Termination of Transit Clause (Terrorism) 2009
Interlink編集部What Is the Termination of Transit Clause (Terrorism) 2009
The Termination of Transit Clause (Terrorism) 2009 is a clause that applies when marine cargo insurance contracts include coverage for damage caused by terrorism. It limits such coverage to the ordinary course of transit and specifies the point at which this coverage terminates.
The clause number used in the London market is JC2009/056, commonly referred to as JC56.
This clause does not itself provide new coverage for terrorism risks.
It assumes the existence of coverage for loss or damage caused by terrorism under the insurance contract or attached clauses and sets restrictions on the duration of that coverage.
Additionally, this clause is structured as a priority clause that takes precedence over any conflicting provisions within the insurance contract.
The terrorism coverage continues only while the insured cargo remains in the ordinary course of transit, and it terminates at the earliest occurrence among the following: the transit period limit under the underlying transport contract, unloading at the final warehouse, storage or distribution outside the ordinary course of transit, use of container or similar storage facilities, and the maximum period allowed for sea or air transportation.
The core purpose of the Termination of Transit Clause (Terrorism) 2009 is not only to determine whether terrorism damage is covered but also to confirm whether terrorism coverage was still in effect at the time the incident occurred.
Scope Covered in This Article
| Item | Content Covered in This Article | Content Covered in Other Articles or Under Different Conditions |
|---|---|---|
| Positioning of the Clause | Clarifies that JC2009/056 is a priority clause defining the termination point of terrorism coverage. | Underwriting acceptance or rejection of terrorism coverage itself should be confirmed in the insurance policy, Institute Strikes Clauses, and other ancillary conditions. |
| Scope of Terrorism | Clarifies organized terrorist acts targeted by the clause as well as acts motivated by political, ideological, or religious reasons. | Whether an individual incident legally or contractually qualifies as terrorism should be determined based on incident details and official wording. |
| Ordinary Course of Transit | Differentiates between temporary storage necessary for transit and storage for sales, distribution, or inventory purposes. | The overall insurance period under ordinary marine cargo insurance is handled in the article explaining ICC 2009 Clause 8. |
| Unloading at Final Warehouse | Clarifies termination of terrorism coverage when unloading at the final destination specified in the policy is completed. | Delivery, transfer of ownership, or risk transfer under sale contracts should be addressed separately as contractual matters. |
| Storage Outside Ordinary Course of Transit | Clarifies termination of coverage due to inventory storage, awaiting sale, awaiting distribution, or undetermined delivery destinations. | Warehouse insurance, inventory insurance, and terrorism coverage during storage should be arranged separately. |
| Use of Containers, etc. as Storage | Clarifies cases where containers, vehicles, or transport equipment are used effectively as storage locations. | Demurrage, Detention, and container return liability are handled in other articles. |
| 60 Days Sea Transit | Clarifies the upper limit of 60 days after completion of unloading from the vessel at the final port of discharge. | Coverage terminates earlier if other termination conditions arise within 60 days. |
| 30 Days Air Transit | Clarifies the upper limit of 30 days after completion of unloading from the aircraft at the final location. | Whether inland transport from the airport warehouse is covered contractually should be confirmed separately. |
| Continued Transit after Storage | Clarifies conditions under which coverage restarts for inland transport or additional transit explicitly specified in the contract. | Coverage does not automatically restart for mere planned deliveries or movements after the fact. |
| Freight Forwarder Involvement | Clarifies the scope of confirmation regarding storage purpose, unloading date, continued transit, and notification to insurers. | Final coverage acceptance and indemnity liability should be determined individually based on contracts, clauses, causes of the incident, and evidence. |
Why a Dedicated Termination Clause Is Necessary
Standard marine cargo insurance is designed to cover risks to insured goods during the ordinary course of transit from the place of departure to the place of destination.
In contrast, terrorism risks have the potential to cause massive accumulative losses affecting numerous cargoes simultaneously.
Ports, airports, terminals, logistics warehouses, container yards, and distribution centers are locations where a large volume of cargo is consolidated in a single place.
If terrorism coverage is extended beyond the transportation phase—continuing into storage or distribution under the same terms as ordinary marine cargo insurance—the insurer would become exposed to unforeseen long-term and accumulative risks.
Therefore, the Termination of Transit Clause (Terrorism) 2009 explicitly limits terrorism coverage to the ordinary course of transit and clarifies termination conditions related to storage, distribution, container detention, and the passage of time.
This clause does not solely address whether the cargo is physically in motion.
What matters is the purpose for which the cargo is placed at a location, whether specific subsequent transportation is concretely planned, and whether the insured party has deliberately chosen to keep the cargo for storage or distribution.
Priority Application of the Clause and Scope of Terrorism
The Termination of Transit Clause (Terrorism) 2009 is structured to take precedence if there are any conflicting provisions within the insurance contract.
