Selected hull and machinery clauses Flashcards
Port risks - Navigation Cl 1
Navigation cover is limited to inside a port
- NAVIGATION
1.1 The vessel has leave to proceed to and from any wet or dry docks harbours ways cradles and pontoons, within the limits specified in this insurance.
1.2 The vessel is held covered in case of deviation or change of voyage, provided notice be given immediately after receipt of advices and any amended terms of cover and any additional premium required be agreed.
Similar to ITC hulls, but does not cover earthquake/volcanic eruption.
Port risks - P&I Cover Cl 10
10.1 The Underwriters agree to indemnify the Assured for any sum or sums paid
by the Assured to any other person or persons by reason of the Assured
becoming legally liable, as owner of the vessel, for any claim, demand,
damages and/or expenses, where such liability is in consequence of any of
the following matters or things and arises from an accident or occurrence
during the period of this insurance:
10.1.1 loss of or damage to any fixed or movable object or property or other
thing or interest whatsoever, other than the vessel, arising from any
cause whatsoever in so far as such loss or damage is not covered by
Clause 8
10.1.2 any attempted or actual raising, removal or destruction of any fixed or
movable object or property or other thing, including the wreck of the
vessel, or any neglect or failure to raise, remove, or destroy the same
10.1.3 liability assumed by the Assured under contracts of customary towage
for the purpose of entering or leaving port or manoeuvring within the
port during the ordinary course of trading
10.1.4 loss of life, personal injury, illness or payments made for life salvage
10.1.5 liability under Clause l(a) of the current Lloyd’s Standard Form of
Salvage Agreement in respect of unsuccessful, partially successful, or
uncompleted services if and to the extent that the salvor’s expenses
plus the increment exceed any amount otherwise recoverable under
the Agreement.
10.2 The Underwriters agree to indemnify the Assured for any of the following
arising from an accident or occurrence during the period of this insurance:
10.2.1 the additional cost of fuel, insurance, wages, stores, provisions and
port charges reasonably incurred solely for the purpose of landing
from the vessel sick or injured persons or stowaways, refugees, or
persons saved at sea
10.2.2 additional expenses brought about by the outbreak of infectious
disease on board the vessel or ashore
10.2.3 fines imposed on the vessel, on the Assured, or on any Master Officer
crew member or agent of the vessel who is reimbursed by the
Assured, for any act or neglect or breach of any statute or regulation
relating to the operation of the vessel, provided that the Underwriters
shall not be liable to indemnify the Assured for any fines which result
from any act neglect failure or default of the Assured their agents or
servants other than Master Officer or crew member
10.2.4 the expenses of the removal of the wreck of the vessel from any place
owned, leased or occupied by the Assured
10.2.5 legal costs incurred by the Assured, or which the Assured may be
compelled to pay, in avoiding, minimising or contesting liability with
the prior written consent of the Underwriters.
Port risks - insured perils Cl 5
Similar to ITC hulls, but does not cover earthquake/volcanic eruption - excluded under clause 6
The Institute Voyage Clauses – Hulls - main differences
Has same insured perils
Does not contain continuation (clause 2)
Does not have breach of warranty (clause 3)
Does not have termination (clause 4)
Different terms for navigation (cl 1) & Change of voyage (cl 2) & classification (cl 3)
The Institute Voyage Clauses – Hulls - Navigation Cl 1
1.1 The vessel is covered subject to the provisions of this insurance at all times and has leave to sail or navigate with or without pilots, to go on trial trips and to assist and tow vessels or craft in distress, but it is warranted that the vessel shall not be towed, except as is customary or to the first safe port or place when in need of assistance, or undertake towage or salvage services under a contract previously arranged by the Assured and/or Owners and/or Managers and/or Charterers. This Clause 1.1 shall not exclude customary towage in connection with loading and discharging.
1.2 This insurance shall not be prejudiced by reason of the Assured entering into any contract with pilots or for customary towage which limits or exempts the liability of the pilots and/or tugs and/or towboats and/or their owners when the Assured or their agents accept or are compelled to accept such contracts in accordance with established local law or practice.
1.3 The practice of engaging helicopters for the transportation of personnel, supplies and equipment to and/or from the vessel shall not prejudice this insurance.
