Extension Clause for MAR Form — Coverage Adjustment for Piracy

EXTENSION CLAUSE FOR MAR FORM

The Extension Clause for MAR Form is a special clause used in marine cargo insurance based on the MAR Form. It modifies the risks covered under the Institute War Clauses (Cargo), specifically to clearly include coverage for loss or damage to cargo caused by piracy, including the consequences and attempts of such acts.

This clause does not simply provide blanket coverage for any and all piracy-related damage.

The core function is to remove the clause in Institute War Clauses (Cargo) Clause 1.2 that limits the causal relationship with war risks, explicitly adding physical damage to cargo caused by acts of piracy.

Therefore, understanding this clause requires separately reviewing the following three points:

• The change in insurance certificate structure resulting from the transition from S.G. Form to MAR Form
• The relationship between Institute War Clauses (Cargo) Clause 1.1 and Clause 1.2
• The differences relating to physical damage caused by piracy, delays, ransom payments, general average, and salvage charges

Moreover, even in cases classified as piracy, direct cargo damage, vessel detention, ransom, changes in voyage, prolonged delays, carrier liability, general average, and sanctions regulations represent distinct insurance and contractual issues.

The mere fact that the Extension Clause for MAR Form is attached does not mean all these matters are unconditionally insured.

Scope of This Article

Item	Content Covered in This Article	Content to Confirm Separately
Extension Clause for MAR Form	Mechanism to amend the limitation in Institute War Clauses (Cargo) Clause 1.2, adding coverage for cargo damage caused by piracy	Full text used in individual contracts, insurer-specific special clauses, and underwriting decisions
S.G. Form	Traditional structure listing customary marine perils in the old-style policy wording	History of the S.G. Policy, case law interpretations, and details of the former clauses
MAR Form	Mechanism combining a concise policy form with attached Institute Clauses to establish the scope of coverage	Individual insurance policies, open cover policies, certificates of insurance, and governing law
Institute War Clauses (Cargo)	War risks, capture, seizure, arrest, restraint or detainment, and abandoned weapons-related matters	Insurance period for war risks, cancellation notices, Listed Areas, and additional premiums
Institute Cargo Clauses	Relationship between standard cargo conditions and piracy, especially differences among ICC(A), ICC(B), and ICC(C)	Specific insured perils, exclusions, insurance period, and causes of loss
Institute Strikes Clauses	Distinction between strikes, terrorism, politically or ideologically motivated acts, and piracy	Purpose of the actors, organizational structure, political motives, and applicable clauses
Physical Damage from Piracy	Loss or damage to cargo caused by attack, detention, evasion actions, or attempted piracy	Proximate cause, proof of loss, survey, remnants, and insured amount
General Average and Salvage Charges	Costs to avoid or terminate piracy risk and the cargo side’s contribution	General Average declaration, applicable rules, adjustment, guarantees, and contributions
Ransom and Negotiation Expenses	Payments for release of vessel or cargo and their relationship with General Average	Legality of payments, sanctions regulations, Kidnap & Ransom insurance, hull insurance, and P&I
Freight Forwarder Practical Operations	Route verification, clause confirmation, collection of accident materials, and communication to relevant parties	Insurance payment decisions, legal advice, ransom negotiations, and General Average adjustment

Purpose of the Extension Clause for MAR Form

The purpose of the Extension Clause for MAR Form is to prevent the risks of piracy and certain captures, detentions, and related perils from being overly restricted to causal connection with war risks under Clause 1.1 in the insurance structure combining the MAR Form and the Institute War Clauses (Cargo).

Institute War Clauses (Cargo) Clause 1.1 defines war, civil war, revolution, rebellion, civil commotion, and hostile acts by belligerents as insured perils.

Clause 1.2 addresses capture, seizure, arrest, restraint or detainment, including their consequences or attempts.

However, under the standard wording, coverage for capture and related perils under Clause 1.2 is limited to those arising out of the war risks defined in Clause 1.1.

Piracy does not necessarily result from war, civil war, or hostile acts by belligerents.

If pirate attacks or detentions occur for commercial or private purposes, they may not meet the causal connection required with Clause 1.1.

Therefore, the Extension Clause for MAR Form removes the limitation in Clause 1.2 and explicitly includes loss or damage to the insured cargo caused by piracy, its consequences, and attempts thereof.

Typical Clause Structure

The typical structure of the Extension Clause for MAR Form consists of two stages.

