Analysis of JC2020-011 and JC2020-012

About JC2020-011 and JC2020-012

Released in April 2020 by the Joint Cargo Committee (JCC), JC2020-011 and JC2020-012 are Communicable Disease Exclusions that have been drafted for Marine Cargo policies.

Clause 1: the Communicable Disease Exclusion

Broadly, clause 1 of JC2020-011 and JC2020-012 exclude loss, damage or liability that has a connection with:

• a ‘Communicable Disease’; or
• the fear or threat of a ‘Communicable Disease’.

Causation not required for exclusion to apply; connection only

For the exclusion in Clause 1, the words ’caused by’, ‘contributed to by’, ‘resulting from’, ‘arising out of’ and ‘in connection with’ are used. Of these, ‘in connection with’ is the broadest since it may not require a causal relationship between the Communicable Disease and the loss, damage or liability for the exclusion to apply.

Clause 1 of JC2020-011 and JC2020-012 also states that the exclusion shall apply ‘regardless of any other cause or event contributing concurrently or in any other sequence thereto’. Even if a circumstance other than Communicable Disease was proximate cause of the loss, damage or liability, the exclusion will apply if there is a ‘connection’ with Communicable Disease.

JC2020-012: sub-limited exception

Unlike JC2020-011, JC2020-012 has an exception whereby the exclusion of Clause 1 does not apply to ‘charges that would otherwise be recoverable this insurance… to complete a marine transit insured hereunder’. Cover for these charges is to be subject to sub-limits that are specified in JC2020-012. As such, separate sub-limits can be specified for:

• each and every loss, or series of losses, arising out of one event; and,
• an annual aggregate.

If sub-limits for such charges are specified elsewhere in the underlying policy, then no sub-limits need to be entered in JC2020-012. In such cases, it would be preferable if the sub-limits provision in JC2020-012 was deleted.

Clause 2: definition of ‘Communicable Disease’

In JC2020-011 and JC2020-012, ‘Communicable Disease’ is defined as ‘any disease which can be transmitted… from any organism to another organism’.  Requiring the disease to be transmissible between organisms does qualify the scope of the definition; food poisoning, for example, would not be excluded because it is transmitted by the ingestion of contaminated food or water, not by a pathogen that is transmitted between organisms.

Beyond this,

• sub-clause 2.1 inclusively identifies types of pathogens;
• sub-clause 2.2 inclusively identifies means of transmission; and,
• sub-clause 2.3 identifies forms of disease (i.e. bodily injury, illness, damage to human health, human welfare or property).

None of these sub-clauses, however, are essential to the operation of the endorsement.