Delay Damages and Marine Cargo Insurance

Delay Loss and Cargo Marine Insurance concerns the treatment under marine cargo insurance of loss, damage, expense or economic loss resulting from delay in the transport or delivery of insured cargo.

ICC(A), ICC(B) and ICC(C) 1/1/09 contain a common Clause 4.5 exclusion for loss, damage or expense caused by delay. The exclusion is drafted to apply even where the delay itself is caused by a risk insured against.

The delay exclusion is therefore not merely a rule that applies where there is no physical cargo damage. Physical or quality deterioration may itself fall within the delay exclusion where the relevant damage was caused by the passage of time or delayed transit.

Conversely, where a separate casualty such as fire, water entry, theft, abnormal impact or refrigeration failure occurs while cargo is delayed and that casualty causes physical damage, it is necessary to distinguish “a casualty occurring during delay” from “damage caused by delay.”

Clause 4.5 also expressly excepts expenses payable under Clause 2. General average and salvage charges must therefore be analysed under Clause 2 rather than being rejected merely because delay is involved.

This article focuses on ICC 1/1/09 Clause 4.5 and examines its structure, its relationship with MIA 1906 Section 55, causation of physical damage, Clauses 2 and 4.4, Clause 18 Avoidance of Delay, refrigerated cargo, insurance duration, demurrage, detention and freight-forwarding practice.

Scope of This Article

Item	What This Article Covers	What Other Articles Cover
ICC Clause 4.5	The exclusion for loss, damage or expense caused by delay	Excluded Losses under Cargo Marine Insurance examines the overall general-exclusion structure
ICC(A), ICC(B) and ICC(C)	The common delay exclusion applying to all three conditions	The individual ICC articles examine their respective insured perils
Inherent vice	How passage of time and the natural characteristics of cargo may overlap	Inherent Vice and Insurance Exclusion examines Clause 4.4 in detail
Separate casualty during delay	Distinguishing delay itself from fire, wetting, theft or temperature loss occurring while delayed	Specialist casualty articles examine the individual peril
General average and salvage	The express Clause 2 exception within Clause 4.5	General Average examines security, contribution and adjustment
Frozen and chilled cargo	Distinguishing deterioration through time from a separate temperature-control casualty	Refrigerated and Frozen Cargo articles examine temperature endorsements
Duration	Why coverage duration must be reviewed separately for a casualty during prolonged delay	Transit Route and Insurance Period examines the Transit Clause in detail
Demurrage and detention	Distinguishing delay charges from insured cargo loss	Demurrage, Detention and Storage Charges examines contractual cost allocation
Carrier liability	Separating the cargo-policy delay exclusion from carrier liability	Carrier and NVOCC liability articles examine contractual responsibility

Basic Structure of Clause 4.5

The central question under Clause 4.5 is not simply whether delay occurred. The analysis must determine whether the particular loss, damage or expense being claimed was caused by delay.

Element	What to Confirm	Practical Significance	Main Evidence
Existence of delay	The difference between the planned and actual transit or delivery schedule	Establish where, when and for how long the cargo was delayed	Booking, vessel schedule, arrival notice and release records
Loss being claimed	Physical damage, quality loss, fall in value, penalties or expenses	Separate the existence of delay from the head of claim	Cargo photographs, inspection, contracts and invoices
Causation by delay	Whether passage of time or late arrival caused the loss	This is the central Clause 4.5 issue	Chronology, quality evidence, market evidence and expert analysis
Cause of the delay	Marine casualty, congestion, strike, customs issue or route change	Clause 4.5 may remain relevant even where delay was caused by an insured risk	Carrier notice, port information and casualty report
Separate casualty	Whether fire, wetting, theft or machinery failure occurred during the delay	Determine whether delay was merely the background rather than the damage-producing cause	Incident report, photographs, temperature records and police report
Clause 2	Whether the expense is general average or salvage payable under Clause 2	Clause 4.5 contains an express exception for Clause 2 expenses	General average declaration and Average Adjuster documents
Other exclusions	Whether inherent vice or ordinary loss is also relevant	Multiple provisions can arise in the same casualty	Cargo specification, quality and measurement data
Duration	Whether insurance remained in force when a separate casualty occurred	Do not confuse the delay exclusion with termination of cover	Policy, storage, release and delivery records