Amendment Stage	Targeted Wording / Clause	Amendment Content	Practical Effect
Stage 1	Institute War Clauses (Cargo) Clause 1.2	Remove the limiting phrase “arising from risks covered under 1.1 above”	Changes the scope of capture, seizure, arrest, restraint or detainment so it is no longer restricted only to the war risks under Clause 1.1
Stage 2	Explicit Addition Regarding Acts of Piracy	Add coverage equivalent to “caused by piracy and the consequences thereof or any attempt thereat”	Clarifies coverage for loss or damage to cargo caused by acts of piracy, their consequences, and attempted piracy
Confirmation of Physical Damage	loss of or damage to the subject-matter insured	Focuses coverage on physical loss or damage to cargo	Does not extend coverage to mere voyage delays or loss of sales
Confirmation of General Average	Institute War Clauses (Cargo) Clause 2	Handles general average and salvage charges related to avoiding insured perils under separate clauses	When piracy becomes a covered peril, related general average contributions may become subject to consideration
Confirmation of Costs	Obligations to prevent loss, general average, salvage charges, and other cost clauses	Costs are assessed separately from physical damage	Storage fees, negotiation costs, redelivery expenses, or security charges are not automatically covered
Confirmation of Exclusions and Limitations	Delay, wilful misconduct, sanctions, insurance period, etc.	Other exclusion and limitation clauses are generally maintained	Determination of final coverage should not be based solely on the Extension Clause

This endorsement does not replace the entire Institute War Clauses (Cargo) with a new Clause.

It partially amends Clause 1.2 by modifying its restriction and adding piracy-related coverage.

Therefore, when reviewing the insurance policy, it is necessary to check not only the endorsement name but also which version of the Institute War Clauses (Cargo) it applies to, and whether there are any independent additions or deletions.

Why Adjustment Became Necessary for MAR Form Instead of S.G. Form

The S.G. Form was a policy format used in older British marine insurance, featuring a structure that broadly enumerated maritime perils in traditional terms within the policy wording.

This traditional enumeration of perils included piracy and risks corresponding to capture, seizure, arrest, restraint or detainment at sea.

In other words, under the S.G. Form, coverage was interpreted through a combination of the policy wording itself and the attached Institute Clauses.

In contrast, the MAR Form, used since 1982, positions the insurance policy itself as a concise contract confirmation document and delegates the specification of covered perils, exclusions, and insurance periods to the Institute Cargo Clauses, Institute War Clauses, Institute Strikes Clauses, and similar clauses.

As a result of this change, the traditional peril enumerations found in the S.G. Form wording can no longer be automatically relied on as a basis for coverage under the MAR Form.

Moreover, Institute War Clauses (Cargo) Clause 1.2 limits capture, seizure, arrest, restraint or detainment to those arising from the war risks defined in Clause 1.1.

Without adjustment, this could create discrepancies with the original intent to cover capture or detention by pirates unrelated directly to war.

The Extension Clause for MAR Form is an adjustment clause designed to address this structural gap created by the transition to the MAR Form.

Differences Between S.G. Form and MAR Form

Comparison Item	S.G. Form	MAR Form	Impact on Piracy Risk	Practical Points to Confirm
Basic Positioning	Traditional certificate style based on the old Lloyd’s S.G. Policy	A concise Marine Policy Form since 1982	The enumeration of risks in the old form’s text cannot be directly carried over to the MAR Form	Check the version of the policy form and accompanying clauses
Method of Describing Covered Risks	Extensive classical maritime perils are broadly listed in the policy text	Covered risks are primarily defined in separate attached Institute Clauses	The basis for piracy risk coverage must be specified within the attached clauses	Review ICC, War, Strikes, and special clauses as a set
Capture, Detention, etc.	Traditionally read as part of the classical perils enumeration	Follows the wording of Institute War Clauses (Cargo) Clause 1.2	Limited due to the causal relationship with Clause 1.1	Confirm any deletions or additions via Extension Clauses
Piracy Acts	Explicitly stated as a traditional peril in the policy text	Positioning varies depending on the combination of Institute Clauses used	Needs separate confirmation for ICC(A), ICC(B)/ICC(C), and War Clauses	Confirm which clause covers piracy under the contract
Interpretation of the Contract	Interpretation is layered through policy text, margin clauses, and additional clauses	Combines a concise policy with a structured set of Institute Clauses	The structure is organized but requires careful boundary confirmation between clauses	Do not rely on a single clause for judgment
Role of Amendment Clauses	Assumed the risk enumeration of the old text	Corrects differences in coverage intent with special clauses	Extension Clauses amend the limitations of Clause 1.2	Verify whether special provisions are actually attached
Caution Points	Heavily dependent on old expressions and case law interpretation	Coverage and exclusions are clearly separated by each clause	Check for any coverage gaps between separated clauses	Compare old and new conditions upon updates or changes

