Clause 18 - Cesser of Insurance and its Effects
A. An Assured shall forthwith cease to be insured by the Club in respect of any and all ships entered by it or on its behalf upon the happening of any of the following events:
a) upon the passing of any resolution for the Assured’s voluntary winding up (other than voluntary winding up for the purposes of company or group reorganisation),
b) upon an order being made for the Assured’s compulsory winding up,
c) upon the Assured’s dissolution,
d) upon a receiver being appointed of all or part of the Assured’s business or undertaking,
e) upon the Assured commencing proceedings under any bankruptcy or insolvency laws to seek protection from the Assured’s creditors or to reorganise the Assured affairs.
B. Unless otherwise agreed in writing by the Managers, an Assured shall forthwith cease to be insured by the Club in respect of any ship entered by it or on its behalf upon the happening of any of the following events in relation to such ship:
i. upon the Assured, as at noon GMT on the date of expiry specified in the certificate of entry, failing to pay in respect of the entered ship any amounts due from it to the Club.
ii. upon the Assured, as at noon GMT on the date of expiry specified in the certificate of entry, being in breach of, or otherwise failing to fulfil, its obligations in respect of the entered ship under Clause 5, paragraphs (K) or (Q).
iii. upon the Assured ceasing to be a Charterer of an entered ship.
iv. upon the entered ship becoming an actual total loss or becoming or being deemed to have become a constructive total loss. PROVIDED ALWAYS that, with regards to paragraphs (A) & (B) above:
a) notwithstanding the cesser of the insurance under subparagraph B (iv) of this Clause the Club shall, subject to these Terms & Conditions and to the terms of entry, remain liable for claims arising directly from the casualty giving rise to the actual or constructive total loss of the entered ship.
b) if the Managers agree that the insurance of the entered ship shall continue after the happening of any of the events listed in paragraphs (A) or (B) of this Clause they may in their discretion impose such terms and conditions as they think fit for the continuation of the insurance.
C. On the occurrence of any of the events specified in this Clause in respect of an entered ship, the Assured shall give notice in writing of such event to the Managers within one month after the date thereof.
D. Upon an Assured ceasing to be insured by virtue of this Clause:
i. Such Assured and its successors shall be and remain liable in relation to premium and other sums payable:
a) in respect of the policy year in which such cessation occurs, on a pro rata basis, namely for the proportion of such sums applicable to the period beginning at the date of entry specified in the certificate of entry and ending at noon GMT on the date of such cessation; provided that, if the Assured fails to give notice of the event in accordance with paragraph (C) of this Clause, such period shall end at noon GMT on such later date as the Managers in their discretion shall decide, and
b) in respect of previous policy years, for the whole of those policy years, and
ii. Subject to the other provisions of these Terms & Conditions and to the terms of entry the Club shall remain liable in respect of any ship entered by such Assured or in respect of such entered ship (as the case may be) for all claims under these Terms & Conditions arising by reason of any event which had occurred prior to the date of such cessation, but shall not otherwise be under any liability whatsoever by reason of anything occurring after that date.