1.4 In the event of the vessel being employed in trading operations which entail cargo loading or discharging at sea from or into another vessel (not being a harbour or inshore craft) no claim shall be recoverable under this insurance for loss of or damage to the vessel or liability to any other vessel arising from such loading or discharging operations, including whilst approaching, lying alongside and leaving, unless previous notice that the vessel is to be employed in such operations has been given to the Underwriters and any amended terms of cover and any additional premium required by them have been agreed.
The Institute Voyage Clauses – Hulls - Change of voyage Cl 2
Held covered in case of deviation or change or voyage or any breach of warranty as to towage or salvage services, provided notice be given to the Underwriters immediately after receipt of advices and any amended terms of cover and any additional premium required by them be agreed.
The Institute Voyage Clauses – Hulls - Classification Cl 3
3.1 It is the duty of the Assured, Owners and Managers at the inception of and throughout the period of this insurance to ensure that
3.1.1 the vessel is classed with a Classification Society agreed by the Underwriters and that her class within that Society is maintained,
3.1.2 any recommendations requirements or restrictions imposed by the vessel’s Classification Society which relate to the vessel’s seaworthiness or to her maintenance in a seaworthy condition are complied with by the dates required by that Society.
3.2 In the event of any breach of the duties set out in Clause 3.1 above, unless the Underwriters agree to the contrary in writing, they will be discharged from liability under this insurance as from the date of the breach provided that if the vessel is at sea at such date the Underwriters’ discharge from liability is deferred until arrival at her next port.
3.3 Any incident condition or damage in respect of which the vessel’s Classification Society might make recommendations as to repairs or other action to be taken by the Assured, Owners and Managers must be promptly reported to the Classification Society.
3.4 Should the Underwriters wish to approach the Classification Society directly for information and/or documents, the Assured will provide the necessary authorization.
The Institute Fishing Vessel Clauses 20/7/87 - Main differences
Differences in Navigation (Cl 1)
Has a fishing gear clause (15)
P&I clause (20)
Different exclusions
The Institute Fishing Vessel Clauses 20/7/87 - Navigation & Removal ashore (Cl 1)
- NAVIGATION AND REMOVALS ASHORE
1.1 The vessel is covered subject to the provisions of this insurance at all times and has leave to sail or navigate with or without pilots, to go on trial trips and to assist and tow vessels or craft in distress, but it is warranted that with the exception of catch the vessel shall not carry cargo or containers for the carriage of cargo and shall not be towed, except as is customary or to the first safe port or place when in need of assistance, or undertake towage or salvage services under a contract previously arranged by the Assured and/or Owners and/or Managers and/or Charterers. This Clause 1.1 shall not exclude customary towage in connection with loading and discharging.
1.2 Any part or parts of the subject-matter insured are covered subject to the provisions of this insurance whilst ashore for the purpose of repair, overhaul or refitting, including transit from and to the vessel.
1.3 In the event of the vessel sailing with an intention of being (a) broken up, or (b) sold for breaking up, any claim for loss of or damage to the vessel occurring subsequent to such sailing shall be limited to the market value of the vessel as scrap at the time when the loss or damage is sustained, unless previous notice has been given to the Underwriters and any amendments to the terms of cover, insured value and premium required by them have been agreed. Nothing in this Clause 1.3 shall affect claims under Clauses 8, 18 or 20.