Differences from Standard Cargo Clauses, War Clauses, and Strikes Clauses

Clause / Condition	Basic Coverage Structure	Relation to Piracy	Main Damages to Check	Points to Note
ICC(A)	All Risks type broadly covering accidental physical loss or damage except exclusions	In versions excluding piracy from war risks like capture under war exclusions, physical damage caused by piracy may remain within the standard cargo clauses	Physical loss or damage to cargo	Delay, ransom, and consequential damages are not automatically covered
ICC(B)・ICC(C)	Named Perils type covering damage caused by enumerated risks	If piracy is not among the named perils, coverage basis may be insufficient under the standard clauses alone	Physical loss or damage caused by named perils	Also confirm causal links with other perils listed, such as fire or grounding during an attack
Institute War Clauses (Cargo)	Covers war, civil war, hostilities, capture, seizure, arrest, restraint or detainment, jettison, etc.	Under Standard Clause 1.2, capture, seizure, arrest, restraint or detainment is limited to events caused by war risks defined in Clause 1.1	Physical loss or damage to cargo caused by war risks	It is not certain that piracy qualifies as a war risk
Extension Clause for MAR Form	Removes the limitation in War Clauses Clause 1.2 and adds piracy coverage	Clearly covers cargo loss or damage caused by piracy, consequences thereof, and attempted acts	Physical damage caused by piracy risks	Other exclusions, insurance period, and sanction clauses remain applicable
Institute Strikes Clauses	Covers strikes, riots, civil commotions, terrorism, and acts motivated by political or ideological reasons	Application issues may arise regarding acts by armed groups with political or ideological motives	Physical damage caused by the insured perils under the clause	Do not mechanically equate piracy for private gain with terrorism
Kidnap and Ransom Insurance, etc.	Specializes in kidnap, detention, ransom negotiations, etc.	Mainly focuses on detention of crew, negotiations, ransom payments, and crisis management	Ransom, negotiation costs, crisis response expenses, etc.	Purpose and insured interest differ from marine cargo insurance Extension Clauses

Therefore, a simplistic view such as "piracy is always covered by a separate clause if ICC(A) applies" or "all piracy is covered if War Clauses apply" is not appropriate.

It is necessary to confirm the applicable version, standard cargo clauses, war clauses, special clauses, and cause of loss comprehensively.

Situations, Conditions, and Exclusions Concerning Application

Situation	Relation to Extension Clause	Main Application Conditions	Common Exclusions / Separate Confirmations Needed	Initial Response
Cargo damaged when ship was detained by pirates	Typical scenario for consideration	Causal link between pirate act and physical cargo damage	Simple voyage delay, loss of sales, foreign exchange losses	Secure accident notifications, voyage records, and damage documentation
Ship ran aground while avoiding a pirate attack	May be considered as consequence of attempted piracy	Reasonableness of avoidance maneuvers and proximate cause of grounding damage	Damage solely resulting from ordinary navigation errors	Check captain’s report, logbook, and position details
Cargo damaged during defense by armed guards	May be considered as consequence of attempted piracy	Continuity between attack, defensive actions, and cargo damage	Negligence solely on part of security company, contractual security fees	Preserve security reports, video footage, and damage photos
Ship detained but cargo remained undamaged	Extension Clause claim alone may be difficult without physical damage	Existence of covered damages or General Average contribution	Losses caused only by delay, loss of profits	Confirm General Average, salvage charges, and insurance period
Ransom paid and General Average declared	Relationship with War Clauses Clause 2 becomes an issue	Must be settled as General Average expense incurred to avoid covered risks	Misunderstanding that ransom is directly compensated as a fixed amount under Extension Clause	Verify GA Bond, Guarantee, and Adjustment
Cargo stolen by armed robbery within the port	Needs individual assessment if it falls under piracy for insurance	Location, manner of act, purpose, and classification under applicable law	Simple theft, warehouse theft, land-based robbery	Secure police report, port records, and location information
Route changed to avoid pirate risks	Consider separately as a deviation and insurance period issue	Final destination unchanged, and the safety measure is reasonable	Automatic compensation for delay damages or additional freight	Confirm reason for route change and requirement to notify
Attack by politically motivated armed group posing as pirates	Classification issues with War, Strikes, and Terrorism	Perpetrator, purpose, organization, location, and proximate cause	Deciding piracy solely by name	Check official reports, shipping line reports, and insurer’s decision
Ransom payment to sanctioned party becomes problematic	Sanctions clauses may take precedence even if Extension Clause applies	Recipient, related countries, applicable law, and sanction regulations	Assuming payment is possible because insurance exists	Immediately confirm with insurer and specialists

