Open-Yard Storage Terms and Conditions

What Is the Open-Yard Storage Clause?

The Open-Yard Storage Clause is a special clause designed to adjust the scope of coverage, notification requirements, storage periods, protective measures, and additional premiums under marine cargo insurance when insured cargo is stored outdoors at places such as discharge ports, bonded areas, CFS, warehouse operators’ yards, or outdoor storage yards.

“Open-yard storage” refers to cargo placed not inside a warehouse sufficiently protected by roofs or walls, but outdoors where it is exposed to external environmental factors such as rainwater, direct sunlight, wind, dust, sea breeze, temperature fluctuations, third-party contact, theft, or handling accidents.

The Open-Yard Storage Clause does not uniformly prohibit outdoor storage. Because the risks increase compared to indoor warehouse storage, it is used to limit covered risks during open-yard storage, establish certain waterproofing, rust prevention, or security conditions, and require prior notification and additional premiums to maintain coverage.

In practice, it is important to distinguish between cargo that remains packed inside sealed containers and is stored in an outdoor yard, and cargo that has been devanned and physically placed outdoors.

It is also necessary to confirm not only the scope of coverage during open-yard storage but whether such storage is included within the Institute Cargo Clauses’ concept of the ordinary course of transit, or whether the insurance period has already ended.

The coverage under the name Open-Yard Storage Clause is not uniformly determined. Actual evaluations depend on the insurance policy, applicable Institute Cargo Clauses, individual clauses, notification records, storage purpose, storage duration, cargo condition, and cause of loss.

Scope Covered in This Article

Item	Content Covered in This Article	Contents to Verify Separately
Open-Yard Storage Clause	Basic insurance treatment when cargo is stacked outdoors on yards or similar locations	Individual insurance policies, clause wording, additional premiums, and insurer approval conditions
Outdoor Storage of Closed Containers	Distinction when cargo is protected inside sealed containers but stored outdoors	Container integrity, seals, condensation, temperature and humidity, and storage purpose
Outdoor Storage After Devan	Cargo removed from containers, wooden crates, or unpackaged cargo stored outdoors	Devan date and time, storage location, waterproofing, rust prevention, protection, and storage duration
ICC(A), ICC(B), ICC(C)	Changes in coverage scope when the Open-Yard Storage Clause is added to standard conditions	Actual enumerated perils, exclusions, special conditions, and individual underwriting agreements
Ordinary Course of Transit	Whether outdoor storage is included in the ordinary course of transit under ICC 2009 Clause 8.1	Cargo owner’s choice, storage purpose, waiting for delivery, distribution/sorting, and actual logistics process
End of Insurance Period	Unloading at final warehouse, storage selected outside transport, container storage use, and 60-day rule	Applicable ICC version, insurance period extension clauses, and individual contracts
Held Covered	Concept of confirming continuous coverage for unplanned open-yard storage subject to notification, additional premium, and condition changes	Existence of Held Covered clause, notification timing, timing of incident, and insurer approval
Damage During Storage	Damage from rain exposure, rust, contamination, theft, contact, overturning, and packaging deterioration	Proximate cause, exclusions, inherent cargo nature, ordinary wear and tear, and damage assessment
Warehouse / Yard Operator Liability	Storage contract, management obligations, negligence, and relationship with marine cargo insurance	Governing law, warehouse receipt terms, liability limits, notification deadlines, and compensation amounts
Subrogation and Claims Against Third Parties	Basic framework when the insurer exercises rights against third parties after paying claims	Claim targets, cause of liability, evidence, statute of limitations, and settlement authority
Freight Forwarder Involvement	Scope of involvement in verifying storage methods, explaining to cargo owners, insurance notification, and evidence preservation	Individual contracts, freight forwarder liability, and liability as a carrier

Why Open-Yard Storage Becomes an Issue

Marine cargo insurance is underwritten based on the declared transportation methods, routes, cargo, packaging, and usual storage conditions.

The external environment and management risks that cargo faces differ significantly between indoor warehouse storage and open-yard storage.

Risk	Common Issues with Open-Yard Storage	Marine Cargo Insurance Considerations	Main Reference Materials
Rainwater and seawater spray	Water damage, rust, deterioration of packaging materials, deformation of wooden crates	Check whether damage from moisture during open-yard storage is covered and confirm any policy restrictions.	Weather records, storage photos, packaging specifications, waterproofing records
Direct sunlight and high temperature	Discoloration, deterioration, resin component degradation, internal temperature rise	Distinguish between external accident and cargo's inherent nature or normal temperature effects.	Temperature records, cargo specifications, storage period, manufacturer’s comments
Dust, sand, soot, oil	Exterior contamination, intrusion of foreign substances into machinery, reduced resale value	Confirm whether physical damage or just minor cosmetic soiling is involved.	Yard environment, photos, cleaning quotations, survey reports
Wind, rain, typhoons	Tarp damage, cargo tipping over, cargo shifting, contact with flying debris	Verify the relationship between weather risks and adequacy of protection and fastening.	Weather records, photos of fastening, work records, incident reports
Handling contact	Forklift contact, collisions with other cargo, damage to outer packaging	Separate marine cargo insurance coverage from yard and stevedoring operator liability.	CCTV, work records, incident reports, in-gate and gate-out records
Theft and vandalism	Parts theft, pilferage, packaging opening, loss of accessories	Confirm security conditions, locking, access control, and inventory checks.	Security logs, inventory records, CCTV footage, police reports
Long-term stay	Rust, packaging deterioration, quality degradation, and increased storage costs	Check exclusions for delay, confirm ordinary course of transit, and insurance period expiration.	Original schedule, delay reasons, customs clearance records, storage instructions
Ground-level effects	Flooding, mud water, moisture absorption from the ground, pallet sinking	Confirm cargo elevation, drainage, and ground conditions.	Yard layout plan, ground photos, rainfall records, pallet specifications