Therefore, even if the insurance period appears to remain valid under the usual cargo insurance conditions, coverage for damage caused by terrorism may be terminated earlier under JC2009/056.
The terrorism covered by this clause includes acts carried out for the purpose of an organization that uses force or violence to overthrow or influence a government, or by persons acting in connection with such an organization.
Acts committed by persons motivated by political, ideological, or religious reasons are also included.
However, whether an incident falls under this definition is not determined solely by the case name, media designation, or claims by the parties involved.
The identity of the actor, their motivation, relationship to the organization, recognition by government authorities, cause of the incident, and applicable policy wording should be confirmed.
| Confirmation Items | Details to Confirm | Practical Issues | Main References |
|---|---|---|---|
| Existence of Coverage | Whether the insurance contract includes coverage for loss caused by terrorism | Even if JC2009/056 is included, terrorism coverage itself may not be provided. | Insurance policy, attached clauses, Institute Strikes Clauses |
| Priority Clause | Whether JC2009/056 is incorporated into the contract | Terrorism coverage may terminate earlier than the ordinary transit period clauses. | Special clauses list, endorsement, schedule |
| Actor | Whether the act was carried out for or in connection with an organization | Distinction from ordinary crime, sabotage, or riots is necessary. | Investigation materials, government announcements, incident reports |
| Motivation | Whether there is a political, ideological, or religious motive | Distinguishing from personal vendettas, financial motives, or simple vandalism is required. | Claim declarations, investigation records, expert opinions |
| Timing of the Incident | Whether the incident occurred before the terrorism coverage termination | Even if the cause is terrorism, coverage may not apply if the incident happened after coverage termination. | Incident timing, unload records, storage records, transport history |
Termination Conditions of Clause 1 Coverage
Terrorism coverage terminates at the earliest occurrence among the following termination events.
| Clause | Termination Event | Operational Confirmation | Notes |
|---|---|---|---|
| Clause 1.1 | When coverage ends according to the transit period clause included in the insurance policy | Verify the ICC 2009 Clause 8 and other underlying transit period clauses. | If the underlying condition’s expiry is earlier, coverage may end before 60 or 30 days. |
| Clause 1.2 | When unloading from the transport vehicle or other transport equipment is completed at the final warehouse or final storage location at the destination stated on the policy | Confirm the final destination, unloading completion date and time, and warehouse entry records. | Check not only the receipt but also the actual unloading completion time. |
| Clause 1.3 | When unloading is completed at a separate warehouse, etc., selected by the insured or their employees for storage or sorting/distribution outside the ordinary course of transit | Verify storage purpose, cargo owner instructions, and sales or distribution plans. | Coverage may end even if the warehouse is before the final destination. |
| Clause 1.4 | When the insured or their employees elect to use the transport vehicle, transport equipment, or container for storage outside the ordinary course of transit | Confirm the purpose of container detention, start date and time, and next planned transport. | Coverage may terminate at the moment storage use is chosen, even without unloading. |
| Clause 1.5 | For marine transport, 60 days after unloading from the vessel is completed at the final port of discharge | Confirm the date and time of unloading completion from the vessel. | Sixty days is the maximum limit and is not automatically guaranteed. |
| Clause 1.6 | For air transport, 30 days after unloading from the aircraft is completed at the final location | Confirm the unloading completion date and time from the aircraft. | Coverage may end earlier if other termination events occur within 30 days. |
Clauses 1.1 through 1.6 are not optional. The earliest occurrence among these conditions determines the termination point of terrorism coverage.
Relationship with Standard Cargo Insurance Conditions
| Check Items | Standard Cargo Insurance | Terrorism Coverage | Practical Notes |
|---|---|---|---|
| Covered Risks | Varies by ICC(A), ICC(B), ICC(C), etc. | Check whether terrorism coverage is included as an additional condition. | Terrorism coverage is not granted by JC2009/056 alone. |
| Insurance Period | Follows the ordinary course of transit and clauses such as ICC 2009 Clause 8. | The termination conditions of JC2009/056 take precedence. | Terrorism coverage may terminate even if the standard cargo insurance remains in effect. |
| Final Warehouse | Represents the end point under the standard transit period clause. | Terminates upon completion of discharge according to Clause 1.2. | Confirm the name of the final warehouse and its actual intended use. |
| Storage at Separate Warehouse | Check whether it is within the ordinary course of transit. | If storage or distribution is outside the ordinary course of transit, Clause 1.3 applies. | The reason the insured chose to use the warehouse is important. |
| Container Detention | Coverage may continue if the waiting is necessary for transport. | Clause 1.4 may apply when the container is used for storage purposes. | Being inside a container alone does not automatically mean the cargo is in transit. |
| Maximum Period | In marine transport, usually 60 days after discharge at the final port of unloading. | Explicit limits of 60 days for sea and 30 days for air are stated. | Coverage does not continue until the maximum period if other termination events occur first. |
| Re-transport after Storage | May be covered depending on contract terms or additional arrangements. | Coverage only reinstates if conditions under Clause 2 are met. | Coverage is not automatically restored merely because transport resumes later. |
What Constitutes the Ordinary Course of Transit
The ordinary course of transit refers to the usual and continuous flow of transportation in which the cargo moves from the place of departure toward the final destination specified in the insurance contract.