Distinguishing the Cause of Delay from Loss Caused by Delay

A distinctive feature of Clause 4.5 is that it addresses loss caused by delay even where the delay itself results from an insured risk.

For example, assume that an insured vessel fire causes the vessel to enter a port of refuge and the shipment is delayed by twenty days.

If the cargo itself is physically damaged by the fire, that physical loss is analysed by reference to the fire and the applicable insurance terms.

If the cargo is physically sound but misses its seasonal market because of the twenty-day delay, the loss of market value is a loss caused by delay and Clause 4.5 becomes material.

The question “Was the delay caused by an insured casualty?” is therefore different from the question “What caused the loss now being claimed?”

Where a Separate Casualty Occurs During Delay

Loss occurring while cargo is delayed should not automatically be classified under Clause 4.5.

Situation	Role of Delay	Possible Direct Cause	Main Analysis	Evidence
Warehouse leakage during port congestion	The reason the cargo remained in storage longer	Water entry from the warehouse	Determine whether the wet damage was caused by leakage	Warehouse incident report, photographs and storage records
Theft while cargo waits for a vessel	The reason for prolonged presence at the location	Theft or pilferage	Review the theft risk and insured duration	Police report, seals and inventory records
Power interruption during refrigerated delay	The reason the cargo remained in the reefer longer	Power failure or refrigeration failure	Determine whether a temperature casualty caused the physical deterioration	Temperature, power and machinery records
Expiry of product life through delay alone	The damage-producing circumstance itself	Passage of time	Review Clauses 4.4 and 4.5	Production date, product life and transit schedule
Warehouse fire during prolonged storage	The background explaining why the cargo was still present	Fire	Review the fire peril and insured duration	Fire report, storage record and policy

The practical distinction is whether delay merely kept the cargo in a particular place for longer, or whether the passage of time itself produced the loss.

Relationship with General Average and Salvage under Clause 2

Clause 4.5 excludes loss, damage or expense caused by delay but expressly excepts expenses payable under Clause 2.

Clause 2 addresses specified general average and salvage charges adjusted or determined under the contract of carriage and the applicable law and practice.

If a vessel fire results in a port-of-refuge call, a general average declaration and a substantial delay, a general average contribution should not be rejected merely because the casualty also delayed the voyage.

The separate question is whether the charge satisfies Clause 2.

Head of Claim	Main Cause	Relationship with Clause 4.5	Other Provision to Review
Loss of market	Late arrival	Typical delay-loss issue	Clause 4.5
Quality deterioration through prolonged transit	Passage of time	Physical deterioration can still raise Clause 4.5	Clauses 4.4 and 4.5
General average contribution	General average act	Express Clause 2 exception must be considered	Clause 2
Salvage charges	Salvage operation	Analyse separately under Clause 2	Clause 2
Wet damage from warehouse leakage	Water-entry casualty	Where direct cause is separate from delay, review that casualty	Applicable ICC and insured duration

Relationship with MIA 1906 Section 55

MIA 1906 Section 55(2)(b) establishes the principle that an insurer is not liable for loss proximately caused by delay even where the delay is caused by a peril insured against.

ICC 1/1/09 Clause 4.5 adopts a closely related contractual structure by excluding loss, damage or expense caused by delay even though the delay itself is caused by a risk insured against.

The ICC wording also expressly preserves expenses payable under Clause 2. Individual claims should therefore be analysed under the actual incorporated policy wording rather than by reference only to the general statutory principle.