Storage Conditions Likely to be Classified as Open-Yard Storage

Whether storage qualifies as open-yard storage is not determined solely by whether the cargo is outdoors.

It is important to check the cargo’s exposure status, containers, packaging, presence of roofs or walls, storage purpose, storage duration, and degree of protection from external environments.

Storage Condition	Open-Yard Storage Classification	Main Points to Confirm	Practical Response
Cargo stored directly in outdoor yards after devanning	Likely to be classified as open-yard storage.	Rainwater, sunlight, dust, handling contact, and theft	Notify the insurance company and confirm protection measures and storage duration.
Wooden crates, unpacked cargo, or machinery stored outdoors	Likely to be classified as open-yard storage.	Water resistance and rust prevention of wooden crates, supports, and tarpaulins	Conduct regular inspections and keep photographic records.
Areas with roofs but without walls	Needs individual confirmation.	Driving rain, wind, dust, third-party contact	Provide photographic evidence of actual protection conditions and confirm acceptance with insurer.
Storage in outdoor yards within sealed containers	Often distinguished from open-yard storage after devanning.	Container integrity, doors, seals, holes, flooring, and condensation	Confirm that the container is not used merely as a storage facility.
Storage outdoors in open-top containers	Needs confirmation as exposed storage.	Top tarpaulins, securing, drainage, and rainwater intrusion	Do not treat the same as sealed containers.
Storage outdoors on flat racks	Likely to be classified as open-yard or exposed storage.	Cargo exposure, support, securing, waterproofing, and rust prevention	Individually confirm protection measures for the cargo itself.
Outdoor storage covered only by waterproof sheets	The use of sheets alone does not negate open-yard classification.	Sheet strength, securing, tears, ventilation, and drainage	Keep inspection records during the storage period.
Temporary outdoor waiting for handling	May be considered short-term waiting within the ordinary course of transit.	Purpose of waiting, duration, continuity with transport process	Differentiate between mere storage and transportation-required temporary waiting.

Outdoor Storage of Sealed Containers and Open-Yard Storage after Devanning

Item	Outdoor Storage of Sealed Containers	Outdoor Storage of Cargo after Devanning	Practical Points for Confirmation
Cargo Protection Condition	The container’s exterior panels provide a certain degree of protection against rainwater, dust, and sunlight.	The cargo or packaging is more directly exposed to external environmental factors.	Check the actual container, packaging, and degree of exposure.
Relation to Open-Yard Storage Clause	Simply being outdoors may not always be considered the same as open-yard storage after devanning.	Frequently a subject of concern under the Open-Yard Storage Clause.	Confirm the definitions in the specific policy wording.
Main Types of Damage	Condensation, internal temperature rise, container damage, water intrusion, floor contamination	Rain exposure, rust, contamination, theft, contact damage, packaging deterioration	Investigate the damage occurrence mechanisms separately.
Ordinary Course of Transit	May be within the transit process as a temporary waiting period for delivery or may involve using the container as a long-term storage facility.	Depending on the purpose for choosing outdoor storage, it may fall outside the ordinary course of transit.	Confirm the party who selected the storage and the intended purpose.
Primary Documentation	Container number, seals, external condition, doors, internal photos, temperature and humidity records	Devanning records, photos of storage location, protective measures, pallets, in-gate and gate-out records	Chronologically document the points at which conditions changed.
Insurance Response	Confirm damage during container storage and continuation of the insurance period.	Check open-yard storage clause applicability, notifications, additional premiums, and protective conditions.	Do not assume coverage continuation solely because it is a sealed container.

ICC 2009 Clause 8.1.3 stipulates that if the insured or their employees choose to use the transport equipment or container for storage outside the ordinary course of transit, the insurance coverage ends.

Therefore, merely the fact that it is a sealed container does not automatically mean the insurance period continues. It is necessary to confirm whether the container is temporarily waiting for delivery or if the cargo owner has chosen to use the container as a long-term storage facility.