Potential Risks Covered

Risk	Specific Event	Relation to Extension Clause	Other Relevant Clauses and Systems to Confirm	Main Evidence
Seizure and Control by Pirates	Pirates hijack the vessel and take control of the cargo	Consider physical damage resulting from pirate acts and their consequences	War Clauses, Insurance Period, Total Loss and abandonment	Captain's report, location information, restraint records
Detention and Seizure	Free navigation and delivery of the vessel and cargo are obstructed	Issues arise regarding adjustments under Clause 1.2	Delay exemption, transport contract, termination of insurance	Voyage log, shipping line notifications, detention period
Attempted Piracy	Approach, gunfire, or boarding attempts occurred but were repelled	Verify if cargo damage resulted from the attempted act	Security contracts, carrier liability, standard cargo conditions	VDR, video footage, security reports
Damage Due to Avoidance Actions	Sharp maneuvers, speed increase, grounding, collision cause cargo damage	Confirm causal connection and sequence with attempted piracy	ICC(A) and others, Deviation, General Average	Voyage records, stowage records, survey reports
Theft or Disposal of Cargo by Pirates	Cargo is removed, destroyed, or dumped into the sea	Considered as direct loss of cargo	Theft clauses, total loss, salvage of remaining goods	Manifest, B/L, quantity records
Quality Deterioration During Detention	Reefer power stoppage, fuel shortage, prolonged stay causing cargo deterioration	Confirm causal relationship between pirate detention and physical damage	Delay exemption, temperature warranties, inherent defects	Temperature records, power supply records, inspection reports
General Average Contributions	Ransom, negotiation expenses, avoidance and salvage costs require sharing	When piracy risk is a covered peril, verify Clause 2	York-Antwerp Rules, transport contract, GA adjustment	GA Bond, guarantee, settlement statements
Salvage and Recovery Costs	Salvage, recovery, and re-shipment of vessel and cargo become necessary	Check salvage charges and cost clauses separately from Extension Clause	Salvage Charges, Sue and Labour, General Average	Salvage contracts, invoices, operation reports

Relationship Between General Average and the Extension Clause for MAR Form

In cases of piracy, substantial expenses may arise to release the vessel and cargo from a common peril, even if the cargo itself is undamaged.

Typical examples include ransom payments to release the vessel and cargo, costs of specialized negotiators, certain ongoing maintenance costs during detention, and expenses related to salvage or redelivery.

Whether these expenses qualify as General Average depends on the York-Antwerp Rules incorporated into the carriage contract, the governing law, the General Average Adjuster's judgment, and the specific facts involved.

When the Extension Clause for MAR Form is attached and piracy is treated as a covered risk, coverage for General Average and salvage charges under Institute War Clauses (Cargo) Clause 2 becomes relevant.

Item	Basic Positioning	Relationship with Extension Clause	Practical Points for Confirmation
Ransom	May be included as a General Average expenditure to release vessel and cargo from common peril	Whether piracy is a covered risk affects consideration under Clause 2	General Average adjustment, legality of payment, sanction regulations
Negotiator Fees	May be treated as costs directly necessary for ransom negotiation	Confirm if costs are to avoid the covered peril	Necessity and reasonableness of costs, claimant party
Costs During Detention	Not all costs automatically qualify as General Average	Not automatically covered by the Extension Clause alone	Applicable General Average rules and settlement details
Cargo Contribution	May be demanded based on cargo value for General Average contribution	Check coverage under War Clauses Clause 2	Insurance amount, General Average Guarantee, contribution value
GA Bond / Guarantee	May be required before delivery of cargo	Cargo insurer may issue the Guarantee	Bond document, insurer, adjuster, security deposit
Salvage Charges	Relevant as salvage costs to avoid or end piracy peril	Confirm salvage charges under Clause 2	Salvage contract, arbitration, overlap with General Average

The mere fact that ransom was paid does not mean marine cargo insurance will pay the same amount directly.

If a General Average declaration is made for the amount paid by the shipowner and a contribution is demanded from the cargo side, it is generally considered that the cargo insurer issues a General Average Guarantee and handles the contribution after final adjustment.

However, if payment involves sanctioned parties or prohibited recipients, statutory and sanction regulations prohibiting payment may become an issue separately from the coverage under the Clause.

Practical Implications on High-Risk Routes

The occurrence of piracy and armed robbery against vessels varies depending on the sea area and timing.