Even if the cargo is temporarily halted or stored, this may still be considered part of the ordinary course of transit if the stoppage is normally required for customs clearance, inspection, transshipment, connection to the next mode of transport, or final delivery.
On the other hand, if the cargo is stored due to the insured party’s sales plans, inventory adjustments, warehouse shortages, price trends, undetermined delivery points, or distribution planning, storage or inventory purposes take precedence over transportation.
Whether the situation falls within the ordinary course of transit is not determined solely by the duration of storage.
It should be assessed comprehensively by considering the reasons for storage, transport planning, the subsequent transport mode, instructions from the cargo owner, the party responsible for cargo management, and notifications to the insurer.
Storage Within the Ordinary Course of Transit and Storage Outside the Ordinary Course of Transit
| Category | Purpose of Storage | Typical Examples | Viewpoint for Terrorism Coverage | Main Documentation for Confirmation |
|---|---|---|---|---|
| Storage Generally Considered Part of the Ordinary Course of Transit | Temporary storage for customs clearance, inspection, transshipment, ordinary connection waiting, or final delivery | Customs-related waiting in bonded warehouses, connection waiting for regular sailings, customs inspections | If the storage is normally necessary to continue transit, coverage could potentially continue. | Customs documents, inspection orders, subsequent sailing reservations, delivery instructions, in/out warehouse records |
| Delays Beyond the Control of the Insured | Port congestion, additional customs inspections by authorities, road closures, or waiting due to carrier circumstances | Congestion caused by port strikes, customs analytical inspections, delayed arrival of transport vehicles | It should be confirmed whether the ordinary course of transit continues by examining the reason for delay and intention to continue transit. | Port notices, customs instructions, carrier reports, insurer communications |
| Storage Likely Considered Outside the Ordinary Course of Transit | Waiting for sale, waiting for distribution, inventory adjustment, undetermined delivery destination, or long-term storage | Inventory storage after customs clearance, waiting for determination of sales destinations, waiting for price increases | Terrorism coverage may terminate under Clause 1.3. | Storage contracts, sales plans, inventory records, cargo owner instructions |
| Storage Due to Warehouse Shortage | Use of alternative or bonded warehouses because the final warehouse cannot accommodate goods | Waiting for space availability at cargo owner’s warehouse, insufficient factory space | Such storage may be considered storage for the convenience of the insured. | Warehouse conditions, reasons for storage, scheduled deliveries, insurer approval |
| Storage for Distribution and Sorting | Storage aimed at splitting goods for multiple sales destinations or delivery points | Sorting by store at distribution centers, allocation to domestic sales destinations | This may fall under Allocation or Distribution as defined in Clause 1.3. | Distribution instructions, picking records, sales destination lists, inventory ledgers |
| Storage with Ambiguous Classification | Temporary acceptance delays at delivery destinations, incomplete documents, or shortage of transport vehicles | Delivery delays of several days, waiting for corrected documents, emergency vehicle changes | It should be checked whether this is a delay within the ordinary course of transit or storage chosen by the insured. | Reasons for delay, storage duration, next delivery schedule, related party emails |
When Using Containers or Transport Equipment as Storage Locations
Clause 1.4 applies not only when cargo is unloaded into warehouses but also when containers, trailers, transport vehicles, or other transport equipment are used as storage locations outside the ordinary course of transit.
In such cases, even if unloading is not completed, terrorism coverage could terminate once the insured or their employees choose to use the equipment for storage purposes.
| Usage Situation | Likely Considered Transit Purpose | Likely Considered Storage Purpose | Points to Confirm |
|---|---|---|---|
| Container detention within port area | Short-term connection wait for ordinary customs clearance or delivery vehicle | Long-term detention due to undefined buyer or warehouse shortage | Reason for detention, duration, gate-out reservation, customs status |
| Container on cargo owner's premises | Short wait for immediate devanning after arrival | Continued use of container as temporary warehouse | Devanning schedule, decision maker for use, storage records |
| Cargo on trailers | Reasonable rest or operational regulation wait during delivery | Long-term parking storage with delivery destination undecided | Operation instructions, driver logs, next destination |
| Airport ULDs and air containers | Short-term storage under normal airline handling | Long-term detention or distribution wait due to importer’s circumstances | Airline records, earliest pick-up date, cargo owner instructions |
| Railway freight cars and transport vehicles | Wait for normal connection or schedule | Use of vehicles as alternative inventory storage | Connection plans, detention location, storage purpose |
The mere fact that cargo remains inside a container does not prove it is still within the ordinary course of transit.