Differences Between the Open-Yard Storage Clause and the Underdeck or On-deck Clause

Item	Open-Yard Storage Clause	Underdeck or On-deck Clause	Points to Confirm in Practice
Applicable Location	Unloading port, bonded areas, CFS, warehouse, or yard and other land storage locations	Inside the vessel’s cargo hold or on the deck	Confirm the location and transport stage at the time of the incident.
Applicable Period	Storage period after unloading or during land transportation	Period during sea transport when cargo is stowed on board the vessel	Distinguish between before and after devanning, before and after loading.
Main Risks Involved	Rain, sunlight, dust, theft, cargo handling contact, prolonged storage	Waves, seawater, loss overboard, cargo shifting, vessel motion	Do not confuse simply because both involve exposure to external environments.
Primary Documentation	Storage photos, yard records, devanning records, weather data	B/L, booking confirmation, stowage plan, lashing records	Secure documentation related to the cause of the incident.
Main Insurance Issues	Coverage limitations, insurance period, prior notice, Held Covered	Declaration of deck stowage, stowage discretion, lashing, B/L notation	Confirm the applicable clause name and the actual wording.

Relationship with ICC(A), ICC(B), and ICC(C)

The Open-Yard Storage Clause may be added to basic conditions such as ICC(A), ICC(B), or ICC(C) to modify or limit the coverage during open-yard storage.

It is important to note that simply because coverage is under ICC(A), it does not necessarily mean that the usual coverage will be maintained during open-yard storage.

Basic Conditions	Main Characteristics	Points of Caution When Open-Yard Storage Clause Is Added	Practical Points to Confirm
ICC(A)	Broad coverage excluding specific deductibles	Special conditions limiting risks during open-yard storage may take precedence.	Confirm treatment of rain damage, rust, theft, and contamination.
ICC(B)	Coverage focused on certain named perils	Whether damages during open-yard storage fall under named perils is an issue.	Match cause of loss with named perils in Clause 1.
ICC(C)	Limited coverage mainly for fire, explosion, collision, sinking, general average, etc.	Rain damage, rust, dust, and ordinary theft are likely excluded.	Confirm that coverage during open-yard storage is not extremely limited in substance.
Specific Peril Limited Conditions	May cover only specific perils such as fire, lightning, vehicle collision	Frequent risks during outdoor storage may not be included.	Review each listed peril in the clause carefully.
Coverage with Special Conditions	Conditions based on notification, waterproofing, rust prevention, security, or storage period	Legal effects of non-compliance with conditions may be problematic.	Check warranty, condition precedent clause, and governing law.

If the basic policy wording and the Open-Yard Storage Clause conflict, usually the wording of the separately added special conditions will take precedence.

Do not judge solely by the presence of “ICC(A)” on the front of the insurance policy; endorsements, special clauses, warranties, and approvals from the insurance company should be verified.

End of Ordinary Course of Transit and Insurance Period

For open-yard storage, it is necessary to confirm not only the scope of covered risks but also whether the marine cargo insurance period continues in the first place.

According to ICC 2009 Clause 8.1, insurance starts from the moment the cargo is first moved for the commencement of transit and continues during the ordinary course of transit.

The insurance ends at whichever of the following events occurs first.

Cause of Termination	Basic Description	Relation to Open-Yard Storage	Documents for Verification
Clause 8.1.1	Completion of unloading from the transport means at the final warehouse or storage place stipulated in the insurance contract	If the delivery yard is the final storage location, the insurance may end at this point.	Insurance policy, delivery instructions, receipt record
Clause 8.1.2	Completion of unloading at another warehouse or storage place selected by the insured for storage, distribution, or delivery outside the ordinary course of transit	Becomes an issue when the cargo owner chooses an open yard for stockholding or awaiting sale.	Storage instructions, emails, inventory plan, delivery plan
Clause 8.1.3	The insured’s choice to use the transport means or container for storage outside the ordinary course of transit	Becomes an issue when containers are used as long-term storage facilities rather than awaiting delivery.	Storage purpose, usage period, planned delivery, instruction records
Clause 8.1.4	Sixty days after completion of discharge from the vessel at the final port of discharge	The 60 days are not an unconditional guaranteed storage period; the insurance may end earlier if other termination events arise.	Vessel discharge date, terminal records, insurance policy

The 60-day rule does not mean all storage conditions are automatically covered unconditionally for 60 days after discharge.

If unloading to the final warehouse, choice of storage outside the ordinary course of transit, or container usage for storage occurs first, the insurance may end before the 60 days elapse.

On the other hand, ICC 2009 Clause 8.3 provides that insurance continues during delays, route deviations, forced unloading, re-shipment, and transshipment beyond the insured’s control, in accordance with the termination events in Clause 8.1 and Clause 9.

Therefore, temporary outdoor waiting due to warehouse congestion, customs inspection, or administrative hold does not automatically result in insurance termination.

Whether such storage is a temporary waiting related to the ordinary transit process or a choice by the cargo owner for stockholding, distribution, or awaiting sale should be determined based on the specific facts.

