Transit / Duration Clause
The transit/duration clause defines when cover for machinery, plant components or contract works attaches and terminates during transport, interim storage and erection, and governs the interface between marine cargo and construction/erection cover.
- Clause type
- Definition
- Origin/Market
- International programme
- Favours
- Neutral
- Negotiability
- Negotiable
Purpose
Construction and erection projects typically pass through several successive risk phases – manufacture, sea transit, inland transport, interim storage on site, and finally erection – which are often carried by different insurers (marine cargo insurers and CAR/EAR insurers). The transit/duration clause specifies precisely when and under what conditions cover under the construction or erection policy attaches and terminates, drawing on the attachment-and-termination logic familiar from marine cargo insurance, as set out for example by the transit clause in the Institute Cargo Clauses.
Effect and limits
A common attachment point is unloading at the destination or the start of erection work, with termination defined by expiry of a fixed period after unloading, or by storage outside the ordinary course of transit. Where the boundary is not clearly drawn, both double insurance and coverage gaps can arise at the interface, particularly where long-lead components are stored for months before erection actually begins.
Negotiation and practice
For projects with critical, long supply chains (such as transformers or turbines), policyholders frequently negotiate an extended transit phase or seamless follow-on cover for interim storage, so that the interface with the construction/erection policy carries no gap in protection. Clear contractual coordination with the separate marine cargo insurer is essential, so that responsibilities do not conflict in the event of a loss during the transitional phase.