Concept of 60 Days for Marine Transport and 30 Days for Air Transport
| Transport Mode | Starting Point of Period | Maximum Duration | Main Cases of Early Termination | Required Documents |
|---|---|---|---|---|
| Marine Transport | When unloading of the insured cargo from the vessel at the final discharge port is completed | 60 days | End of the base transport Clause period, unloading at the final warehouse, storage or distribution outside the ordinary course of transit, container storage use | Discharge Report, terminal records, B/L, Arrival Notice |
| Air Transport | When unloading of the insured cargo from the aircraft at the final destination is completed | 30 days | End of the base transport Clause period, unloading at the final warehouse, storage or distribution outside the ordinary course of transit, use of transport equipment storage | AWB, airline arrival records, airport warehouse records, unloading time |
The 60-day or 30-day periods do not represent a duration during which terrorism coverage continues unconditionally.
For example, if marine cargo is unloaded from the vessel and then, on the 10th day, is unloaded to a warehouse designated by the cargo owner awaiting sale, coverage may terminate under Clause 1.3 even if 60 days have not passed.
Also, if unloading at the final warehouse is completed on the 3rd day after vessel discharge, termination under Clause 1.2 will occur before Clause 1.5.
Continuation of Transit After Storage and Clause 2
Clause 2 specifies reinstatement of coverage when additional inland transport or other onward transit continues after storage or termination of coverage under Clause 1.
However, coverage does not automatically resume once the cargo starts moving again.
The insurance policy or the referenced clause must explicitly cover inland transport or other onward transit following storage or a prior termination of coverage.
When this condition is met, terrorism coverage reinstates when the cargo re-enters the ordinary course of transit, and the termination conditions of Clause 1 apply anew to the continuation of transit.
| Situation | Potential for Coverage Reinstatement | Points to Confirm | Notes |
|---|---|---|---|
| Inland onward transit planned from the outset | May be reinstated if explicitly stated in the insurance policy. | Final destination on the policy, inland segment, storage location | Check coverage scope contractually, not just planned transit. |
| Dedicated transport resumed after storage | Considered if covered by additional conditions or endorsement. | Additional premium, approval documents, start date and time | Confirm prior notification and written approval. |
| Delivery after buyer is determined | Typically does not reinstate coverage automatically. | Timing of sales decision, purpose of storage, additional insurance | Transitioning from inventory storage to sales transit alone is insufficient. |
| Use for separate shipment after storage | Likely requires new arrangements as it falls outside the original contract. | New transport contract, destination, insurance policy | Avoid assuming continuation of original insurance coverage. |
| Unnotified transit after coverage termination | Generally, automatic reinstatement cannot be expected. | Notification history, approvals, applicable clauses | Do not base on retrospective approvals after incidents. |
Points to Note for Long-Term Storage and Transportation Delays
Cargo may be held for extended periods due to port congestion, customs inspections, document deficiencies, shortage of delivery vehicles, or reasons on the consignee side.
The mere fact that cargo is not moving does not automatically mean it is outside the ordinary course of transit.
However, the longer the detention period, the more important it becomes to determine whether it is a necessary wait for transportation or a shift to storage or inventory purposes.
| Reason for Delay | Circumstances Indicating It Is Within Ordinary Course of Transit | Circumstances Indicating It Is Outside Ordinary Course of Transit | Actions |
|---|---|---|---|
| Customs Inspection | Routine or additional inspections directed by customs, with confirmed delivery after completion | Cargo Owner’s document deficiencies left uncorrected for an extended period, with no delivery plan | Record inspection instructions, document submission, and delivery schedule. |
| Port Congestion | Unavoidable delay caused by congestion at the port or terminal as a whole | Cargo ready for release but pickup delayed due to cargo owner’s circumstances | Confirm date cargo can be moved out, reservation status, and cargo owner instructions. |
| Consignee's Acceptance Delay | Short-term delay with a specific confirmed re-delivery date | Undetermined consignee with transition to storage for sales or inventory purposes | Put the reason for the delay and re-delivery date in writing. |
| Warehouse Shortage | Temporary facility disruption on carrier side with alternative transportation in progress | Storage at a different warehouse due to cargo owner’s warehouse circumstances | Notify the insurance company early and confirm conditions for extension. |
| Lack of Transportation Means | Waiting for the next reserved vessel or vehicle as part of normal connection | No subsequent transportation contract, resulting in indefinite cargo retention | Confirm next vessel reservation, land transport arrangements, and planned departure. |
Standard Five Classifications of Freight Forwarder Involvement
The five classifications presented in this article are not established by statute or industry-wide consensus. They serve as an analytical framework used throughout this series to organize the scope of freight forwarder involvement.