Clause 18 Avoidance of Delay

ICC 1/1/09 also contains Clause 18 Avoidance of Delay, which is separate from Clause 4.5.

Clause 18 requires the Assured to act with reasonable despatch in all circumstances within its control.

Clause 4.5 concerns whether the claimed loss was caused by delay. Clause 18 concerns the conduct of the Assured in circumstances over which it has control.

Provision	Main Issue	Typical Review	Practical Distinction
Clause 4.5	Whether the loss was caused by delay	Causal relationship between passage of time and loss	Cause of loss
Clause 18	Whether the Assured acted with reasonable despatch in circumstances within its control	Timing of instructions, release and remedial arrangements	Conduct of the Assured
Transit Clause	Whether insurance remained in force at the time of a casualty	Purpose of storage, release and delivery	Duration of insurance

Physical Cargo Damage and Economic Loss

Loss	Example	Relationship with Delay	Main Review
Loss of sales opportunity	Seasonal goods miss the sales period	Typical economic delay loss	Arrival date, sales period and cargo condition
Fall in market value	Market price is lower by the time the goods arrive	Value loss resulting from late arrival	Market evidence and cargo condition
Contractual penalty	Buyer claims a late-delivery penalty	Commercial or contractual consequence	Sales contract and penalty provision
Business interruption	A factory stops because components arrive late	Consequential loss separate from physical cargo loss	Production evidence, delivery schedule and cargo condition
Decay or quality deterioration	Food deteriorates during prolonged transit	Physical deterioration may still raise Clause 4.5 where delay caused it	Product life, temperature and schedule
Fire damage during delay	Cargo burns in a warehouse while waiting	Review the separate physical casualty	Fire cause and insured duration

Frozen and Chilled Cargo — Distinguishing Passage of Time from a Temperature Casualty

Clause 4.5 is particularly important for refrigerated cargo because delay and physical deterioration can arise together.

Situation	Possible Cause	Insurance Review	Important Evidence
Product life expires while temperature remains normal	Passage of time and cargo characteristics	Clauses 4.4 and 4.5	Production date, product life and temperature data
Refrigeration machinery fails during delay	Machinery failure	Review a separate temperature casualty and applicable endorsement	Reefer log, alarms and repair record
Power supply is interrupted during delay	Power failure	Review direct cause and actual insurance terms	Power log and temperature record
Temperature data appears normal but cargo deteriorates	Pre-shipment quality or inherent deterioration	Review Clause 4.4	Quality testing, pre-cooling and production date
Cargo temperature rises after an abnormal temperature event	Temperature-control casualty	Determine whether the temperature event rather than delay caused the loss	Raw data, cargo-core temperature and quality testing

Neither “the cargo was delayed, therefore Clause 4.5 applies to everything” nor “machinery failed during the delay, therefore delay is irrelevant” is a sufficient analysis. The actual causal sequence must be established.

Relationship with Insured Duration

The mere fact that transit is delayed does not automatically terminate marine cargo insurance.

Where a separate casualty occurs during prolonged waiting, however, it is necessary to determine whether the cargo remained within the ordinary course of transit under the applicable Transit Clause, whether it had entered storage for a purpose outside transit, or whether another termination event had already occurred.

The delay exclusion and termination of insurance are therefore separate issues.

Where the loss itself was caused by delay, Clause 4.5 becomes material. Where a separate casualty occurs while the cargo is delayed, the cause of that casualty and the insured duration at the time of occurrence should both be reviewed.

Demurrage, Detention and Storage Charges

Delay can generate demurrage, detention, warehouse storage charges, additional delivery charges and other expenses.

Those charges differ from loss of or damage to cargo and are not recoverable under marine cargo insurance merely because they arose during an insured shipment.

It is also incorrect to assume that the expense provisions in cargo insurance make ordinary demurrage recoverable under Clause 2. Clause 2 concerns general average and salvage charges, not ordinary demurrage or detention.