Therefore, routes previously considered dangerous maritime zones are not necessarily still assessed as such, and conversely, new regions may experience elevated risks.

In practice, decisions are not based solely on fixed sea area names. Instead, the shipping line’s routes, the latest risk information, the Joint War Committee’s Listed Areas, and the underwriting and notification conditions of insurance companies should be checked.

On routes with heightened piracy risks, the following issues become relevant:

• The attachment of Institute War Clauses (Cargo) and the Extension Clause for MAR Form
• The treatment of piracy risks under standard cargo terms
• Additional war risks premiums and advance notifications
• Impacts on the insurance period due to route changes or deviation
• Security measures such as armed guards, escorts, and citadels
• Ransom, general average, salvage charges, and sanctions regulations
• Resistance of reefer cargo and similar types to detention and delay

Particularly when route deviations significantly extend the voyage duration, it is necessary to separately confirm not only piracy risks but also delay, fuel consumption, temperature control, quality preservation, delivery deadlines, and insurance coverage periods.

Decision Flow for Applying the System

1. Check the Policy Form
   Verify whether it is the MAR Form, the old S.G. Form, a comprehensive open cover, or an individual policy.
2. Confirm the Usual Cargo Clauses
   Identify ICC(A), ICC(B), ICC(C), or other conditions and their respective editions.
3. Check the War Risks Clause
   Confirm the inclusion and edition of the Institute War Clauses (Cargo).
4. Verify the Extension Clause
   Check if the Extension Clause for MAR Form or an equivalent insurer-specific endorsement is attached.
5. Identify the Nature of the Incident
   Distinguish between piracy, armed robbery, terrorism, rebellion, seizure by state authority, etc.
6. Confirm the Types of Damage
   Separate cargo physical damage, delay, costs, ransom, general average, salvage charges, and others.
7. Assess Causality
   Analyze the proximate cause related to piracy acts, their results or attempts, and the cargo loss.
8. Confirm the Insurance Period
   Check war risks coverage during the marine transit period, loading/unloading, detention, and retransportation.
9. Verify Sanctions and Legal Regulations
   Review regulations concerning involved parties, payees, trade routes, and ransom payments.
10. Notify About the Incident and Preserve Evidence
    Contact the insurer, shipping line, surveyor, general average adjuster, etc., and preserve records.

Example 1｜When the Vessel Is Detained in the Gulf of Aden and Ransom Is Paid

During the voyage of a vessel from Singapore to Rotterdam, the ship was hijacked by pirates, and the vessel, crew, and cargo were detained for approximately three months.

The shipowner paid the ransom through a professional negotiator, resulting in the release of the vessel and cargo.

There was no significant physical damage to the cargo itself; however, the shipowner declared General Average for the ransom, negotiation costs, and other expenses, seeking contribution from the cargo owners.

In this case, the Extension Clause for MAR Form is important in that it explicitly includes piracy as a covered peril under the Institute War Clauses (Cargo).

Nevertheless, since there was no physical damage to the cargo, the situation is not one where the ransom is paid directly under the physical damage coverage of the Extension Clause.

From the cargo perspective, it is necessary to confirm the Institute War Clauses (Cargo) Clause 2, the General Average rules incorporated into the carriage contract, the GA Adjustment, GA Bond, and the insurance company’s Guarantee.

In addition, sanction regulations related to the ransom payment recipient should be verified separately.

Example 2｜Vessel Grounding Resulting from Anti-Piracy Maneuvers

A small high-speed boat approached a vessel en route from Southeast Asia to Japan, and the crew assessed it as an attempted boarding by pirates.

The vessel undertook rapid evasive maneuvers but in doing so approached a shallow area and ran aground, causing significant impact damage to machinery cargo inside the containers.

In this case, the direct physical cause was grounding or impact, but the underlying cause was the attempted piracy.

The Extension Clause for MAR Form explicitly provides for coverage of consequences and attempts related to piracy.

Therefore, it is necessary to confirm whether the approaching act qualifies as piracy or an attempt for insurance purposes, whether the evasive action was reasonable, and whether there is a continuous causal link between the attempted piracy and the grounding damage.

The captain’s report, VDR data, AIS, radar images, alarm logs, ship’s log, container stowage records, and Survey Report are all crucial evidence.

Also, if the grounding itself would be covered under standard cargo clauses, the insurance company will determine which clause should serve as the primary basis for claim settlement.

Example 3｜Cargo Damage Sustained When Armed Security Personnel Repelled Pirates

An armed group approached the vessel while it was transiting a high-risk sea area and attempted to board by firing shots.

The armed security personnel on board returned fire, causing the pirates to abandon their boarding attempt.