| Standard Five Classifications | Main Involvement Related to Termination of Terrorism Coverage | Central Focus of Liability Assessment | Key Reference Documents |
|---|---|---|---|
| Simple Intermediary | Acts as liaison between the cargo owner and insurers, warehouse operators, carriers, etc. | Whether involvement exceeded mere intermediation to guarantee continued coverage or insurance period | Email, information notices, referral records, quotations |
| Cargo Transportation Service Provider | Provides cargo transportation services including inland transport, storage, and onward transit. | Contract segment, storage purpose, presence of continuation transport, and accident notification | Transport contracts, shipping instructions, storage records, routing schedules |
| NVOCC / House B/L Issuer | Defines the final destination and contractual transport segment on the House B/L. | Destination on House B/L, scope of responsibility, storage options, and notification deadlines | House B/L, Master B/L, Arrival Notice, Delivery Order |
| Door-to-Door Single Contractor | Assumes responsibility collectively for ocean/air transport, customs clearance, storage, and final delivery. | Final point in the comprehensive contract, subcontractor management, continuation transport after storage, and insurance arrangements | Comprehensive quotations, specifications, subcontract agreements, delivery plans |
| Agent/Coordinator for Specific Operations | Coordinates specific operations such as customs clearance, storage, gate-out, insurance notification, or extension approvals. | Scope of delegation, notification obligations, authority for verification, and final decision maker | Delegation records, verification requests, approval documents, communication logs |
Contracting Carrier and Actual Carrier denote legal or contractual positions and do not serve as alternative classifications replacing the Standard Five Classifications used in this article.
Actual operations such as customs clearance, storage, devanning, distribution, inventory management, or insurance notifications do not constitute a sixth classification by themselves.
Example 1: Temporary Storage in a Bonded Warehouse While Awaiting Customs Clearance
Assume that cargo transported by sea is unloaded from the vessel at the final port and temporarily stored in a bonded warehouse for routine customs inspection and clearance procedures.
If the carrier to the final warehouse, delivery date, and consignee have already been determined, and the cargo is scheduled for immediate delivery upon completion of customs clearance, such storage could be considered part of the ordinary course of transit.
However, there is a 60-day limit under Clause 1.5, and other termination conditions under the basic transit terms also apply.
Documents to verify this include the vessel unloading completion date and time, customs inspection instructions, customs clearance documents, bonded warehouse entry records, delivery booking, and the final destination.
Merely being labeled as a bonded warehouse does not determine whether coverage continues or ends; the purpose of storage and the specificity of continued transit must be confirmed.
Example 2: Using a Container as a Storage Location While Waiting for Sale
Suppose imported cargo has cleared customs, but since the sales destination is not yet decided, the cargo owner decides to move the container with the cargo still loaded to an off-port yard and store it there for several weeks.
The cargo remains inside the container, but there is no specific subsequent shipping plan, and the container is being used as an alternative for inventory storage.
In this case, since the insured party has chosen to use the container for storage outside the ordinary course of transit, coverage for terrorism under Clause 1.4 may terminate.
Coverage continuation cannot be determined solely on the basis that devanning has not been performed or that less than 60 days have passed since the vessel's discharge.
Clause 1.4 places importance not on the completion of unloading, but on the choice to use the transport equipment for storage.
Example 3: When Contracted Inland Transport Starts After Storage
Suppose air cargo is unloaded at the final airport, temporarily stored at a contracted storage facility as planned, and then scheduled for delivery to an inland factory which is the final destination stated in the policy.
If the insurance contract explicitly covers the inland continued transport after this temporary storage, terrorism coverage could resume under Clause 2 once the inland transport begins and the cargo returns to the ordinary course of transit.
Thereafter, Clause 1’s termination conditions would again apply to the inland transport.
On the other hand, if the final destination stated in the policy is limited to the airport or airport warehouse and inland transport after storage is not included in the contract, automatic resumption of coverage cannot be expected.
The key factor for resumption of coverage is not the fact that the cargo started moving again but whether the continued transport after storage is explicitly covered by the insurance contract.
Cases Commonly Problematic in Practice
| Case | Main Issues | Reference Documents | Key Points for Judgment | Initial Response |
|---|---|---|---|---|
| Accident during ordinary customs waiting in bonded warehouse | Ordinary course of transit, 60-day limit | Customs instructions, warehousing records, delivery schedule | Whether temporary storage was necessary for transport | Record the reason for customs and the next transport steps. |
| Storage while awaiting consignee decision after customs clearance | Inventory storage, Clause 1.3 | Sales plans, inventory ledger, cargo owner instructions | Whether purpose shifted from transport to sale/storage | Confirm the start date and time of storage. |
| Long-term detention inside container | Use of container for storage, Clause 1.4 | Reason for detention, gate-out reservation, storage location | Whether transport equipment was chosen as storage site | Confirm the intended use with relevant parties. |
| Retention exceeding 60 days after vessel discharge | Clause 1.5 time limit | Discharge report, terminal records | Start date and accident date | Document the date and time of discharge completion as evidence. |
| Storage exceeding 30 days after air cargo discharge | Clause 1.6 time limit | AWB, air cargo warehouse records, warehousing logs | Date of discharge at final destination | Secure airport records promptly. |
| Sorting by store at separate warehouse | Allocation or distribution | Sorting instructions, shipment destination list, inventory records | Whether it falls under distribution purpose in Clause 1.3 | Confirm who authorized warehouse use. |
| Delivery delay due to port closure | Delay beyond control, ordinary course of transit | Port notices, traffic closure information, delivery reservations | Intention to continue transport and inevitability | Notify insurer promptly. |
| Delivery to a different consignee after storage | Clause 2 reattachment, transportation outside original contract | Policy, additional approvals, sales contract, delivery instructions | Whether continuous transport is explicitly allowed under the contract | Confirm written approval before starting transport. |
Termination of Transit Clause (Terrorism) 2009 Application Judgment Flow
- Check the insurance policy, special clauses, and endorsement to confirm whether loss or damage to cargo due to terrorism is covered.