The nature of each charge, cause, free-time terms, transport contract and responsibility for the delay should be examined separately from the cargo-insurance claim.

Clause 4.5 Application Flow

1. Confirm the insurance policy and applicable ICC.
   Review ICC(A), ICC(B), ICC(C), endorsements and commodity-specific terms.
2. Compare the planned and actual transit.
   Establish where the delay occurred, when it began and its duration.
3. Identify the cause of delay.
   Review marine casualty, congestion, strike, customs delay, route change or other reason.
4. Separate each head of claim.
   Distinguish cargo damage, quality deterioration, market loss, penalties and storage charges.
5. Determine whether physical or quality damage exists.
   Physical damage does not by itself remove Clause 4.5 from consideration.
6. Analyse causation by delay.
   Determine whether the passage of time itself produced the relevant loss.
7. Investigate separate casualties during delay.
   Look for fire, theft, leakage, machinery failure or temperature events.
8. Review Clause 4.4 separately.
   Distinguish inherent characteristics from delay.
9. Review Clause 2.
   Where general average or salvage is involved, consider the express exception within Clause 4.5.
10. Review Clause 18.
    Confirm reasonable despatch in circumstances within the Assured's control.
11. Confirm insured duration.
    Apply the Transit Clause to a separate casualty occurring during delay.
12. Mitigate further loss.
    Monitor cargo condition and take reasonable protective action.
13. Preserve third-party rights.
    Give appropriate notice to Contracting Carriers, Actual Carriers, warehouses and other parties.
14. Submit the evidence for insurance review.
    Report the delay, separate casualty and individual heads of claim distinctly.

Cases That Frequently Cause Practical Problems

Case	Main Issue	Evidence	Decision Point	Initial Action
Seasonal goods miss the sales period	Goods remain physically sound but market value falls	Transit schedule, sales plan and cargo condition	Economic loss caused by delay	Separate cargo damage from commercial loss
Frozen cargo thaws during delay	Passage of time versus reefer failure	Temperature, power and equipment records	Identify the direct cause	Preserve raw data and samples
Warehouse leakage during a strike delay	Strike and delay versus water-entry casualty	Warehouse record, photographs and storage period	Separate delay from the physical casualty	Notify the warehouse and insurance side
Late vessel arrival creates contractual penalties	Cargo damage versus commercial loss	Sales contract and penalty demand	Separate the contractual claim from cargo damage	Classify each head of claim
Customs delay creates demurrage	Cargo insurance versus contractual cost allocation	Customs record and carrier invoice	Do not confuse the charge with Clause 2	Establish cause and contractual responsibility
Theft occurs during delay	Delay versus theft peril	Police report, seals and inventory	Confirm theft timing and insured duration	Preserve evidence and third-party rights
Food deteriorates after prolonged transit	Clauses 4.4 and 4.5	Product life, temperature and pre-shipment quality	Analyse passage of time and inherent characteristics	Arrange quality inspection
Fire occurs during prolonged storage	Insured duration and fire peril	Storage purpose, fire record and policy	Separate delay exclusion from duration	Preserve fire and storage evidence

Application Scenario 1 — Seasonal Goods Miss the Sales Period

Scenario: Winter apparel insured for JPY 60 million is exported from Yokohama to Los Angeles under ICC(A).

A machinery casualty affecting the vessel and subsequent schedule changes delay delivery by twenty-five days.

The cargo itself suffers no breakage, wet damage, theft or other physical loss. However, the principal seasonal sales period has passed, requiring substantial discounting, and the shipper claims JPY 25 million for loss of market value.

Even if the machinery casualty is an event relevant to the insurance, the JPY 25 million claim is not for physical cargo damage caused by the machinery casualty. It results from late arrival and loss of the intended sales opportunity.

Clause 4.5 is structured to exclude loss caused by delay even where the delay itself results from an insured risk.