Key Points for Determining the Ordinary Course of Transit

Assessment Factor	Conditions That Could Be Within the Ordinary Course of Transit	Conditions That Could Be Outside the Ordinary Course of Transit	Reference Documents
Purpose of Storage	Waiting necessary to continue transit, such as customs clearance, transshipment, or waiting for delivery vehicle	Waiting for sale, inventory adjustment, allocation, sorting, or long-term storage	Storage instructions, logistics plan, sales plan
Party Deciding Storage	The carrier or administrative reasons cause the insured party to be unable to avoid storage	The insured party or their employees chose storage for commercial purposes	Emails, work instructions, official notices
Storage Period	Reasonably short period for transit with ongoing delivery arrangements	No scheduled delivery, indefinite or extended period	Delivery booking, storage period, extension records
Cargo Condition	Maintained in a condition ready for immediate transfer to the next transport	Managed as opened, sorted, processed, or held as sale inventory	Work logs, inventory records, photographs
Storage Location	CFS, bonded yard, or temporary storage location normally used in transport processes	Final warehouse selected by the shipper, sales warehouse, or long-term storage facility	Contracts, warehouse designation, transport route
Next Transport Arrangement	Vehicle, customs clearance, or delivery booking is actively progressing	Next transport arrangements are halted or undecided	Booking, delivery orders, delivery scheduling

Relationship with Held Covered

Held Covered is a concept used to confirm the continuation of insurance coverage when changes occur from the originally planned transport or storage conditions. It assumes that the insured promptly notifies the insurer and agrees to any additional premium or altered conditions.

Not all contracts that include the Open-Yard Storage Clause automatically have Held Covered with the same content.

In practice, it is necessary to check whether Held Covered wording is present in the insurance policy or individual clause, which changes are covered, the notification deadline, and the insurer’s discretion.

Check Item	Practical Meaning	Points to Note
Timing of Change Discovery	When it was learned that storage would be changed from indoor to open-yard	Failure to notify until after an incident could be disadvantageous.
Promptness of Notification	Whether contact with the insurer or insurance agent was made promptly after discovery	Failure to fulfill the notification obligation may result in denial of coverage continuation.
Timing of Incident	Before notification, after notification, or after approval	Retroactive approval after the incident is not automatically granted.
Additional Conditions	Waterproofing, rust prevention, security, storage period, or deductibles	Evidence of compliance with conditions should be preserved.
Additional Premium	Premium surcharge reflecting increased risk	Payment or agreement may be required as conditions for coverage continuation.
Insurance Period	Whether not only the insured risk but also the insurance period itself continues	Coverage after expiration cannot be automatically reinstated by Held Covered alone.

Information to Organize at Prior Notification

Notification Information	Reason for Confirmation	Main Documents	Practical Notes
Type, Nature, and Value of Cargo	The impact of water damage, rust, theft, or temperature varies by cargo.	Invoice, Packing List, Specification Sheet	Explain specific vulnerabilities of the cargo.
Packing, Waterproofing, Rust Prevention	Determine if the condition can withstand outdoor exposure.	Packing specifications, Photographs, Construction records	Specify details beyond just "wooden crate".
Storage Location	Risks differ depending on coastal proximity, elevation, pavement, and surroundings.	Location details, Photographs, Yard layout drawings	Show presence of roof, walls, drainage, and ground condition.
Planned Storage Period	Rust, deterioration, and theft risks increase with longer durations.	Transport schedule, Delivery plan	Confirm conditions for re-notification if extended.
Reason for Outdoor Storage	Assess if it was initially planned or a change beyond the insured’s control.	Customs notifications, Warehouse replies, Shipper instructions	Explain the relation to the ordinary course of transit.
Protective Measures	Affects likelihood of damage and underwriting conditions.	Tarps, Pallets, Securing methods, Inspection plans	Prepare to submit photos after implementation.
Security System	Assess theft and third-party contact risks.	CCTV, Security personnel, Access logs	Confirm management during nights and holidays.
Scheduled Devanning	Identify the timing when storage changes from closed container to exposed.	Devanning booking, CFS records	Notify before condition changes occur.