- Confirm whether the Termination of Transit Clause (Terrorism) 2009 (JC2009/056) is incorporated in the contract.
- Review the parties involved in the incident, their affiliations, and political, ideological, or religious motives to assess whether the act qualifies as terrorism under the clause.
- Identify the date and time of the incident, cargo location, mode of transport, storage site, and responsible party for cargo control.
- Verify whether, at the time of the incident, the cargo was still in the ordinary course of transit heading toward the final destination, or had it transitioned to sale, distribution, storage, or long-term warehousing.
- Confirm the underlying transit period clause and check under Clause 1.1 whether the marine cargo insurance coverage period had already ended.
- Confirm the completion date of devanning at the final or other warehouse and the purpose of storage, then examine the applicability of Clause 1.2 or Clause 1.3.
- Check if containers, trailers, transport vehicles, or other conveyances were used for storage outside the ordinary course of transit, and consider the application of Clause 1.4.
- For ocean transport, confirm whether 60 days have elapsed since completion of vessel discharge at the final port, or for air transport, whether 30 days have passed since aircraft unloading at the final destination.
- Among Clauses 1.1 through 1.6, identify the earliest termination cause that applies.
- If inland or additional transport follows storage, confirm whether the insurance contract explicitly covers such continued transit and organize the situation regarding reinstatement under Clause 2.
- Prepare and organize unloading records, storage purpose, ongoing transport plans, insurer notifications, approval documents, and incident materials to submit to the insurance company or insurance agent.
Documents to Check in Case of an Incident
| Document Type | Main Documents | Purpose of Verification | Practical Notes |
|---|---|---|---|
| Insurance Terms | Insurance Policy, Institute Strikes Clauses, JC2009/056, Special Clauses, Endorsements | Confirm the existence of terrorism coverage and termination conditions. | Check the full text, not just the clause names. |
| Cause of Incident | Government Announcements, Police Reports, Statements of Responsibility, Accident Investigation Reports | Verify whether the incident qualifies as terrorism under the policy. | Do not rely solely on media labels. |
| Marine Discharge | Discharge Report, Terminal Records, Shipping Line Records, B/L | Confirm the starting point of the 60-day count under Clause 1.5. | Check the date and time when discharge from the vessel was completed. |
| Air Cargo Unloading | Airline Records, Airport Warehouse Records, AWB, Arrival Documentation | Confirm the starting point of the 30-day count under Clause 1.6. | Check the date and time when unloading from the aircraft was completed. |
| Final Warehouse | Delivery Note, Receipt, Unloading Records, Warehouse Entry Records | Confirm the termination point under Clause 1.2. | Distinguish between arrival on documents and actual unloading. |
| Alternate Warehouse / Distribution | Storage Agreement, Cargo Owner Instructions, Distribution Instructions, Inventory Ledger | Verify the purpose of storage or distribution under Clause 1.3. | Check who chose the use of the warehouse. |
| Container Detention | Container Number, Detention Location, Release Records, Delivery Booking | Confirm use of storage under Clause 1.4. | Record the start time and purpose of detention. |
| Ordinary Course of Transit | Transport Schedule, Customs Documents, Inspection Instructions, Next Voyage Booking, Delivery Instructions | Confirm whether temporary storage was necessary for transport. | Check if the next transport was concretely planned. |
| Continued Transit | Additional Approval, Inland Transport Agreement, Final Destination on Documents | Confirm whether reattachment occurred under Clause 2. | Review coverage details prior to the start of onward transport. |
| Notification to Insurer | Incident Notification, Storage Extension Notices, Approvals, Emails | Verify declarations to the insurer and any additional conditions. | Avoid relying solely on verbal approvals. |
Checklist for Judgment in Freight Forwarder Operations
| Confirmation Situation | Party to Confirm With | Matters to Confirm | Action If Issues Arise |
|---|---|---|---|
| When Arranging Insurance | Cargo Owner, Insurance Company, Insurance Agent | Presence of terrorism coverage, application of JC2009/056, applicable sections | Do not assume the insurance period is the same as for ordinary cargo insurance; confirm termination conditions. |
| When Planning Transportation | Cargo Owner, Shipping Line, Airline, NVOCC | Final port, final airport, final warehouse, inland transportation and storage locations | Ensure the final destination on the policy matches the transportation itinerary. |
| At Cargo Unloading | Shipping Line, Airline, Terminal, Airport Warehouse | Date and time of unloading completion, unloading location | Secure documents to start counting the maritime 60 days or air 30 days period. |
| At Final Warehouse In-Gate | Cargo Owner, Warehouse Operator, Delivery Service | Is it the final warehouse, has unloading completed, purpose of storage | Record the termination point in Clause 1.2. |
| When Storing at Another Warehouse | Cargo Owner, Warehouse Operator, Customs Broker | Is it temporary storage in the ordinary course of transit, or for stock/distribution purposes | Clarify the relationship with Clause 1.3. |
| When Container is Held | Cargo Owner, Shipping Line, Yard, Delivery Service | Reason for holding, holding period, next delivery, choice of storage use | Confirm the applicability of Clause 1.4 with the insurance company. |
