Circular 5/11: Charterparty clauses - Indemnity for insured risks


  • Date: 28/04/2011

TO THE MEMBERS

Dear Sirs

CHARTERPARTY CLAUSES – INDEMNITY FOR INSURED RISKS

A number of the International Group Clubs have recently been made aware of a clause that some charterers have been seeking to incorporate into their charterparties, in particular in the container trades. For the reasons set out below the clause has the potential to prejudice an Owners P&I cover and should not be agreed without considering the full implications of doing so. 

There are different versions of the  clause but the most common form is:

"Notwithstanding anything stipulated in this contract to the contrary, Owners are responsible for and shall keep Charterers free from all insured risks as covered by P&I."

These or similar words are designed to impose responsibility upon the owner for all P&I liabilities that would otherwise be liabilities falling on a charterer, even if the latter is wholly at fault, in effect requiring the owner to be the charterer’s P&I insurer. The clause also bars recourse claims by the owner against the charterer, when the latter is or would normally be responsible for liabilities or losses incurred by an owner arising from an accident or casualty.

Members are advised to refuse this and similar clauses. Under an Owner's P&I entry liabilities incurred under a blanket indemnity and waiver of recourse of this kind are excluded. There is thus a considerable risk, if an owner agrees this or a similar form of clause, that he will be exposed to significant uninsured liability.

The Club Managers will be happy to advise further, and it is recommended that any member asked to agree this clause or a similar form of clause, should contact the Club before doing so.

All Clubs in the International Group have issued a similar Circular.

Yours faithfully

THOMAS MILLER (BERMUDA) LTD.


CONTACT
• Members are requested to call their usual Club contact if they have any enquiries on this matter.

 

Industry developments

Polar Shipping

Legal, navigational and environmental resources, news and updates on the development of polar shipping. Read more


US VRP Compliance

With effect from 30th January 2014 non-tank as well as tankships calling at US ports will be required to submit VRPs.  For Club and other resources to assist in compliance click here


International Environmental compliance

Environmental Compliance resource page collates material in respect of International environmental compliance issues affecting our Members. Information from the Club, Loss Prevention and external resources has been collated in one place for ease of reference.


MLC 2006

The Maritime Labour Convention enters into force in August 2013 - resources, news & advice on implementation can be found in this dedicated section.  READ MORE


International sanctions

Recent guidance & corresponding material in respect of international sanctions against various countries has been updated with respect to temporary easing of sanctions against Iran.  READ MORE


Piracy

Essential precautions and preparation against piracy, as well as additional information and resources, loss prevention advisories and useful external web links


Emergency Contacts


If you need to call our offices out of hours and at weekends, click After Office hours for a up to date list of the names of the Duty Executives and their mobile phone numbers. 

Ship Finder


This Ship Finder is updated on a daily basis. Members who need to advise the Club of updates to their recorded ships' details should advise their usual underwriting contact.