Common Practical Problem Cases

Case	Main Cause	Verification Documents	Key Points for Judgment	Initial Response
Machinery cargo got water damaged by heavy rain after devanning.	Indoor warehouse full, lack of tarps, poor drainage	Devanning records, storage photos, weather records, packing specifications	Coverage under Open-Yard Storage Clause, notification, and negligence of storage operator	Prevent further damage, secure photos and saltwater/water quality data.
Rust occurred on large plant equipment during long-term storage.	Delivery delay at destination site, exceeded rust prevention period, sea breeze exposure	Rust prevention records, storage period, inspection records, construction schedule	Whether it is an external incident or usual oxidation/delay/insufficient rust prevention	Stop rust progression and notify manufacturer and surveyor.
Condensation damage occurred inside sealed container.	Temperature difference, moisture content, lack of ventilation, long-term storage	Container condition, temperature and humidity data, packing, devanning photos	Whether rainwater intrusion during open-yard storage or internal condensation/inherent nature	Investigate moisture type and mechanism of occurrence.
Rainwater entered open-top container.	Damaged upper tarp, poor securing, insufficient drainage	Tarp specifications, photos, weather records, work records	Whether exposure storage conditions and waterproof measures were appropriate	Preserve torn tarp section and document damage area.
Flat rack cargo toppled over in typhoon.	Inadequate securing, rack settlement, strong winds	Securing plan, yard condition, wind speed, CCTV	Whether this was an extraordinary weather event or preventable securing failure	Preserve site and record securing materials and ground conditions.
Forklift collided with cargo in outdoor yard.	Work flow, poor visibility, cargo handling error	CCTV, work records, accident report, cargo photos	Liability under cargo insurance and cargo handling/yard operator	Notify counterpart in writing, secure evidence without seeking admission of liability.
Accessories were stolen during storage.	Package opened, insufficient security, poor access control	Inventory records, CCTV, security records, police report	Whether theft risk is covered and quantity evidence exists	Notify police and insurance company, inspect remaining items.
Cargo owner directed outdoor storage while awaiting sale.	Buyer change, inventory adjustment, delivery delay	Shipper instruction, sales records, storage contract	Whether ordinary course of transit has ended	Confirm insurance extension or separate insurance before instruction.
Outdoor storage prolonged due to customs inspection.	Administrative inspection, document verification, awaiting analysis	Authorities’ notification, customs records, storage schedule	Delay beyond insured's control or within 60 days	Notify insurance company upon recognition and strengthen protective measures.
Damage occurred before notification to insurance company.	Communication omission, misunderstanding among staff	Email, telephone logs, insurance application, accident time	Held Covered, notification obligation and coverage at time of accident	Chronologically record facts and report immediately to insurance company.

Practical Example 1: Outdoor Yard Storage of Large Plant Equipment for 45 Days

Plant equipment valued at 80,000,000 yen imported from Europe to Japan was stored for 45 days at an outdoor yard near the port due to delays in the delivery site construction schedule.

The cargo was packed in wooden crates, covered with waterproof sheets, and treated with anti-corrosion measures. However, after 30 days of storage, part of the sheet was torn, resulting in rust caused by sea breeze and rainwater.

The initial transportation plan scheduled delivery to the construction site within 5 days after customs clearance. However, the cargo owner chose long-term storage to align with the construction schedule, without notifying the insurance company of this change.

In this situation, it is necessary to confirm not only the coverage scope for rust damage under the Open-Yard Storage Clause but also whether the ordinary course of transit had already ended when the cargo owner opted for storage pending sale or construction.

If the yard operator knew of the sheet damage but did not replace it, the yard operator’s management responsibility and the insurance company’s right of recourse should also be considered separately.

Practical Example 2: Change to Open-Yard Storage After Unloading Due to Customs Clearance Delay

Assume that machinery in wooden crates valued at 30,000,000 JPY imported from China is held at customs due to verification of components and import documents.

Due to insufficient storage space within the CFS, unloading from the vessel occurred 12 days later and the cargo was transferred to an open yard.

The freight forwarder contacted the shipper on the day of the change, but the insurance company was notified only seven days later. During this interval, heavy rain caused water to penetrate the bottom of the wooden crates.

In this case, it must be confirmed whether the delay caused by administrative procedures and warehouse shortage exceeded the insured’s control, and whether the notification after learning of the switch to open-yard storage was made promptly.

Additionally, it should be confirmed whether the CFS or yard operator took appropriate measures such as proper crating, drainage, and waterproofing, while concurrently organizing the marine cargo insurance claim and any recourse against third parties.

Practical Example 3: Rainwater Ingress Incident in an Open-Top Container

Consider an industrial machine valued at JPY 20,000,000 imported from South Korea to Japan, loaded in an open-top container, and stored outdoors in a yard at the import port for 10 days.

A waterproof sheet had been installed on top, but strong winds dislodged the sheet’s fastening, allowing rainwater to enter the container interior.

Unlike sealed containers stored outdoors, the cargo was exposed to external environmental factors through the open top.

In this case, it is necessary to confirm the applicability of the Open-Yard Storage Clause or any specific exposed storage conditions, warranties related to the waterproof sheet, as well as the strength of the sheet and the party responsible for its securing work.

Even if water damage to the cargo is covered, if there is negligence by the party who performed the fastening, the insurance company may pursue subrogation claims against that party.

Practical Example 4: When a Closed Container Is Used as Stock Awaiting Sale

Assume furniture valued at JPY 15,000,000 imported into Japan is delivered inside a closed container onto the importer’s premises.

The importer, due to warehouse shortage, used the container as storage for stock awaiting sale for 60 days.

On the 40th day of storage, rainwater penetrated through corroded areas on the container’s roof, causing mold and water damage to the furniture.

In this case, simply being stored inside a closed container does not necessarily mean the ordinary course of transit was still continuing.

At the point when the importer chose to use the container for stock storage, it should be confirmed whether the insurance under ICC 2009 Clause 8.1.3 has terminated.