However, gunfire damaged containers on the deck, and extinguishing and water spraying operations caused water damage to the cargo inside.

In this case, although the vessel was not seized, there was an attempted act of piracy, and physical damage to the cargo resulted from the defensive action.

The wording related to attempts and consequences in the Extension Clause should be reviewed.

Separately, matters such as the security company’s negligence, conditions for weapons use, carrier liability, standard cargo clauses, and subrogation potential should be addressed.

It is necessary to secure the security company’s Incident Report, the master’s report, evidence of gunshot marks, firefighting records, container numbers, seal conditions, photographs, and cargo survey results.

Example 4 | Cargo Stolen by Armed Robbers within a Port

While the vessel was at anchor in a foreign port, an armed group boarded the ship and took some high-value cargo on board.

The parties concerned described the incident as a "piracy loss," but since the location was within territorial waters and the manner of the act closely resembled armed robbery within the port, it does not necessarily qualify as piracy under the Extension Clause.

In this case, it cannot be definitively concluded that the event falls under piracy as defined by the Extension Clause based solely on the common name.

The place of occurrence, whether the act was between vessels, the perpetrators’ intent, the definition of piracy under the governing law, and the relationship with theft coverage under standard cargo conditions as well as War and Strikes Clauses should be confirmed.

Even if it does not meet the Extension Clause criteria, the loss may be covered as a theft loss under ICC(A) or other standard cargo conditions.

It is necessary to verify the captain’s report, port authority and police reports, anchor location, CCTV footage, cargo manifest, and the quantity stolen.

Scope of Freight Forwarder Involvement

The scope of a freight forwarder’s involvement with piracy risks and the Extension Clause for MAR Form varies depending on their contracting position, issuance of House B/L, Door-to-Door contracts, and individually commissioned tasks.

Standard Classification	Typical Position	Possible Measures Regarding Piracy Risks	Scope to Note
1. Simple Intermediary 単純取次	Relays information from shipping lines, insurance agents, etc. to the cargo owner	Provides guidance on dangerous routes, route changes, and the need to confirm insurance	Does not guarantee coverage of piracy risks or insurance claim payments
2. Cargo Transportation Service Provider 貨物利用運送事業者	Provides cargo transportation services in their own name	Organizes actual route, vessel name, transshipment ports, cargo location, and accident segment	Do not confuse carrier liability with marine cargo insurance coverage
3. NVOCC / House B/L Issuer	Issues House B/L and is involved as Contracting Carrier	Confirms House B/L, Master B/L, shipping route, unloading, and delivery status	The route indicated on the B/L does not solely determine insurance coverage for piracy risks
4. Door-to-Door Single Contractor Door-to-Door一貫契約者	Undertakes integrated transport from pickup to final delivery	Coordinates changes in maritime segment along with subsequent storage and re-transport as one unit	Door-to-Door transport contracts and war risks insurance are separate contracts
5. Agent/Coordinator for Specific Operations 特定業務の代理・調整者	Coordinates surveys, accident documentation, re-transport, General Average documents, etc. on a case-by-case basis	Within delegated authority, coordinates collection of documents, accident notification, and submission of GA Bonds, etc.	Does not independently negotiate ransom, decide sanctions, or determine insurance claim payments

Concepts such as Contracting Carrier or Actual Carrier refer to positions relating to transport contracts or legal responsibility. These do not replace the Standard Five Classifications used to organize freight forwarders’ involvement.

Furthermore, performing or arranging actual tasks such as route confirmation, security arrangements, surveys, storage, re-transport, collection of General Average documents, or accident notifications does not create a sixth independent classification. These tasks are organized within one of the Standard Five Classifications depending on the freight forwarder’s contractual position, for whose benefit, and to what extent the services are undertaken.

It is not possible to determine coverage of piracy risks, route selection authority, ransom payment, General Average contribution, carrier liability, or insurance claim eligibility solely based on these five classifications for individual cases.

