193 - 06/01 - Letters of Undertaking Issued by Members

Sometimes Members themselves, instead of the Club, issue letters of undertaking / guarantees under pressure from claimants and agree to compensate claimants for their loss.

There are some dangers in Members providing such letters:

If the letter it is given without the prior written consent of the managers and amounts to an admission of liability and then the Member will be in breach of the Club's Rule 5N(iv). In such a case the Club's Directors may, in their discretion, reject any claim or reduce the sum payable by the Club.

The letter may contractually bind the Member in such a way that they are unable to limit their liability in accordance with the applicable Limitation Convention and instead may be liable to compensate the claimant for the full value of their loss. This problem can be overcome if the letter expressly reserves the Members’ right to limit liability.

The letter itself may become admissible as evidence of the terms of an agreement to settle even though it is written ‘without prejudice’.

Members who experience such requests are advised always to seek advice from the managers before giving such letters.

Source of Information : Rod Lingard (Specialist)

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.

You are currently offline. Some pages or content may fail to load.