It is necessary to clearly distinguish between temporary awaiting delivery by the terminal or carrier and long-term stock storage by the cargo owner.

Liability of Warehouse and Yard Operators and Marine Cargo Insurance

Even if damage occurs during open-yard storage, warehouse or yard operators are not automatically liable for all damages.

On the other hand, payment of insurance claims under marine cargo insurance does not extinguish the liability of warehouse or yard operators.

These two are treated as separate legal relationships.

Points to Confirm	Liability of Warehouse/Yard Operators	Marine Cargo Insurance	Practical Considerations
Basis of Liability	Storage contract, warehouse receipt terms, work contract, negligence or tort, etc.	Insurance policy and applicable clauses	Do not confuse contractual liability with insurance coverage.
Main Judgment	Whether required care was neglected or the incident could have been prevented	Covered risks, insurance period, deductibles, and notification conditions	Even if insurance pays, investigate third-party liability.
Limitation of Liability	Limits under warehouse receipt terms or contractual caps may apply.	Policy limits, deductibles, and maximum payout apply.	Check each limit separately.
Evidence	Storage photos, CCTV footage, inspection records, work logs	Insurance policy, survey reports, damage documentation, notification records	Secure evidence so it can be used in proceedings for both parties.
Notification Deadlines	Contractual claim notification deadline or statute of limitations	Obligation to notify insurance incidents and policy conditions	Notification to one party does not necessarily fulfill the other's requirements.
Damage Mitigation	Cooperation to prevent damage escalation and site preservation	Obligation of the insured to prevent and mitigate damage	Prevent damage escalation before pursuing liability.

For example, even if a typhoon is the direct cause, if the approaching typhoon was forecast but the cargo was not secured, tarps were not reinforced, or the cargo was not moved away from low-lying areas, negligence in yard management may be questioned.

Conversely, if all contractually required protective measures were implemented and damage occurred due to an unforeseeable abnormal natural event, the yard operator’s liability may not be recognized.

Subrogation and Claims Against Third Parties

When a marine cargo insurance company pays an insurance claim to the insured, it may subrogate, within the scope of the payment, the rights that the insured holds against warehouse operators, yard operators, stevedores, carriers, or other third parties, in accordance with applicable laws and the insurance contract.

Therefore, the insured or freight forwarder needs to preserve the rights against third parties so that the insurance company can exercise its right of recourse.

• Notify the opposing party in writing immediately upon discovering the incident.
• Confirm the responsible persons, operators involved, and the time of the incident.
• Request preservation of CCTV footage, storage records, inspection records, and work logs.
• Do not dispose of damaged cargo, packing materials, or broken sheets without permission.
• Do not agree to any waiver of liability or low-value settlement without the insurance company’s approval.
• Confirm contractual notice periods, statutes of limitation, and jurisdiction for dispute resolution.

Under ICC 2009 Clause 16, the insured is also required to properly preserve and exercise rights against carriers, agents, and other third parties.

If compensation is received from a third party, the insured should report to the insurance company and settle accounts to avoid double recovery of marine cargo insurance proceeds.

Scope of Freight Forwarders’ Involvement

The Standard Five Classifications used in this article are not established by law or the entire industry. Within this series, they serve as an analytical framework to organize the scope of freight forwarders’ involvement in open-yard storage.

Standard Five Classifications	Main Involvement in Open-Yard Storage	Main Confirmation Documents	Points to Note When Determining Responsibility Scope
Simple Intermediary	Relay notifications of storage changes from warehouse or yard to shipper and insurance parties.	Relay emails, notification records, request details	Simply relaying information does not guarantee storage safety or insurance payment.
Cargo Transportation Service Provider	Contracts for transport services including import transport, devanning, storage, pickup, and inland delivery.	Transport contracts, quotations, delivery instructions, storage records	Confirm whether open-yard storage was included in the contracted scope of services.
NVOCC / House B/L Issuer	Issues House B/L and manages storage and incident handling during transport as Contracting Carrier.	House B/L, clauses, Master B/L, Booking	Coverage determinations under marine cargo insurance and Contracting Carrier liability should be confirmed separately.
Door-to-Door Single Contractor	Coordinates integrated arrangements for transport, customs clearance, devanning, storage, and delivery.	Through-transport contract, scope of work, subcontract agreements	Even with integrated arrangements, this does not imply unlimited liability for insurance amounts or indirect damages.
Agent/Coordinator for Specific Operations	Individually arranges yard reservation, protective measures, surveys, insurance notifications, or damage mitigation.	Individual mandates, work requests, coordination records	Cannot decide coverage eligibility or third-party liability beyond the delegated scope.

Contracting Carrier and Actual Carrier are concepts indicating the legal or contractual status related to carrier liability and do not replace the Standard Five Classifications used in this article.

Moreover, actual operations such as devanning, storage, tarpaulin covering, rust prevention, cargo handling, inspection, and surveys do not by themselves constitute a sixth classification. It is necessary to confirm for whom, under which contractual status, and to what extent these were undertaken.

