All Risks – No Cover For Non-Existent Cargo

Last month a decision was handed down in the matter of Englehart CTP (US) LLC v Lloyd's Syndicate 1221 in relation to marine cargo insurance and the scope of all risks insurance.

In brief summary, the decision confirms that:

• The words "this insurance covers all risks of loss of or damage to the subject-matter insured" in the risks clause of the Institute Cargo Clauses (A) 1/1/2009 (or similar all risks insuring conditions) refers only to the risk of physical loss of, or physical damage to, the insured goods;
• In the absence of very clear words in the policy, all risks insurance generally does not cover non-existent goods; the risk of measurement error or "paper loss"; or the risk of financial loss flowing from the acceptance of fraudulent documents of title to non-existent goods.