Common Misunderstandings

Common Misunderstandings	Actual Considerations	Practical Measures
All Losses Related to Piracy Are Covered under All Risks	Even if physical damage from piracy may be covered under ICC(A), delays, ransom payments, and indirect losses are separate issues.	Check standard terms, War Clauses, Extension Clause, and expenses provisions.
War Clauses Always Cover Piracy	Standard Clause 1.2 limits coverage to cases causally linked with war risks under Clause 1.1.	Confirm the presence of Extension Clause or equivalent endorsements.
The Extension Clause Replaces All War Clauses	It partially amends Clause 1.2’s limitations by adding piracy but does not replace the entire War Clauses.	Read together with the main War Clauses.
All Delay Losses Are Recoverable if Held by Pirates	Losses caused solely by delay may be excluded, so it is necessary to distinguish from physical damage.	Separate the cause of loss from the loss items.
Ransom Is Fully Paid Directly under the Extension Clause	Ransom payments may be handled under General Average, Kidnap & Ransom insurance, or vessel insurance.	Confirm General Average adjustment and applicable insurance coverage.
Pirate Capture Automatically Constitutes General Average	Requires conditions of extraordinary sacrifice or expenses for the common safety and proper adjustment.	Check General Average declaration, applicable rules, and adjustments.
All Armed Sea Crimes Are Insured as Piracy	Distinguish from robberies inside ports, terrorism, rebellion, and capture by state authorities.	Confirm location, perpetrators, intent, and governing law.
Risks Listed under S.G. Form Remain by Default after Switching to MAR Form	MAR Form delegates covered risks to attached Institute Clauses.	Check accompanying Clauses and corrective endorsements as a set.
If the Freight Forwarder Knows of Risky Routes, Insurance Automatically Changes	Transport information management and notification or changes to insurers are separate procedures.	Advise the cargo owner to confirm with the insurance company and insurance agent.
If Insurance Is Attached, Payments to Sanctioned Parties Are Also Possible	Prohibitions on payments under sanctions and laws apply independently from the insurance contract.	Consult with the insurance company and experts before making payments.

Practical Judgment Checklist

Checkpoint	Counterpart to Confirm	Items to Check	Actions if Issues Arise
At Insurance Contract or Renewal	Shipper, Insurance Agent, Insurance Company	Version of MAR Form, Standard Cargo Clauses, War & Strikes Clauses	Confirm differences between old and new conditions and coverage gaps
When Confirming Extension Clauses	Insurance Agent, Insurance Company	Whether Extension Clause for MAR Form or equivalent special clauses apply	If not attached, inquire about treatment of piracy risks
At Booking and Route Decision	Shipping Line, NVOCC, Shipper	Vessel name, route, transshipment ports, possibility of passing through dangerous waters	Confirm notifications, additional premiums, and route restrictions
Upon Receiving Route Change Notice	Shipping Line, Freight Forwarder, Shipper	Reasons for piracy avoidance, war risks avoidance, or deviation	Confirm insurance period and notification requirements
When an Attack or Attempt Occurs	Shipping Line, Master, Insurance Company, Surveyor	Date/time, location, manner of attack, damage, avoidance actions	Notify immediately and preserve voyage records and footage
Upon Discovering Cargo Damage	Shipper, Warehouse, Surveyor, Insurance Company	Damage condition, time of discovery, causal link to piracy act	Ensure survey, photographs, quantity and temperature records
When Vessel Is Detained	Shipping Line, P&I Club, Insurance Company, Shipper	Detention status, cargo condition, insurance period, communication system	Avoid independent negotiations; switch to specialized crisis management
At Declaration of General Average	General Average Adjuster, Insurance Company, Shipping Line	GA Bond, Guarantee, collateral, applicable rules	Submit required documents before cargo release
When Ransom or Expenses Occur	Ship Owner's Side, Insurance Company, Specialists	Nature of expenses, general average, sanctions regulations, claimant identity	Separate direct losses under Extension Clause from others
At Cargo Release and Reshipment	Shipping Line, Local Agent, Insurance Company, Shipper	Cargo condition, reshipment, storage, termination of insurance, destination	Confirm continuation of cover and additional insurance in writing

Documents to Verify in Case of an Incident

Document	Information to Confirm	Main Source	Purpose in Practical Use
Insurance Policy / Certificate	MAR Form, insured party, voyage, insurance period	Shipper, insurance agent, insurance company	Identify the basic contract terms
Institute Clauses / Special Clauses	War Risks, Strikes, Extension Clause, Exclusions	Insurance company, insurance agent	Confirm basis for claims and exclusions
B/L / Booking	Vessel name, route, loading port, discharge port, transport terms	Shipping line, NVOCC, freight forwarder	Verify transport segments and route changes
Captain / Shipping Line Incident Report	Date/time of attack, location, perpetrators, response	Shipping line, captain, P&I Club	Substantiate occurrence of piracy or attempted piracy
AIS / VDR / Logbook	Vessel position, course, evasive maneuvers, detention period	Shipping line, shipowner, relevant authorities	Confirm causal link between incident and damage
Cargo Photos / Survey Report	Physical damage, packaging, residual value, discovery timing	Surveyor, warehouse, shipper	Substantiate insured cargo damage amount
Temperature / Power Supply Records	Temperature deviations and reefer shutdown during detention	Shipping line, CY, data logger	Confirm causal relation to quality deterioration
GA Bond / Guarantee / Adjustment	Basis for General Average, contribution amount, guarantee details	General Average Adjuster, shipping line, insurance company	Manage cargo release and calls for contributions
Cost Details / Invoices	Expenses for storage, salvage charges, transshipment, negotiations	Shipping line, agents, specialized service providers	Differentiate physical damage, General Average, and other costs
Notification Records to Insurer	Notification date/time, content, instructions	Shipper, insurance agent, freight forwarder	Confirm notification obligations and incident handling history

