Policy Forms
- Institute hull clauses 01.11.2003 and 01.11.2002
- Section 55 mia 1906
- Institute time clauses - hulls cl 280 (01.11.95)
- Institute additional perils clause – hulls- (01.10.83)
- International hull clauses (01.11.02)
- Institute warranties cl 26 (01.07.76)
- Institute port risk clauses cl 312 (20.07.87)
- Institute time clauses - port risks cl 311 (20.07.87)
- Broker cancellation cl 542ncc0277
- Several liability clause (direct or reinsurance as applicable) isw 1001
- Notice of cancellation, automatic termination of cover and war and nuclear
exclusions clause – hulls, etc cl 359 (01.01.95)
- Service of suit clause (marine) lpo 17d
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Our
experience with coverage issues relate to the interpretation of (unique) slip
or policy wording (and rarely involve the wording of the institute
clauses) or involve the issues of non disclosure of material
facts/statutory warranties (section 33 warranties + the warranty of
seaworthiness) as well as express warranties. Recent cases have involved
the interaction of undisclosed principals with the non disclosure of material
facts relating to the undisclosed principal.
The
institute clauses are tried and tested and rarely promote disputes or
litigation. However the joint Hull Committee have recently issued the international
hull clauses (01.11.03). This new policy form incorporates detailed changes to
the international hull clauses of the previous year, although the basic
structure remains the same. The new clauses are aimed at accelerating the
claims process and set out the rights and obligations of both the assured and
the underwriters in relation to the submission, review and settlement of hull
claims. An important obligation placed upon the underwriters is to make a
decision on a claim within 28 days. However, unlike the Norwegian hull
plan there is no sanction applied to underwriters if they fail to pay within a
set period. The new policy form broadens the latent defect
coverage, adopts the BIMCO general average absorption wording and removes
the effect of under insurance for claims of salvage, sue and labour, and
general average. On the flip side he coin, the new policy form no
longer provides cover for a final scrapping voyage, and places an obligation on
the owners/managers to provide notice of the claim as soon as they become aware
of a loss or damage. Overall the international hull clauses (01.11.03)
are to be applauded, they reflect a sophisticated move forward in marine
wordings to be expected from a London market that over the last ten years has finally come of age.
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Coverage Isssues
- Included and excluded losses
- Wilful misconduct of assured
- Delay
- Ordinary wear and tear
- Disclosure and representations (sections 17 – 21 mia 1906)
- Utmost good faith
- Non disclosure of a material fact
- Disclosure by agent
- Untrue representations
- Double insurance (section 32 mia 1906)
- Warranties (section 33 - 41 mia 1906)
- Section 33 warranty
- Express warranties
- Warranty of seaworthiness of ship
- Interpretation of slip and policy wordings
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Recoveries
- Allocation of recoveries as between underwriter and assured
- Doctrine of abandonment
- Entitled to receive proceeds/responsible all liabilities
- Doctrine of subrogation
- Excess of deductible: entitled to receive proceeds up to extent of own loss
- Itc hulls 01.10.83/01.11.95 clause 12.3
- Assured must not prejudice underwriter's rights of subrogation
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Hull and Newbuilding Claims
- Proximate cause
- Burdon of proof
- Claims usually covered
- Actual total loss (section 57 mia 1906)
- Vessel actually destroyed
- Owner irretrievably deprived of vessel
- Constructive total loss (section 60 mia 1906)
- Repair costs would exceed value when repaired
- Substitution of insured value for repaired value
- Notice of abandonment (NOA) (section 62 mia 1906)
- Tender of NOA regularly and often
- War risks
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- Damage to the vessel – particular average
- Perils insured against c/f institute time clauses - hulls cl 280 (01.11.95)
- Institute additional perils clause – hulls (01.10.83): due diligence
proviso
- Extended to include superintendents and all onshore management
- Running down clause
- Damage to cargo on other vessel
- Damage to the other vessel
- Vessels proportion of general average
- Suing and labouring charges
- Risks usually not covered
- Increased value and disbursements
- Loss of use/loss of passage money
- P & I and FD & D risks
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