Common Misunderstandings

Common Misunderstanding	Actual Perspective	Practical Response
If a container is outdoors, it is always considered open-yard storage.	There is a distinction between the outdoor storage of sealed containers and outdoor storage after devanning.	Confirm the exposure status of the cargo and the integrity of the container.
Insurance will always continue if the container is sealed.	If a container is used for storage outside the ordinary course of transit, insurance termination may become an issue.	Confirm the purpose of storage, the responsible party, and the next scheduled delivery.
ICC(A) covers all damage even during open-yard storage.	The Open-Yard Storage Clause or specific conditions may restrict coverage.	Check both the basic clauses and any special clauses.
Cargo is covered for any type of storage for 60 days after discharge.	If unloading to the final warehouse occurs first, insurance might end even before 60 days.	Review Clauses 8.1.1 through 8.1.4 in order.
Delays due to customs automatically qualify as ordinary course of transit.	Check not only the reason for delay, but also the storage purpose, duration, and the choice of the insured party.	Keep records of notifications from authorities, delivery arrangements, and storage instructions.
If there is Held Covered endorsement, notification after an incident is acceptable.	Prompt notification, additional conditions, and insurer approval may be required.	Notify immediately upon discovering any changes.
Covering with waterproof sheets means it is not open-yard storage.	Even with sheets, risks such as rain, wind, drainage, ventilation, and storage duration remain.	Verify the state of installation and conduct regular inspections.
Short-term open-yard storage does not affect insurance conditions.	Even a short period can involve risks like heavy rain, typhoons, theft, or impact damage.	Check not only the duration but also the cargo nature and storage environment.
All damage during open-yard storage is the warehouse operator's responsibility.	Responsibility varies based on storage contracts, negligence, cause of incident, liability limits, and evidence.	Review both cargo insurance and third-party liability in parallel.
If cargo insurance pays out, claims against the warehouse operator are not possible.	The insurance company may subrogate the insured's rights within the scope of payment.	Preserve rights against third parties and provide relevant documents to the insurer.
The freight forwarder can decide the application of the Open-Yard Storage Clause.	The final coverage decision is made by the insurance company based on the clause wording and facts.	Organize the storage condition details and confirm with the insurance company or insurance agent.

Checklist for Confirmation

Situation for Confirmation	Party to Confirm With	Items to Confirm	Actions if Issues Arise
Before arranging insurance	Cargo Owner, Freight Forwarder, Delivery Destination	Planned open-yard storage, cargo characteristics, storage period	Report in advance to the insurance company or insurance agent.
At Booking	Shipping Line, NVOCC, Cargo Owner	Whether sealed container, open top, flat rack, or unpacked cargo	If open storage is possible, confirm individual terms and conditions.
Before unloading (de-vanning)	CFS, Warehouse Operator, Customs Broker	Indoor or outdoor storage location after unloading	If outdoor, notify before unloading.
When changing storage method	Warehouse Operator, Yard Operator, Freight Forwarder	Reason for change, date and time of change, location, and planned period	Notify insurance company immediately upon recognition of change.
During ordinary course of transit confirmation	Cargo Owner, Freight Forwarder, Carrier	Purpose of storage, decision-making entity, next delivery arrangement	If stock storage occurs, confirm extension of insurance period or separate insurance.
When confirming the 60-day rule	Shipping Line, Terminal, Insurance Company	Date of completion of discharge from vessel and other termination reasons	Do not judge based solely on 60 days; confirm earlier termination reasons where applicable.
When long-term retention occurs	Customs Broker, Warehouse Operator, Delivery Destination	Reason for extension, extension period, and protective measures	Reconfirm additional premiums, inspections, waterproofing, and rust prevention.
Upon discovery of an incident	Warehouse Operator, Yard Operator, Surveyor	Damage condition, occurrence location, time, and cause	Preserve the site and secure photographs, CCTV footage, and weather records.
When confirming insurance terms	Insurance Company, Insurance Agent, Insured	ICC, Open-Yard Storage Clause, Held Covered, notifications, and exclusions	Organize coverage scope by type of damage.
When confirming third-party liability	Warehouse Operator, Yard Operator, Cargo Handling Operator	Contract, management status, negligence, liability limits	Submit claim notification in writing within the deadline.
When preserving subrogation rights	Insurance Company, Surveyor, Attorney	Evidence, notification deadlines, statute of limitations, preservation of damaged goods	Confirm with insurance company before settlement or disposal.