The existence of the machinery casualty therefore does not by itself convert the loss of market into an insured cargo loss. The cause of the particular loss being claimed must be identified.

Application Scenario 2 — Reefer Power Failure During a Delay

Scenario: Frozen seafood insured for JPY 85 million is shipped from Singapore to Tokyo.

Congestion at a transshipment port produces a seven-day delay. During that period, electrical supply to the reefer container is interrupted for approximately fourteen hours. Cargo temperature rises and approximately JPY 32 million of quality damage is identified on arrival.

It is insufficient to classify the entire claim under Clause 4.5 merely because a seven-day delay occurred.

The delay explains why the cargo remained at the transshipment port, but if the physical deterioration was caused by the fourteen-hour power interruption and resulting temperature rise, that separate temperature-control event requires its own coverage analysis.

If the cargo had already approached the end of its viable product life before the power interruption, Clauses 4.4 and 4.5 may also require consideration.

The applicable refrigerated-cargo wording, power records, raw reefer data, cargo-core temperature, pre-shipment quality and insured duration at the time of the event should be reviewed.

Application Scenario 3 — Warehouse Leakage During a Port Strike

Scenario: Electronic components insured for JPY 40 million are being imported to Tokyo and remain in a European port warehouse for twelve additional days because of a port strike.

During that waiting period, rain water enters through the warehouse roof and causes approximately JPY 18 million of wet damage.

Without the strike, the cargo might already have left the warehouse. That fact alone does not establish that the wet damage was “caused by delay.”

If the physical damage was actually caused by rain-water entry, the warehouse leakage, the applicable ICC, insured duration and, where relevant, the Strikes wording should be examined separately.

The key distinction is between delay creating the opportunity for the casualty to occur and the actual event that physically damaged the cargo.

Freight Forwarder Involvement

These Standard Five Classifications are not legal classifications established by statute or universally accepted by the industry. They are an analytical framework used in this series to organize the scope of a freight forwarder's contractual and operational involvement.

Standard Five Classifications	Typical Involvement	Connection with Delay	Limit to Confirm	Main Action
1. Simple Intermediary	Communicates with the shipping line, shipper and insurance side	Transmits delays and revised schedules	Should not determine delay liability or insurance recovery independently	Separate confirmed facts from matters still under investigation
2. Cargo Transportation Service Provider	Performs pickup, storage, delivery or temperature-controlled operations	Management of cargo during delay may become relevant to a separate casualty	Do not confuse Clause 4.5 with operational responsibility	Preserve storage, temperature and work records
3. NVOCC / House B/L Issuer	Issues a House B/L and acts as Contracting Carrier	May face transport liability for delay or a casualty during waiting	The cargo-policy delay exclusion and carrier liability are separate questions	Review the House B/L, terms and casualty stage
4. Door-to-Door Single Contractor	Contracts for the complete transport chain	Can integrate delays and storage information across multiple stages	A delay does not by itself establish liability for every resulting loss	Identify the cause of delay and subcontracting chain
5. Agent / Coordinator for Specific Operations	Coordinates alternative transport, storage or survey	May assist in limiting delay and preserving evidence	Should not exceed delegated authority by determining liability or coverage	Preserve instructions and local records

The Standard Five Classifications do not themselves determine delay liability or insurance coverage.

The actual analysis should also determine whether the freight forwarder acted as Contracting Carrier, Actual Carrier or merely as an arranger, and the scope of its contractual involvement in scheduling, storage, temperature management and alternative transport.