The Institute Fishing Vessel Clauses 20/7/87 - Fishing gear Cl 15
- No claim to attach hereto for loss of or damage to fishing gear unless
15.1 caused by fire lightning or violent theft by persons from outside the Vessel
15.2 totally lost as a result of the total loss of the Vessel by insured perils
The Institute Fishing Vessel Clauses 20/7/87 - P&I Cl 20
20.1 The Underwriters agree to indemnify the Assured for any sum or sums paid by the Assured to any other person or persons by reason of the Assured becoming legally liable, as owner of the Vessel, for any claim, demand, damages and/or expenses, where such liability is in consequence of any of the following matters or things and arises from an accident or occurrence during the period of this insurance:
20.1.1 loss of or damage to any fixed or movable object or property or other thing or interest whatsoever, other than the Vessel, arising from any cause whatsoever in so far as such loss or damage is not covered by Clause 18
20.1.2 any attempted or actual raising, removal or destruction of any fixed or movable object or property or other thing, including the wreck of the Vessel, or any neglect or failure to raise, remove or destroy the same
20.1.3 liability assumed by the Assured under contracts of customary towage for the purpose of entering or leaving port or manoeuvring within the port during the ordinary course of trading
20.1.4 loss of life, personal injury, illness or payments made for life salvage
20.1.5 (a) hospital medical and burial expenses of Master Officers or Crew
(b) repatriation expense of Master Officers or Crew (other than wages, remuneration in the nature of wages, or any expenses which ensue from the termination of an agreement, sale of the Vessel or any other act of the Assured)
20.2 The Underwriters agree to indemnify the Assured for any of the following arising from an accident or occurrence during the period of this insurance:
20.2.1 the additional cost of fuel, insurance, wages, stores, provisions and port charges reasonably incurred solely for the purpose of landing from the Vessel sick or injured persons or stowaways, refugees, or persons saved at sea
20.2.2 additional expenses brought about by the outbreak of infectious disease on board the Vessel or ashore
20.2.3 fines imposed on the Vessel, on the Assured, or on any Master Officer crew member or agent of the Vessel who is reimbursed by the Assured, for any act or neglect or breach of any statute or regulation relating to the operation of the Vessel, provided that the Underwriters shall not be liable to indemnify the Assured for any fines which result from any act neglect failure or default of the Assured their agents or servants other than Master Officer or crew member
20.2.4 the expenses of the removal of the wreck of the Vessel from any place owned, leased or occupied by the Assured
20.2.5 legal costs incurred by the Assured, or which the Assured may be compelled to pay, in avoiding, minimising or contesting liability with the prior written consent of the Underwriters.
The Institute Fishing Vessel Clauses 20/7/87 - P&I Cl 20 Exclusions & Provided always that
EXCLUSIONS
20.3 Notwithstanding the provisions of Clauses 20.1 and 20.2 this Clause 20 does not cover any liability cost or expense arising in respect of:
20.3.1 any direct or indirect payment by the Assured under workmen’s compensation or employers’ liability acts and any other statutory or common law, general maritime law or other liability whatsoever in respect of accidents to or illness of workmen or any other persons employed in any capacity whatsoever by the Assured or others in on or about or in connection with the Vessel or her catch, materials or repairs
20.3.2 liability assumed by the Assured under agreement expressed or implied in respect of death or illness of or injury to any persons employed under a contract of service or apprenticeship by the other party to such agreement
20.3.3 punitive or exemplary damages, however described
20.3.4 passengers
20.3.5 catch, fishing gear or other things or interests whatsoever on board the insured Vessel or the engagements of the insured Vessel but this Clause
20.3.5 shall not exclude any claim in respect of the extra cost of removing catch or property from the wreck of the Vessel
20.3.6 property, owned by builders or repairers or for which they are responsible, which is on board the Vessel
20.3.7 liability arising under a contract or indemnity in respect of containers, equipment fuel or other property on board the Vessel and which is owned or leased by the Assured
20.3.8 cash, negotiable instruments, precious metals or stones, valuables or objects of a rare or precious nature, belonging to persons on board the Vessel, or non-essential personal effects of any Master Officer or crew member
20.3.9 fuel, insurance, wages, stores, provisions and port charges arising from delay to the Vessel while awaiting a substitute for any Master Officer or crew member
20.3.10 fines or penalties arising from overloading or illegal fishing
20.3.11 Pollution or contamination of any real or personal property or thing whatsoever
20.3.12 General average, sue and labour and salvage charges, salvage, and/or collision liability to any extent that they are not recoverable under Clauses 8, 10 and 18 by reason of the agreed value and/or the amount insured in respect of the Vessel being inadequate.
20.4 The indemnity provided by this Clause 20 shall be in addition to the indemnity provided by the other terms and conditions of this insurance.
20.5 Where the Assured or the Underwriters may or could have limited their liability the indemnity under this Clause 20 in respect of such liability shall not exceed Underwriters’ proportionate part of the amount of such limitation.
20.6 In no case shall the Underwriters’ liability under this Clause 20 in respect of each separate accident or occurrence or series of accidents arising out of the same event, exceed their proportionate part of the insured value of the Vessel.
20.7 PROVIDED ALWAYS THAT
20.7.1 Prompt notice must be given to the Underwriters of every casualty event or claim upon the Assured which may give rise to a claim under this Clause 20 and of every event or matter which may cause the Assured to incur liability costs or expense for which he may be insured under this Clause 20.
20.7.2 the Assured shall not admit liability for or settle any claim for which he may be insured under this Clause 20 without the prior written consent of the Underwriters.
