Report No. 21
Clause 71
General.-This deals with partial loss of freight. The proportion of the freight lost with reference to the whole freight at the risk of the assured has to be ascertained. That proportion of the sum fixed by the policy (if valued) or of the insurable value (if unvalued) is the measure of indemnity.
Clause 72
General.-This deals with partial loss of goods, etc.
The measure of indemnity is fixed with reference to "insurable value". Now, insurable value as defined1 is the prime cost of the property insured plus the expenditure etc. Insurable value is thus artificially frozen with reference to the value before the shipping of the goods. The result is that, if the market prices of the goods fall, the assured can nevertheless claim indemnity on the basis of the old value. Hence, "cargo claims have a tendency to be more frequent in times of commercial depression than when there is a heavy consumer demand."2
1. Section 16 (3), English Act-clause 13 (3).
2. Dover, p. 427.
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