| During Long-Term Storage | Cargo Owner, Insurance Company, Insurance Agent, Warehouse Operator | Reason for delay, ongoing transportation plans, extension conditions and maximum duration | Notify in writing early and confirm additional coverage. |
| At Distribution or Sorting | Cargo Owner, Warehouse Operator, Sales Department | Store-specific distribution, stock allocation, sales destination decisions | Confirm the point when the cargo is outside the ordinary course of transit. |
| Before Continuation of Transportation Starts | Cargo Owner, Insurance Company, Insurance Agent, Carrier | Reattachment under Clause 2, additional transportation sections, approval documents | Do not start transportation before coverage is confirmed. |
| At Accident Occurrence | Cargo Owner, Insurance Company, Local Agent, Custodian | Accident time, cargo location, storage purpose and coverage termination point | Document the transportation status at the time of the accident as evidence. |
| When Notifying Third Parties | Carrier, Warehouse Operator, Terminal, Actual Carrier | Deadline for accident notification, reservation of liability and evidence preservation | Manage insurance claims and third-party claims separately. |
| When Settling Liability | Insurance Company, Cargo Owner, Maritime Lawyer, Related Parties | Ordinary cargo insurance, terrorism coverage, warehouse insurance, and liability claims | Separate the insurance period from liability matters clearly. |
Common Misunderstandings
| Misunderstanding | Actual Understanding | Points to Confirm |
|---|---|---|
| Adding JC2009/056 automatically provides terrorism coverage. | This clause does not grant coverage but limits the duration of existing terrorism coverage. | Confirm the formal terms that provide terrorism coverage. |
| If ordinary cargo insurance continues, terrorism coverage continues as well. | Under JC2009/056, terrorism coverage may terminate earlier than ordinary cargo insurance. | Review Clauses 1.1 through 1.6. |
| As long as goods are inside the container, they are always considered in transit. | If the container is used as storage outside the ordinary course of transit, Clause 1.4 becomes relevant. | Confirm the purpose of detention, responsible party, and the next planned transport. |
| Marine transport coverage always continues for 60 days after the vessel discharge. | The 60-day period is a maximum limit; other termination events may occur earlier. | Check final warehouse unloading, storage, distribution, and container usage. |
| Air transport coverage always continues for 30 days after aircraft unloading. | Coverage may terminate earlier due to causes listed in Clauses 1.1 to 1.4 even within 30 days. | Verify final warehouse location and storage purpose. |
| If cargo is awaiting customs clearance, it is in the ordinary course of transit regardless of the duration. | Confirm the reason for customs delay, causes of extension, and specific ongoing transportation plans. | Check customs instructions, document deficiencies, planned deliveries, and insurer notifications. |
| If the cargo has arrived at the final warehouse but is not yet delivered, coverage continues. | Clause 1.2 specifies that unloading completion at the final warehouse ends coverage. | Confirm the unloading completion time, not just the arrival time. |
| Distribution centers are transport facilities, so goods there are always in the ordinary course of transit. | Sorting by store or allocation to sales points may constitute Allocation or Distribution under Clause 1.3. | Confirm the actual purpose of use rather than the facility name. |
| If cargo moves again after storage, coverage automatically resumes. | Resumption under Clause 2 requires that continuous transport after storage is explicitly covered by the contract. | Review the insurance policy, additional approvals, and covered segments. |
| Notifying the insurer will always extend the coverage period. | Notification and approval are separate; additional conditions or premiums may be required. | Confirm written approval and Endorsement. |
| If an incident is reported as terrorism in the media, it qualifies as terrorism under the Clause. | Verify the actor, relationship with organizations, and political, ideological, or religious motives. | Cross-check official incident documents and Clause definitions. |
| If the freight forwarder advises continuation of coverage, the insurer is bound by it. | The final coverage scope is determined by the insurance policy, formal Clause wording, and insurer approval. | Separate the forwarder's explanation from the official insurance terms. |
Situations Where Maritime Lawyers or Specialists Should Be Consulted
- When there is a dispute over whether the incident qualifies as terrorism under the Clause
- When ordinary marine cargo insurance coverage continues, but the termination of terrorism coverage is contested
- When the boundary between the ordinary course of transit and storage for inventory or distribution purposes is disputed
- When the timing of termination under Clause 1.3 or Clause 1.4 is unclear
- When the completion date and time of unloading from the vessel or aircraft is disputed
- When the starting point for the 60-day marine or 30-day air period is contested
- When there is disagreement over whether coverage is reinstated under Clause 2
- When high-value cargo is damaged while consolidated at a port, airport, or logistics warehouse
- When marine cargo insurance, warehouse insurance, terrorism insurance, and carrier liability claims overlap
- When deadlines for accident notification, insurance claims, or litigation are approaching
Practical Points
- The article number for the Termination of Transit Clause (Terrorism) 2009 is JC2009/056.