The Institute Yacht Clauses 1/1/85 - Main differences
Perils Clause 9 different
Exclusions Clause 10 different
The Institute Yacht Clauses 1/1/8 - Perils Cl 9
9 PERILS
Subject always to the exclusions in this insurance
9.1 This insurance covers loss of or damage to the subject matter insured caused by:
9.1.1 Perils of the seas, rivers, lakes, or other navigable waters
9.1.2 Fire
9.1.3 Jettison
9.1.4 Piracy
9.1.5 Contact with dock or harbour equipment of installation, land conveyance, aircraft or similar objects or objects falling there from
9.1.6 Earthquake Volcanic eruption or lightning
9.2 and, provided such loss or damage has not resulted from want of due diligence by the assured Owners or Managers, this insurance covers
9.2.1 Loss of or damage to the subject matter insured caused by
9.2.1.1 Accidents in loading, discharging or moving stores, gear, equipment, machinery or fuel
9.2.1.2 Explosions
9.2.1.3 Malicious Acts
9.2.1.4 Theft of the entire Vessel or her boat(s) or outboard motor(s) provided it is securely locked to the vessel or her boat(s) by an anti-theft device in addition to its normal method of attachment, or following upon forcible entry into the Vessel or place of storage or repair, theft of machinery including outboard motor(s), gear or equipment
9.2.2 Loss of or damage to the subject matter insured, excepting motor and connections (but not strut, shaft or propeller), electrical equipment and batteries and connections, caused by:
9.2.2.1 Latent defects in hull or machinery, breakage of shafts or bursting of boilers (excluding the cost and expense of replacing or repairing the defective part broken shaft or burst boiler)
9.2.2.2 The negligence of any person whatsoever, but excluding the cost of making good any defect resulting from either negligence of breach of contract in respect of any repair or alteration work carried out for the account of the assured and/or the Owners or in respect of the maintenance of the Vessel,
9.3 This insurance covers the expense of sighting the bottom after stranding, if reasonable incurred especially for that purpose, even if no damage is found.
The Institute Yacht Clauses 1/1/8 - Exclusions Cl 10
10 EXCLUSIONS
No claim shall be allowed in respect of any:
10.1 Outboard motor dropping off or falling overboard
10.2 Ship’s boat having a maximum designed speed exceeding 17 knots, unless such boat is specially covered herein and subject also to the conditions of the speedboat Clause 19 below, or is on the parent Vessel or laid up ashore
10.3 Ship’s boat not permanently marked with the name of the parent Vessel
10.4 Sails and protective covers split by the wind or blown away while set, unless in consequence of damage to the spars to which sails are bent, or occasioned by the Vessel being stranded or in collision or contact with any external substance (ice included) other than water
10.5 Sails, masts, spars or standing and running rigging while the Vessel is racing, unless the loss or damage is caused by the Vessel being stranded, or sunk burnt, on fire or in collision or contact with any external substance (ice included) other than water
10.6 Personal effect
10.7 Consumable stores, fishing gear or moorings
10.8 Consumable stores, fishing gear or moorings
10.9 Loss or expenditure incurred in remedying a fault in design or construction or any cost of expense incurred by reason of betterment of alteration in design or construction
10.10 Motor and connections (but not strut shaft or propeller) electrical equipment and batteries and connections, where the loss of damage has caused by heavy weather, unless the loss or damage has been caused by the Vessel being immersed, but this clause 10.10 shall not exclude loss or damage caused by the Vessel being stranded or in collision or contact with another vessel, pier or jetty.
American Institute Hull Clauses (September 29, 2009) - Cover provided for loss of damage caused by latent defect etc.
ADDITIONAL PERILS (INCHMAREE)
Subject to the conditions of this Policy, this insurance also covers loss of or damage to the Vessel directly caused by the following:
Accidents in loading, discharging or handling cargo, or in bunkering;
Accidents in going on or off, or while on drydocks, graving docks, ways, gridirons or pontoons;
Explosions on shipboard or elsewhere;
Breakdown of motor generators or other electrical machinery and electrical connections thereto, bursting of boilers, breakage of
shafts, or any latent defect in the machinery or hull, (excluding the cost and expense of replacing or repairing the defective part);
Breakdown of or accidents to nuclear installations or reactors not on board the insured Vessel;
Contact with aircraft, rockets or similar missiles, or with any land conveyance;
Negligence of Charterers and/or Repairers, provided such Charterers and/or Repairers are not an Assured hereunder;
Negligence of Masters, Officers, Crew or Pilots;
provided such loss or damage has not resulted from want of due diligence by the Assured, the Owners or Managers of the Vessel, or any of
them. Masters, Officers, Crew or Pilots are not to be considered Owners within the meaning of this clause should they hold shares in the
Vessel
Note also: AIHC covers piracy in named perils, but then specifically excludes it as a war risk later on in the form.
