for scratching, denting, marring and cost of repainting, unless theassured is able to demonstrate that such damage is the result of a peril insured against.No coverage shall be granted hereunder while any vehicle is being operated under its own power,except during loading or unloading operations.ARTWORK AND ANTIQUES:Artwork and Antiques valued up to 10,000 shall be subject to a deductible of 100 each and everyloss.Artwork and Antiques valued in excess of 10,000 but not to exceed the policy limits for thesecommodities shall be subject to a deductible of 250 each and every loss.B. Optional FPA TermsOption is hereby granted the Assured, when exercised and so declared to Underwriters prior tosailing of vessel and before any known or reported loss or accident, approved goods may beinsured:Warranted Free from Particular Average (FPA) unless the vessel or craft be stranded, sunk or burnt,but notwithstanding this warranty Underwriters are to pay any loss or damage to the interest insuredPage 8
which may reasonably be attributed to fire, collision or contact of the vessel and/or conveyance withany external substance (ice included) other than water, or to discharge of cargo at port of distress;and also to pay the insured value of any merchandise and/or goods jettisoned and/or washed or lostoverboard.If shipment is by aircraft - FPA AIR PERILS shall apply. Warranted Free from Particular Averageunless caused by the aircraft suffering an accident in takeoff or landing, or coming to earth at a placeother than an airfield, or in a collision with another aircraft; or being on fire or by jettison.Note: Wherever FPA terms appear in this Policy, they are deemed to also include FPA Air Perils.For an additional premium, coverage may be extended to include theft and/or non-delivery of anentire shipping package.C. Used GoodsInsured against “All Risks” of physical loss or damage from any external cause, except as excludedby the Clauses in Section 7 of this Policy.However, coverage is subject to the following:1. Excluding rust, oxidation, and discoloration.2. It is warranted that the shipper or their representative shall perform a pre-shipment conditionsurvey with photographs. Should the assured fail to conduct the required survey, coverageshall further absolutely exclude marring, chipping, scratching, and denting.3. Underwriters shall not be liable for more than 500,000 on any one conveyance.4. Each claim shall be subject to the deductibles noted in Clause 15 of the policy to which thisendorsement is attached.D. “On Deck” Bill of Lading – FPA TermsGoods on deck subject to an on deck bill of lading are insured Warranted Free from ParticularAverage (FPA) unless the vessel or craft be stranded, sunk or burnt, but notwithstanding thiswarranty Underwriters are to pay any loss or damage to the interest insured which may reasonablybe attributed to fire, collision or contact of the vessel and/or conveyance with any external substance(ice included) other than water, or to discharge of cargo at port of distress; and also to pay theinsured value of any merchandise and/or goods jettisoned and/or washed or lost overboard.Notwithstanding the foregoing, goods insured shipped on deck under an under deck bill of lading,without the knowledge and consent of the shipper, shall be treated as under deck cargo and insuredas per sub-division A of this Clause.TerrorismIt is agreed that in accordance with the provisions of the US Terrorism Risk Insurance Act of 2002, wherecoverage for acts of terrorism is already included in this Policy, the portion of the annual premium statedelsewhere in this Policy attributable to coverage for such acts of terrorism is ½ of 1% of the annualpremium.Page 9
SECTION 2: Additional CoveragesGeneral AverageThis insurance covers general average and salvage charges, adjusted or determined according to thecontract of carriage and/or the governing law and practice, incurred to avoid or in connection with theavoidance of loss from any cause. Such payments shall be payable in full, irrespective of insured orcontributory values.Landing, Warehousing and Forwarding ChargesNotwithstanding any average warranty contained herein, if this policy in the absence of such warrantywould be liable, Underwriters agree to pay for the following: landing, warehousing, forwarding andspecial charges; any partial loss arising from transshipment; the insured value of any package, piece, orunit totally lost in loading, transshipment or discharge; and for any loss or damage to
Policy Number: 11RTS7156 Named Insured: uShip And/or Associated, Affiliated or Subsidiary Companies, Corporations, Firms or Organizations as may now exist or may become established, hereinafter referred to as the Assured. Mailing Address: 205 Brazos Street; Austin, TX 78701 Policy Period: Twelve (12) months cover effective 9/1/2011 12:01 A.M. standard time at the