- This clause does not provide terrorism coverage but restricts the termination point of existing coverage.
- This clause takes precedence over any conflicting provisions within the insurance contract.
- Terrorism coverage continues only while the cargo is in the ordinary course of transit.
- The earliest termination event among Clause 1.1 to Clause 1.6 applies.
- Terrorism coverage may terminate upon completion of unloading at the final warehouse or similar facility.
- Unloading at a separate warehouse used for storage, sorting, or distribution outside the ordinary course of transit also constitutes a termination event.
- If containers or similar equipment are chosen as the storage location, termination may occur even before unloading.
- For marine transport, the maximum limit is 60 days after completion of discharge from the vessel; for air transport, it is 30 days after unloading from the aircraft.
- The 60-day or 30-day periods are not automatically available without conditions.
- Resumption of transit after storage should be considered under Clause 2 only if explicitly covered under the contract.
- In cases of expected long-term storage, the insurer should be notified early to obtain written approval and confirm additional conditions.
- Freight forwarders should not assume coverage continuity but must confirm the official clause wording, unloading dates, storage purposes, and conditions for continuation of transit.
Summary
The Termination of Transit Clause (Terrorism) 2009 is a priority clause that limits coverage for damage caused by terrorism to the ordinary course of transit within a marine cargo insurance policy and defines the termination point of that coverage.
This clause is numbered JC2009/056, also referred to as JC56.
The clause itself does not newly grant terrorism coverage.
It assumes that loss or damage caused by terrorism is already covered under the insurance contract or its attached clauses and limits the coverage period accordingly.
Terrorism coverage ends at the earliest of the following: the termination date under the underlying transit clause, unloading at the final warehouse, storage or distribution outside the ordinary course of transit, use of containers or similar for storage, or the maximum time limits of 60 days for marine transport and 30 days for air transport.
Therefore, even if the ordinary cargo insurance coverage period is still valid, terrorism coverage may terminate earlier.
When cargo is held in a bonded warehouse, terminal, or distribution warehouse, it is necessary to confirm not only the facility’s name but also the purpose of storage, the concrete nature of continued transport, the party who opted for storage, and the next planned transport.
If containers, trailers, or transport vehicles are used as storage locations outside the ordinary course of transit, coverage may end even if the cargo remains inside the transport unit.
The 60-day limit for marine transport and 30-day limit for air transport are maximum caps and do not guarantee unconditional coverage of all storage within those periods.
If inland transport or any other continued transit begins after storage or the termination of coverage, it should be confirmed whether such transport is explicitly covered under the insurance contract.
If coverage is explicitly provided, consideration should be given to coverage recommencing under Clause 2 when the cargo reenters the ordinary course of transit, with Clause 1’s termination conditions applied again to that transport.
In the event of an incident or prolonged detention, early confirmation is needed regarding the existence of terrorism coverage, attachment of JC2009/056, dates of unloading from the vessel or aircraft, purpose of storage, use of containers, the plan for continued transit, and notification and approval by the insurer.
Final claims payment decisions will be made individually based on the insurance policy, the terrorism coverage clause, the Termination of Transit Clause (Terrorism) 2009, the transit clause, cause and timing of the incident, cargo location, storage purpose, and supporting documentation.
For transports requiring terrorism coverage, planned long-term storage, container detention, or continued transport after storage, prepare the insurance policy, the official wording of JC2009/056, transport plan, unloading schedule, storage purpose, and continuation segments, and consult with the insurer or an insurance agent specialized in marine cargo insurance.
This article provides general information and does not determine whether any specific incident qualifies as terrorism, whether terrorism coverage remains effective, whether claims will be paid, or whether parties bear legal liability.