AIHC covers loss or damage caused by ‘breakdown of motor generators or other electrical machinery’.
Nb. This does not cover damage to part itself, only consequential damage caused by its breakdown – just like in ITC.
AIHC covers damage caused by latent defect but specifically excludes cost of repairing or replacing the defective part.
American Institute Hull Clauses (September 29, 2009) - Treatment of sue and labour costs incurred in the context of a constructive total loss
(is subject to underinsurance)
AIHC specifically states that expenses incurred prior to giving Notice of Abandonment and which will be claimed under the Sue and Labour clause, cannot be ranked in determining whether there is a constructive total loss.
(If you use these charges in order to reach a CTL, you will not then be able to claim them as sue and labour on top of the CTL).
(If you’ve reached a CTL on damage alone, so S&L was not ranked in reaching that CTL, then you can claim the S&L on top of the CTL).
If claim for Total Loss is admitted under this Policy and sue and labor expenses have been reasonably incurred in excess of any proceeds realized or value recovered, the amount payable under this Policy will be the proportion of such excess that the amount insured hereunder (without deduction for loss or damage) bears to the Agreed Value or to the sound value of the Vessel at the time of the accident, whichever value was greater; provided always that Underwriters’ liability for such expenses shall not exceed their proportionate part of the Agreed Value. The foregoing shall also apply to expenses reasonably incurred in salving or attempting to salve the Vessel and other property to the extent that such expenses shall be regarded as having been incurred in respect of the Vessel
American Institute Hull Clauses (September 29, 2009) - Extent of cover for collision liabilities
Dealt in a similar was to ITC but 4/4 collision liability allowed
American Institute Hull Clauses (September 29, 2009) - The treatment of recoveries
Under ITC any recovery is credited in full to the insurers up to the amount of the net claim paid by insurers. (ie. deductible remains in place)
Under AIHC deductible is apportioned between insurers and the assured in the ratio the recovery bears to the original gross claim, less the recovery. (See Wilson book p 157 for examples of how this apportionment works).
ITC therefore more generous to the insurers, AIHC more generous to the assured.
Note deductibles:
Under ITC where you have a total loss, the deductible does not apply, and nor does it apply to Sue and Labour charges but does apply to any collision liability arising from same incident.
Under AIHC where you have a total loss, the deductible
American Hull Syndicate Liner Negligence Clause FOR ATTACHMENT TO AMERICAN INSTITUTE HULL CLAUSES
(June 2, 1977)
In consideration of additional premium of INCLUDED, it is understood and agreed that the ADDITIONAL PERILS (INCHMAREE) clause of the attached Policy is deleted and in place thereof the following inserted:
“Subject to the conditions of this Policy, this insurance also covers:
a Breakdown of motor generators or other electrical machinery and electrical connections thereto; bursting of boilers; breakage of shafts; or any latent defect in the machinery or hull;
b Loss of or damage to the subject matter insured directly caused by:
- Accidents on shipboard or elsewhere, other than breakdown of or accidents to nuclear installations or reactors on board the Insured Vessel;
- Negligence, error of judgment or incompetence of any person;
excluding under both “a” and “b” above only the cost of repairing, replacing or renewing any part condemned solely as a result of a latent defect, wear and tear, gradual deterioration or fault or error in design or construction;
provided such loss or damage (either as described in said “a” or “b” or both) has not resulted from want of due diligence by the Assured(s), the Owner(s) or Manager(s) of the Vessel, or any of them. Masters, mates, engineers, pilots or crew not to be considered as part owners within the meaning of this clause should they hold shares in the Vessels”
All other terms and conditions remaining unchanged.
