Circular 12/01: War Risks P&I General Notice of Cancellation

  • Date: 04/10/2001




Circular 9/01, dated September 2001. As indicated, the Directors did not at that time give seven days' notice of cancellation of the Association's special war risks P&I cover under the proviso to Rule 5(E) notwithstanding that market war risk underwriters had already done so.

Dear Sirs



We refer to

The circular advised that this decision would be reviewed from day to day as events developed. In particular, the Directors were concerned that Club cover should, if possible, continue to protect the Membership as a whole and should not be unduly exposed either at the primary level or in any particular geographical area.

Members are reminded that this cover is not intended as a substitute for market war risk cover, but is provided on the basis that the protection is intended to pay claims only in excess of amounts recoverable under a Member's underlying war risk policy, including P&I risks.

In the current circumstances, the Directors have decided, at their meeting on 11th October, that general notice of cancellation should now be issued. Members are therefore advised that this circular constitutes seven days' notice of cancellation of the Association's war risks P&I cover in accordance with numbered paragraph (6) of the Directors' resolution of 1st February 2001.

This notice shall run from 2400 hours GMT on 17th October 2001.

The Directors further resolved that, upon expiry of this notice, cover will be automatically reinstated without, for the time being, payment of any additional premium, on the condition that the Club's cover for war risks P&I shall be subject to an excess of either:

(a) the "proper value" of the entered ship, as determined in accordance with Rule 5(D), or

(b) the amount recoverable from war risk underwriters,

whichever is the greater.

The Directors will retain an absolute discretion to pay claims within this excess. The Directors considered the particular situation of Members who are unable in current market conditions to purchase a limit for war risks P&I to the full proper value of the entered ship, and would give every consideration to a claim under this provision where the Member's primary war risks P&I cover is limited to $100,000,000 notwithstanding that the proper value of the entered ship is higher than this amount.

The terms of the Directors' resolution also clarify that the limit applicable to this special war risk cover shall be the lesser of $100 million or the limit applicable to the claim under the Member's individual terms of entry.

The text of the Directors' resolution is set out below.

Yours faithfully




A similar notice is being issued by other Members of the International Group of P&I Associations.





Pursuant to numbered paragraph (6) of the Directors' resolution of 1st February 2001, the Directors hereby resolve to give seven days notice of cancellation of the special war risks P&I cover under the proviso to Rule 5E.

This seven day notice shall run from 2400 hours GMT on Wednesday 17th October 2001.

It is further resolved that special cover be reinstated with effect from 2400 hours GMT on Wednesday 24th October 2001 on the same terms and conditions, save that numbered paragraphs (2) and (3) shall be amended to read as follows:

Amended paragraph (2)

Unless and to the extent that the Directors in their discretion otherwise decide, this special cover shall be subject to an excess of either:

(a) the "proper value" of the entered ship as defined in Rule 5D, or

(b) the amount recoverable in respect of the claim under any other policy of insurance, whether of war risks or otherwise,

whichever shall be the greater, save that such excess shall not apply where the entry of the ship is solely in the name of or on behalf a charterer other than a charterer by demise or bareboat charterer.

Amended paragraph (3)

The limit applying to this special cover shall be US $100,000,000 each vessel, any one accident or such limit as may be applicable to the claim under the Member's individual terms and conditions of entry, whichever shall be the lesser.


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