Documents to Review After a Delay or Casualty

Document	What to Confirm	Main Purpose	Caution
Policy and Certificate	ICC, endorsements and insured duration	Establish the applicable Clause 4.5 framework	Do not rely on the term ICC(A) alone
B/L or AWB	Carrier, route and transport terms	Identify transit and responsibility	Review actual route changes
Booking and schedule	Planned and actual dates	Measure the delay	Preserve schedule revisions
Delay notices	Reason for delay and communications	Investigate delay causation	Distinguish confirmed facts from assumptions
Terminal, storage and release records	Cargo location and waiting period	Review casualty stage and insured duration	Separate discovery date from occurrence date
Cargo photographs and inspection	Physical or quality damage	Distinguish cargo loss from pure delay loss	Record before and during unpacking
Temperature and reefer records	Power, settings and temperature abnormalities	Investigate separate refrigerated casualties	Preserve raw data
Fire, warehouse or police records	Fire, water entry or theft	Establish a separate casualty during delay	Obtain promptly
General average documents	Declaration, security and contribution	Analyse Clause 2	Keep separate from the delay claim
Commercial contracts and invoices	Penalties, market loss and additional expenses	Separate each head of claim	Do not combine commercial and cargo losses

Common Misunderstandings

Misunderstanding	Actual Practice	Practical Caution
Clause 4.5 applies only where cargo has no physical damage	Physical or quality deterioration may also raise Clause 4.5 where delay caused the damage.	Investigate causation rather than the type of damage alone.
If an insured risk caused the delay, the resulting delay loss is covered	Clause 4.5 expressly addresses delay caused by an insured risk.	Separate the cause of delay from the cause of the claimed loss.
Every casualty occurring during delay is excluded as delay loss	A separate fire, theft, leakage or machinery casualty may occur while the cargo is delayed.	Identify the direct cause of damage.
All cargo damage during a port strike is delay loss	Riot, fire or water damage may provide a separate causal event.	Review ordinary ICC and War or Strikes wording where relevant.
Any refrigerated deterioration during delay is Clause 4.5	Power interruption or refrigeration failure may constitute a separate casualty.	Review raw temperature and machinery data.
Demurrage is recoverable under the Clause 2 expense provision	Clause 2 concerns general average and salvage charges.	Do not confuse ordinary demurrage with general average.
Prolonged delay automatically terminates cargo insurance	Delay alone does not automatically end cover; the actual Transit Clause must be applied.	Review storage purpose, location and termination events.
If cargo insurance excludes delay, the carrier cannot be liable	Insurance exclusions and contractual carrier liability are separate questions.	Preserve third-party notice and limitation periods.
A shipping-line delay means the shipping line or freight forwarder must always pay penalties	Liability depends on the contract of carriage, applicable terms and cause of delay.	Separate cargo insurance from transport liability.
A general average contribution becomes excluded if the casualty also causes delay	Clause 4.5 expressly preserves expenses payable under Clause 2.	Analyse general average under Clause 2.

Decision Checklist

Stage of Review	Party to Confirm With	What to Confirm	Action If There Is a Problem
Delay notification	Shipping line, freight forwarder and warehouse	Cause, commencement and expected duration	Separate confirmed facts from assumptions
Cargo-condition review	Cargo owner, warehouse and delivery company	Physical or quality damage	Preserve photographs and inspection records
Clause 4.5 review	Insurer and insurance intermediary	Causal relationship between delay and each claimed loss	Separate each head of claim
Separate-casualty review	Carrier, warehouse and surveyor	Fire, theft, leakage or impact	Obtain casualty evidence promptly
Refrigerated cargo	Carrier, terminal and reefer operator	Power, machinery, temperature and duration of abnormality	Preserve raw data
General average	Insurer, shipping line and Average Adjuster	Expenses payable under Clause 2	Keep separate from delay loss
Insured duration	Insurer, warehouse and carrier	Cargo location, storage purpose and continuation of transit	Apply the Transit Clause
Demurrage or detention	Shipping line, shipper and customs broker	Reason, free time and contractual cost responsibility	Separate the charge from cargo insurance
Clause 18 review	Shipper, freight forwarder and insurer	Timing of action in circumstances within the Assured's control	Preserve the chronology of decisions and instructions
Third-party recovery	Contracting Carrier, Actual Carrier and warehouse	Liability, Claim Notice and limitation periods	Preserve rights without waiting for the insurance decision
Legal dispute	Insurer and maritime lawyer	Clause 4.5, proximate cause, Clause 2 and contractual liability	Organise chronology and evidence for specialist review

Loss Mitigation and Preservation of Third-Party Rights

Delay does not justify leaving cargo unmanaged until an insurance decision is made.