Documents to Verify in Case of an Incident

Document	Information Confirmed	Practical Purpose
Insurance Policy / Special Clauses	ICC, Open-Yard Storage Clause, Held Covered, Exclusions and Limits	Verify coverage scope and insurance period.
Vessel Discharge Records	Date of completed discharge	Confirm the starting date for the 60-day count under Clause 8.1.4.
Devaning Records	Date and time when storage changed from container to open-yard	Identify damage occurrence section and storage conditions.
Photos of Storage Location	Roof, walls, ground, drainage, surrounding environment	Verify applicability of open-yard storage and storage risks.
Photos of Cargo and Packaging	Wooden crates, unpackaged cargo, tarps, rust prevention, and pallets	Confirm protective measures and pre-incident condition.
In-Gate, Out-Gate, and Movement Records	Storage duration, cargo location, and work history	Identify incident timing and responsible management entity.
Storage and Delivery Instructions	Who selected storage and for what purpose	Determine relationship with ordinary course of transit.
Inspection Records from Yard or Warehouse Operators	Tarps, rust, flooding, security, and regular inspections	Confirm fulfillment of management obligations.
CCTV and Security Logs	Cargo handling contacts, theft, third-party access	Verify cause of incident and third-party liability.
Weather Records	Rainfall, typhoons, wind speed, high temperatures, and salt spray	Confirm causal relationship between external risks and damage.
Notification Records to Insurance Company	Notification date/time, contents, approval, and additional conditions	Confirm compliance with Held Covered and advance notification requirements.
Warehouse Deposit Terms / Storage Contract	Management obligations, liability limits, exclusions, and notification deadlines	Confirm liability of warehouse and yard operators.
Survey Report	Cause of damage, extent, storage conditions, and subrogation potential	Serve as basis for insurance claims and third-party recovery.
Repair and Disposal Estimates	Repair feasibility, damage cost, and residual value	Assess insurance claim amount and damage mitigation options.

Practical Points

The Open-Yard Storage Clause is a special clause designed to adjust the increased risks and coverage conditions when cargo is stored outdoors, such as in open yards.

The outdoor storage of sealed containers is confirmed separately from the outdoor storage of wooden crate cargo, unpackaged cargo, or machinery cargo after devanning.

However, even sealed containers’ use by the insured for storage outside the ordinary course of transit could raise issues regarding the termination of the insurance period.

Under ICC 2009 Clause 8.1, insurance terminates at the earliest occurrence of unloading at the final warehouse, voluntary storage outside the ordinary course of transit, use of the container for storage, or 60 days after the vessel discharge.

Therefore, the mere fact that it is within 60 days after discharge does not automatically mean that insurance coverage continues during outdoor storage.

Conversely, temporary storage caused by delays beyond the control of the insured may be covered under Clause 8.3. It is necessary to confirm the purpose of storage, the party choosing it, the duration, and arrangements for subsequent transportation.

The liability of the warehouse or yard operator and marine cargo insurance coverage are separate issues. Even if compensation is paid, the insurer may subrogate rights against the warehouse operator, so securing CCTV footage, inspection records, storage photos, and claim notifications is important.

The freight forwarder or NVOCC is not in a position to make the final decision on the application of the Open-Yard Storage Clause, the insurance period, or the warehouse operator’s liability. They should organize the storage conditions and chronology and encourage the cargo owner to confirm details with the insurance company or insurance agent.

Summary

The Open-Yard Storage Clause is a special clause that adjusts the scope of coverage, notification requirements, additional premiums, and protective measures in marine cargo insurance when cargo is stored outdoors in open yards or similar areas.

Outdoor storage exposes cargo to increased risks compared to normal indoor storage, including rainwater, direct sunlight, dust, sea breeze, theft, handling impacts, typhoons, flooding, and prolonged storage.

A distinction is made between cargo kept outdoors inside sealed containers and cargo itself placed outdoors after devanning. However, using sealed containers for long-term stock storage may raise issues of insurance termination as storage outside the ordinary course of transit.

Even if insured under ICC(A), coverage during outdoor storage may be limited by the Open-Yard Storage Clause or individual conditions to ICC(C)-equivalent risks or specific perils only.

According to ICC 2009 Clause 8.1, insurance terminates at the earliest of the following: unloading at the final warehouse, choice of storage outside the ordinary course of transit, use of container storage, or 60 days after the vessel’s discharge.

Coverage may continue during delays beyond the insured’s control under Clause 8.3, but whether the cargo remains within the ordinary course of transit depends on the storage purpose, duration, the party choosing the storage, and the shipping arrangements.

If unplanned outdoor storage is identified, do not assume Held Covered as automatic relief. Promptly notify the insurance company or insurance agent to confirm additional conditions, surcharge premiums, and insurance periods.

In the event of damage during outdoor storage, marine cargo insurance claims and liability pursuit against warehouses, yards, or stevedores should be handled separately. It is essential to preserve rights and evidence against third parties in preparation for subrogation by the insurer.

This article explains general practical considerations regarding the Open-Yard Storage Clause, ICC insurance periods, Held Covered, warehouse and yard operators’ liability, and insurance subrogation. It does not determine insurance claim payment, insurance termination, or third-party liability for specific incidents.

Actual judgments should be made by reviewing the insurance policy, applicable clauses, notification records, vessel discharge date, storage purpose, storage location, cargo condition, warehouse deposit terms, and cause of loss, in consultation with the insurance company, insurance agent, or maritime and insurance experts.