Practical Points

The core operational point of the Extension Clause for MAR Form is the removal of the causation limitation with war risks stated in Institute War Clauses (Cargo) Clause 1.2, explicitly adding coverage for loss or damage to cargo caused by piracy, its consequences, and attempts thereof.

The need for this clause arises because the traditional list of risks specified in the main text of S.G. Form policies has been relocated in the MAR Form to attached Institute Clauses, representing a structural change.

However, the Extension Clause does not constitute a comprehensive clause covering all economic losses related to piracy.

It is necessary to separately verify coverage for physical cargo damage, delay damages, ransom payments, general average contributions, salvage charges, re-shipment costs, storage charges, and carrier liabilities.

In particular, if the vessel is detained due to piracy but the cargo itself remains intact, primary concerns may be focused on general average contributions, salvage charges, insurance period, and delay exemptions rather than direct cargo damage.

Conversely, if the cargo is damaged by attacks, evasive maneuvers, gunfire, firefighting, or temperature control failures during detention, it is necessary to establish the causal relationship between piracy or attempted piracy and the physical damage.

For high-risk trade routes, it is standard practice to confirm the status of the MAR Form, Institute Cargo Clauses, Institute War Clauses, Institute Strikes Clauses, and Extension Clause for MAR Form attachments before shipment, rather than reviewing clauses after an incident occurs.

Summary

The Extension Clause for MAR Form is a special clause that amends the coverage structure of the Institute War Clauses (Cargo) in marine cargo insurance policies based on the MAR Form.

Under the standard Institute War Clauses (Cargo) Clause 1.2, capture, seizure, arrest, restraint or detainment is limited to those arising from war risks as defined in Clause 1.1.

The Extension Clause removes this limitation and explicitly includes loss or damage to the insured cargo caused by acts of piracy, their consequences, and attempts thereof.

This amendment became necessary because the traditional enumeration of risks provided in the old S.G. Form’s policy wording was replaced after 1982 by entrusting those risks to attached Institute Clauses within the MAR Form structure.

The Extension Clause does not replace the entire Institute War Clauses (Cargo) but serves as a partial amendment focusing on Clause 1.2.

Therefore, the insurance period, exclusions, notice obligations, sanctions provisions, and other terms of the war risks clause need to be separately confirmed.

Furthermore, the pirate risks under ICC(A), the enumerated perils under ICC(B) and ICC(C), and terrorism or politically motivated acts covered by the Institute Strikes Clauses each have distinct coverage structures.

It is essential not to determine the applicable clause solely by the use of the term “piracy,” but to verify the perpetrator, purpose, location, accident circumstances, and cause of damage.

The main focus of the Extension Clause is physical loss or damage to cargo; delays in voyage, loss of profit, ransom, negotiation costs, storage charges, and similar expenses are not directly covered in full.

In cases where general average is declared for ransom or related expenses, refer to Institute War Clauses (Cargo) Clause 2, the relevant carriage contract, general average rules, and the GA Adjustment.

If general average contributions are claimed from the cargo interest, handling of the GA Bond, insurer guarantees, security deposits, and final settlements may be required.

When voyage routes are altered to avoid pirate risks, it is necessary to check not only the Extension Clause but also deviation provisions, insurance period, war risks, additional premiums, and consequential delay damages.

In the event of an incident, it is crucial to promptly secure the insurance policy, supplementary clauses, B/L, voyage records, shipping line reports, position information, cargo damage reports, expense documents, and general average documentation.

The most important point is to avoid assuming coverage based solely on terms like “All Risks” or the mere existence of War Clauses. Instead, confirm before shipment how piracy risks are covered within the MAR Form combined with each relevant Institute Clause.

The applicability of the Extension Clause for MAR Form, piracy acts, general average, ransom, and sanctions regulations varies depending on the insurance policy, applicable clauses, governing law, carriage contract, and individual incident circumstances. For actual cases, please consult the handling insurance company or insurance agent.