Nordic Marine Insurance Plan - All risks cover with exclusions (Cl 2.8)
Cl 2.8. An insurance against marine perils covers all perils to which the interest may be exposed, with the exception of:
a. perils covered by an insurance against war perils in accordance with Cl. 2-9,
b. capture at sea, confiscation, expropriation and other similar interventions by own State power provided any such intervention is made for the furtherance of an overriding national political objective. Own State power is understood to mean the State power in the vessel’s State of registration or in the State where the major ownership interests are located. Own State power does not include individuals or organisations exercising supranational authority,
c. requisition by State power,
d. insolvency or lack of liquidity of the assured or the operation of ordinary legal process to enforce payment of any fine, penalty, debt or right to security unrelated to a claim or liability covered by the insurance,
e. perils covered by the RACE II Clause:
1. ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel,
2. the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof,
3. any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter,
4. the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter. The exclusion in this sub-clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes,
5. any chemical, biological, bio-chemical, or electromagnetic weapon.
Nordic Marine Insurance Plan - Incidence of loss Cl 2.11
Clause 2-11. Causation. Incidence of loss
The insurer is liable for loss incurred when the interest insured is struck by an insured peril during the insurance period.
If an unknown defect results in damage to the insured vessel, the defect shall be deemed to be a marine peril that strikes the interest insured at the time the damage starts to develop.
If unknown damage in one part of the vessel results in damage to another part or parts of the vessel, the original damage shall be deemed to be a marine peril that strikes the interest insured at the time the damage to the other part or parts starts to develop.
Where a defect or damage existing at the inception of the insurance, which is known to the assured but not to the insurer, gives rise to damage (in the case of defects) or new damage to other parts (in the case of existing damage), the liability of the insurer shall not exceed the amount the assured would have been able to recover under the insurance on risk at the time the assured first acquired knowledge of the relevant defect or damage.
Nordic Marine Insurance Plan - Extent of cover for collision liabilities Cl 13.1-13.4
Clause 13-1. Scope of liability of the insurer
The insurer will indemnify the assured for loss which is a result of liability imposed on the assured due to collision or striking by the vessel, its accessories, equipment or cargo, or by a tug used by the vessel.
(4/4)
However, the insurer will not cover:
a. liability arising while the vessel is engaged in towing, or caused by the towage, unless this takes place in connection with a salvage operation referred to in Cl. 3-12, sub-clause 2,
b. liability for personal injury or loss of life,
c. other loss suffered by passengers or crew on the insured vessel,
d. liability for damage to or loss of cargo, other effects on board the insured vessel, or equipment which the vessel uses,
e. liability to charterers or others who have an interest in the insured vessel,
f. liability for pollution damage and damage resulting from fire or explosion caused by oil or other liquid or volatile substances, contamination damage caused by radioactive substances and damage to coral reefs and other environmental damage. The insurer is nevertheless liable if, in the event of a collision with another vessel, liability is imposed on the assured for such damage to the other vessel with equipment and cargo,
g. liability for loss caused by cargo or bunkers after grounding or striking against ice,
h. liability for loss caused by the vessel’s use of anchor, mooring and towing gear, loading and discharging appliances, gangways and the like, and liability for damage to or loss of these objects,
i. liability for removal of the wreck of the insured vessel and for obstructions to traffic created by the insured vessel,
j. refund of amounts which a third party has paid by way of compensation for loss as mentioned under sub-clauses (a) to (i) above.
Clause 13-2. Limitation of liability based on tonnage or value of more than one vessel
If the assured’s liability is limited on the basis of the tonnage or value of more than one vessel, and these vessels are insured with different insurers, each individual insurer is liable for such proportion of the liability as corresponds to the tonnage or value of the vessel in question.
Clause 13-3. Maximum liability of the insurer in respect of any one casualty
The insurer is liable up to an amount equivalent to the sum insured in respect of liability for damages arising from any one casualty.
Clause 13-4. Deductible
For each casualty the amount stated in the insurance contract shall be deducted.
Litigation costs, cf. Cl. 4-4, costs in connection with the claims settlement, cf. Cl. 4-5, and loss arising from measures to avert or minimise the loss, cf. Cl. 4-7 to Cl. 4-12, are recoverable without any deductible.
Nordic Marine Insurance Plan - Clause 12-14. Apportionment of common expenses
Clause 12-14. Apportionment of common expenses
If expenses have been incurred which are common to repair work for which the insurer is liable and work which is not covered by the insurance, these expenses shall be apportioned on the basis of the cost of each category of work. However, dry dock charges and quay rental shall be apportioned on the basis of the time that the recoverable and the non-recoverable work would have required if each category of work had been carried out separately.