Reasonable action may include verifying the power and temperature status of refrigerated cargo, transferring wet cargo to a suitable dry environment, improving security where theft risk has increased, or arranging an appropriate alternative transport solution where practicable.

Clause 18 also makes reasonable despatch relevant in circumstances within the Assured's control.

Before moving, repairing or disposing of damaged cargo, evidence necessary to establish causation should be preserved where practicable, including photographs, temperature data, samples, warehouse records and casualty documents.

The application of Clause 4.5 is separate from liability of a Contracting Carrier, Actual Carrier, warehouse, terminal, customs broker or another party.

Claim Notice and limitation periods should therefore be protected without waiting for the insurer's final determination.

When to Involve an Insurer, Insurance Intermediary or Maritime Lawyer

Routine delay notification, cargo-condition review and policy enquiries should normally be handled first with the insurer or insurance intermediary. Specialist maritime legal advice should be considered where:

• it is disputed whether delay or a separate casualty was the direct cause of cargo damage;
• the relationship between an insured cause of delay and Clause 4.5 is disputed;
• Clauses 4.4 and 4.5 compete in a deterioration claim;
• the Clause 2 exception for general average or salvage is material;
• termination of insurance during prolonged waiting is disputed;
• reasonable despatch under Clause 18 is in issue;
• delay and a temperature-control casualty compete as causes of refrigerated cargo damage;
• substantial penalties, business interruption or market loss are claimed together with cargo damage;
• the cargo-policy delay exclusion and liability of the Contracting Carrier or Actual Carrier are disputed simultaneously;
• evidence must urgently be obtained from an overseas warehouse, terminal or shipping line; or
• insurance, third-party notice or litigation time limits are approaching.

Practical Points

The most important question under Clause 4.5 is not merely whether the cargo was delayed. It is what loss is being claimed and what caused that loss.

Where the cargo is physically sound and the claim consists of market decline, loss of sales opportunity or contractual penalties, the case presents a typical delay or economic-loss problem.

Physical or quality damage does not automatically remove Clause 4.5 from consideration. If passage of time caused the physical deterioration, the delay exclusion may remain directly relevant.

Conversely, where fire, theft, water entry, refrigeration failure or another separate casualty occurs during delay, the fact that the cargo was already delayed should not replace analysis of the actual damage-producing event.

Clause 4.5 also contains an express exception for expenses payable under Clause 2, while Clause 18 separately addresses reasonable despatch. A delay case should therefore not be decided by reference to one clause alone.

Summary

ICC 1/1/09 Clause 4.5 is an important general exclusion for loss, damage or expense caused by delay.

The exclusion is structured to apply even where the delay itself is caused by an insured risk. An insured casualty causing the delay does not therefore automatically make the commercial consequences of late arrival recoverable.

Clause 4.5 is also not confined to pure economic loss. Physical or quality deterioration may raise the exclusion where the passage of time or delayed transit caused that deterioration.

Where a separate fire, wetting, theft, refrigeration failure or other casualty causes cargo damage during the period of delay, the separate casualty should be analysed rather than treating every loss occurring during delay as delay loss.

Clause 4.5 expressly preserves expenses payable under Clause 2, and Clause 18 separately requires reasonable despatch in circumstances within the Assured's control.

In practice, the cause of delay, the particular head of claim, the direct cause of cargo damage, insured duration, general average or other expenses, inherent characteristics and third-party liability should be separated systematically, with loss mitigation, evidence preservation and protection of third-party rights proceeding in parallel.