ISBP 745 E E5: Warehouse-to-Warehouse Coverage Clause

Introduction

The warehouse-to-warehouse coverage clause is a standard provision in marine cargo insurance that extends coverage from the moment goods leave the warehouse at the place named in the credit until they arrive at the warehouse at the destination named in the credit. ISBP 745 paragraph E5 addresses the treatment of this clause when it appears on insurance documents presented under documentary credits. When the insurance document indicates warehouse-to-warehouse coverage but excludes the point of origin or destination specified in the credit, the coverage is deficient. This guide explains the clause, its implications under UCP 600 and ISBP 745, and how practitioners should evaluate it.

Failure Mode Analysis

FM1: Insurance Document Shows Warehouse-to-Warehouse Coverage Excluding Origin Warehouse

The insurance document states "warehouse-to-warehouse coverage, excluding the warehouse at [origin city]." If the credit specifies the origin warehouse, this exclusion violates ISBP 745 E5. The insurance does not cover the full transit from the point of origin.

FM2: Insurance Document Shows Warehouse-to-Warehouse Coverage Excluding Destination Warehouse

The insurance document states "warehouse-to-warehouse coverage, excluding the warehouse at [destination city]." If the credit specifies the destination warehouse, this exclusion violates ISBP 745 E5. The insurance does not cover the final leg to the destination.

FM3: Insurance Document Does Not Mention Warehouse-to-Warehouse Clause

The credit requires warehouse-to-warehouse coverage, but the insurance document does not contain this clause. The absence of the clause does not necessarily mean coverage is excluded — but without the clause, the insurance may not extend to the warehouse points. Under ISBP 745 E5, the bank examines the clause's presence and any stated exclusions.

FM4: Insurance Document Contains Contradictory Clauses

The insurance document includes both a warehouse-to-warehouse clause and a separate clause limiting coverage to "from port to port." The contradictory clauses create uncertainty about the scope of coverage. Under ISBP 745 A2, data in a document must not conflict with itself.

FM5: Insurance Document Indicates Coverage From "Named Warehouse" But Credit Names Different Origin

The insurance document covers goods from "Warehouse ABC" but the credit specifies the origin as "Warehouse XYZ." Even though the insurance appears to cover from a warehouse, it covers the wrong warehouse. ISBP 745 E5 requires coverage from the point of origin named in the credit.

Deterministic Resolution Architecture

Step 1: Determine Whether the Credit Requires Warehouse-to-Warehouse Coverage

Read the credit and the applicable Incoterms term to determine whether warehouse-to-warehouse coverage is required:
- CIP: Required by Incoterms 2020.
- CIF: Required by Incoterms 2020 (during carriage).
- Other terms: Check the credit's insurance clause.

Step 2: Locate the Warehouse-to-Warehouse Clause on the Insurance Document

Examine the insurance document for any clause referencing warehouse-to-warehouse coverage. Look for phrases such as "warehouse to warehouse," "from warehouse at origin to warehouse at destination," or "from store to store."

Step 3: Check for Exclusions

If the insurance document includes a warehouse-to-warehouse clause, examine it for any exclusions:
- Does the clause exclude the origin warehouse? If so, and the credit names the origin warehouse, this violates E5.
- Does the clause exclude the destination warehouse? If so, and the credit names the destination warehouse, this violates E5.
- Does the clause exclude any transit points between origin and destination? This may or may not be a discrepancy depending on the credit's requirements.

Step 4: Verify Origin and Destination Match the Credit

Compare the warehouse locations mentioned in the insurance document's clause against the credit's specified origin and destination. The insurance must cover from the credit's origin warehouse to the credit's destination warehouse.

Step 5: Check for Contradictory Clauses

Ensure the insurance document does not contain clauses that contradict the warehouse-to-warehouse coverage. A port-to-port limitation, for example, would narrow the coverage and may violate E5.

Step 6: Assess the Practical Impact

If the insurance excludes a warehouse point, the buyer's risk during that segment is uninsured. This is the commercial harm that E5 is designed to prevent.

Step 7: Issue the Refusal Notice

If the insurance document violates E5:
- State: "Insurance document indicates warehouse-to-warehouse coverage but excludes [point], contrary to ISBP 745 E5."
- Include the reference in the UCP 600 Art 16(d) notice.

Conclusion

The warehouse-to-warehouse coverage clause is integral to ensuring that insurance protection spans the entire transit from origin to destination. ISBP 745 E5 mandates that any such clause must not exclude the points named in the credit. Practitioners should verify the clause's scope against the credit's origin and destination before presentation, as exclusions within the clause create coverage gaps that the bank will identify as discrepancies.

FAQ

Q1: Does the bank verify the actual insurance coverage or only the document's face?

The bank examines the insurance document on its face under UCP 600 Art 14(a). It does not contact the insurer to verify the actual coverage. The bank applies the document's terms as stated.

Q2: Can the insurance document state "warehouse to warehouse" without naming specific warehouses?

Yes, if the clause does not exclude the points named in the credit. A general "warehouse to warehouse" clause without specific exclusions is compliant under E5. The exclusion is the issue, not the naming.

Q3: What if the credit does not specify a destination warehouse?

If the credit does not name a destination warehouse, E5 does not require the insurance to cover a specific destination. The clause must cover from the origin named in the credit (if any).

Q4: Is a "transit" clause equivalent to a warehouse-to-warehouse clause?

Not necessarily. A "transit" clause may cover only from port to port or from loading to unloading, which is narrower than warehouse-to-warehouse. The insurance document must indicate coverage from the origin warehouse to the destination warehouse to satisfy E5.

Q5: Can the beneficiary amend the insurance document to add warehouse-to-warehouse coverage after presentation?

The beneficiary can request the insurer to issue an amended insurance document before the credit expires. If the amendment adds warehouse-to-warehouse coverage and eliminates the exclusions, the amended document may cure the discrepancy.

Source Notes

Context only — no direct article text was extracted from these sources during research:

• ICC Academy — Certified UCP 600 Specialist (CUCP) (ICC Academy, 2025)
• ICC — UCP 600 Including eUCP Version 2.1 (International Chamber of Commerce, 2023)
• ICC — ISBP 745: International Standard Banking Practice (International Chamber of Commerce, 2013, updated 2020)