Common repair expenses to be apportioned on a cost basis are as a main rule exemplified as follows;
* Fire watch and fire lines
* Port dues
* Agency fee (general) for the repair stay
* Owners’ superintendence (see also Cl. 4-5)
* ISPS watchmen
* Tank cleaning
* Gas freeing / gas free certificates
* Removal expenses (see also Cl. 12-13)
* 50% of telephone expenses
* Electric power allocated to repairs
General expenses – apportioned over gross repair cost for each class of work (total for each casualty/total of all repairs conducted)
Apportion common expenses over: gross cost of repairs and owners work at the yard, cost of spare parts and transport of same, labour (but not supt or class), DD
Removal expenses- if one separate damage necessitates the immediate removal of the vessel, then the total costs of removal shall be charged to that damage (accessorial expense). If non damage repairs require immediate removal, then the costs are to be shared between all classes of the work carried out at the yard
Electric current supplied – if given as a total amount, then 50% charged to SOP, and remaining half shall be apportioned between the classes of work in the same way as above
Superintendence – underwriters will permit an allowance for the(one) superintendent daily fee/wage, his social expenses, holiday allowance, daily diet, hotel expenses and travelling expenses – apportionment of which is done on a time basis – this is limited to the time for repairs and travelling time/costs and costs n connection with settlement of invoices.
Costs for planning of repairs prior to arrival and admin costs not allowed)
Drydocking expenses are apportioned on a time basis – according to the total time which each set of repairs would have taken if carried out separately. It does not make a difference whether owner’s work are necessary or not for class or seaworthiness
(D5 more favourable – as allows owners to take incidental advantage
(if insurers work takes X, and owners take y, the insurers will be liable for (X/(X+Y)) ppn of the dock dues)
(If 2 insurers work (X(longer) and S(shorter)) and insurers Y. You first ppn out the DD expenses to owners as (Y/(X+Y)). Then the remaining amount shall be apportioned between insurers, aka (X/(X+S)) and (S/(X+S))
Common expenses divided over time necessary in DD if carried out seperately:
- Ballast water
- Pilotage to/from DD
- Tuggage to/form DD
- Boatmen
- Dock master
- In/out of DD
- Daily DD charges
- Adjusting of blocks (but can be attributed solely to a casualty, if carried out seperately, e.g for bottom damage)
- Coke-fires in DD
(+wharfage but done put this into docking coloum, jusy do it manually straight into UW/owners)
Nordic Marine Insurance Plan - Calculation of constructive total loss Cl 11.3
Clause 11-3. Condemnation
The assured may claim compensation for a total loss if the conditions for condemnation of the vessel are met.
The conditions for condemnation are met when casualty damage is so extensive that the cost of repairing the vessel will amount to at least 80 % of the insurable value, or of the value of the vessel after repairs if the latter is higher than the insurable value. If two or more insurances have been effected against the same perils but with different valuations, the highest valuation shall form the basis of the calculation.
The value of the vessel after repairs shall be determined on the basis of the market value at the time when the assured makes his request for a condemnation.
Casualty damage shall be deemed to include only such damage as has been reported to the insurer concerned and surveyed by him in the course of the last three years prior to the casualty that gives rise to the request for condemnation. Costs of repairs are deemed to include all costs of removal and repairs which, at the time when the request for condemnation is submitted, must be anticipated if the vessel is to be repaired except, however, salvage awards or compensation for depreciation in value under Cl. 12-1, sub-clause 4.
Nordic Marine Insurance Plan - Addition of interest to quantum of claim Cl 5.4
Clause 5-4. Interest on the compensation
The assured may claim interest as from one month after the date on which notice of the casualty was sent to the insurer. If the insurer has to refund the assured’s disbursements, interest accrues from the date of the disbursement. If the insurer is to indemnify the assured for loss of time, interest does not accrue until one month after expiry of the period for which the insurer is liable.
If the assured fails to provide information and documents as mentioned in Cl. 5-1, and the settlement as a result thereof is delayed, he may not claim interest for the resulting loss of time. The same applies if the assured unjustifiably rejects full or part settlement.
The annual rate of interest is six month CIBOR, NIBOR or STIBOR + 2 percentage points for insurance contractsdr76f in which the sum insured is stated in Danish Kroner, Norwegian Kroner or Swedish Kronor respectively, and otherwise six month LIBOR + 2 percentage points, but minimum 2 percentage points. Interest is determined as at January 1 of the year the insurance contract comes into effect at the average rate for the last two months of the preceding year.
After the due date, cf. Cl. 5-6, interest on overdue payments accrues according to the rate stated in sub-clause 3 + 2 percentage points.
