Clause 5 - Conditions and Exceptions and Limitations
Subject to these Terms & Conditions and to any special terms upon which a ship may be entered, the Club insures the liability of the Assured in respect of an entered ship as this liability may be determined and fixed by law including any laws pertaining to limitation of liability. The Club shall in no circumstances be liable for any sum in excess of such legal liability.
Without prejudice to the generality in paragraph i above, the Club’s liability for any and all claims by the Assured, and other co-assureds arising out of any one event shall in no circumstances exceed the amount set out in the certificate of entry, provided always that the limit of the Club’s cover under Clause 2, Section 16 (Fines) of these Terms & Conditions shall in no event exceed USD 50 million any one event.
The certificate of entry for the entered ship and any endorsement thereto will state any special deductibles agreed between the Assured and the Managers as a term of entry with the Club.
Without prejudice to anything elsewhere contained in these Terms & Conditions the Club shall be entitled to set off any amount due from an Assured against any amount due to such Assured from the Club.
The Club shall not indemnify an Assured against any liabilities, costs or expenses (irrespective of whether a contributory cause of the same being incurred was any neglect on the part of the Assured or on the part of the Assured’s servants or agents) when the loss or damage, injury, illness or death or other accident in respect of which such liability arises or cost or expense is incurred, was caused by:
i. war, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power, or any act of terrorism;
ii. capture, seizure, arrest, restraint or detainment (barratry and piracy excepted) and the consequences thereof or any attempt thereat;
iii. mines, torpedoes, bombs, rockets, shells, explosives or other similar weapons of war (save for those liabilities, costs or expenses which arise solely by reason of the transport of any such weapons whether on board the entered ship or not), provided always that this exclusion shall not apply to the use of such weapons either as a result of government order or with the written agreement of the Club or the Managers where the reason for such use is the avoidance or mitigation of liabilities, costs or expenses which would otherwise fall within the cover given by the Club,
PROVIDED ALWAYS that:
a) in the event of any dispute as to whether or not an act constitutes an act of terrorism, the decision of the Club shall be final.
b) ransom shall not be recoverable unless and to the extent that the Club in its discretion shall otherwise decide.
Note: when deciding whether to exercise its discretion, the Club shall consider the merits of each case individually including but not limited to whether the Assured had taken such precautions as appear to the Club to be reasonable to avoid the event that gave rise to the ransom.
Note: Notwithstanding Clause 5(E), cover is restored to include liabilities, costs or expenses which would otherwise be excluded by Clause 5(E). The terms & conditions of that cover is contained in Clause 3, Section 2.
The Club shall not indemnify an Assured against any liabilities, costs or expenses (irrespective of whether a contributory cause of the same being incurred was any neglect on the part of the Assured or on the part of the Assured’s servants or agents) when the loss or damage, injury, illness or death or other accident in respect of which such liability arises or cost or expense is incurred, was directly or indirectly caused by or arises from:
i. ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel;
ii. the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof;
iii. any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter;
iv. the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter,
PROVIDED ALWAYS that
this exclusion shall not apply to liabilities, losses, costs or expenses arising out of the carriage of “excepted matter” as cargo on an entered ship. For this purpose “excepted matter” consists of certain radio isotopes, used in or intended to be used for any industrial, commercial, agricultural, medical or scientific purpose and such further exceptions as the Club may approve within the scope of the definition of “excepted matter” contained in the Nuclear Installations Act 1965 of the United Kingdom and any regulations made thereunder.
Subject to Sections 1, 15 and 18 of Clause 2, the Club shall not pay for:
i. Loss of or damage to any equipment on board the entered ship or to any containers, lashings, stores or fuel thereon, to the extent that the same are owned or leased by the Assured or by any co-assured;
ii. Claims by or against the Assured relating to loss of freight or hire of an entered ship unless such loss of freight or hire forms part of a claim recoverable from the Assured for liabilities in respect of cargo within the scope of these Terms & Conditions or is, with the written consent of the Managers, included in the settlement of such a claim;
iii. Loss arising out of cancellation of a charter or other engagement of an entered ship;
iv. Loss arising out of irrecoverable debts or out of the insolvency of any person, including insolvency of agents;
v. Claims by or against the Assured relating to demurrage, or delay to an entered ship unless such demurrage or delay forms part of a claim recoverable from the Assured for liabilities in respect of cargo within the scope of these Terms & Conditions or is, with the written consent of the Managers, included in the settlement of such a claim.
Unless and to the extent that separate cover shall have been agreed between the Assured and the Managers in accordance with the provisions of Clause 4, the Club shall not be liable for any claim relating to liabilities, costs and expenses incurred by the Assured of:
i. An entered ship which is a salvage tug or firefighting ship or other ship used or intended to be used for salvage or firefighting operations, when the claim arises out of any salvage or firefighting service or attempted salvage or firefighting service.
ii. An entered ship which is constructed or adapted for the purpose of carrying, or is used to carry out drilling operations in connection with oil or gas exploration or production.
iii. An entered ship which is used for operations of dredging, blasting, pile-driving, well-intervention, cable or pipe laying, construction, installation, maintenance work, core sampling, depositing of spoil, decommissioning, power generation or such other operations as the Managers may determine from time to time.
iv. An entered ship which is used for waste disposal or incineration operations.
v. An entered ship which is used for or in connection with the operations of submarines, mini-submarines, diving bells or remotely operated vehicles, or underwater vessels or equipment, or an entered ship which is used for or in connection with professional or commercial diving operations.
vi. An entered ship which is moored (otherwise than on a temporary basis) and is open to the public as a hotel, restaurant, bar or other place of entertainment.
vii. An entered ship which is a semi-submersible heavy lift vessel or which is designed exclusively for the carriage of heavy lift cargo, save where the cargo is carried under a contract on unamended Heavycon terms or any similar terms approved in writing by the Managers.
The Club shall not, unless and to the extent that the Club in its discretion otherwise decides, be liable for any liabilities, costs or expenses recoverable under any other insurance or which would have been so recoverable:
i. apart from any terms in such other insurance excluding or limiting liability on the ground of double insurance; and
ii. if the ship had not been entered in the Club with cover against the risks set out in these Terms & Conditions.
No claim shall be recoverable from the Club if it arises out of or is consequent upon an entered ship carrying contraband, blockade running or being employed in an unlawful trade or if the Club, having regard to all the circumstances, shall be of the opinion that the carriage, trade or voyage was imprudent, unsafe, unduly hazardous or improper.
Unless otherwise agreed in writing between the Assured and the Managers, the following conditions are terms of the insurance of every entered ship:
i. The Assured shall, on the date of the commencement of cover or the date upon which the entered ship is chartered, ensure that the entered ship
(a) is classed with a Classification Society approved by the Managers, and
(b) is insured for Owner’s P&I risks with a P&I Club that is a member of the International Group of P&I Clubs or other liability insurer approved by the Club.
ii. The Assured shall use best endeavours to ensure that the entered ship complies with all the rules, recommendations and requirements of the Classification Society relating to the entered ship within the time or times specified by the Society.
iii. The Assured shall use best endeavours to ensure that the entered ship complies with all statutory requirements of the state of the ship’s flag relating to the construction, adaptation, condition, fitment, equipment and manning of the entered ship; and, at all times, maintain the validity of such statutory certificates as are issued by or on behalf of the state of the ship’s flag in relation to such requirements and in relation to the International Safety Management (ISM) Code and the International Ship and Port Facility Security (ISPS) Code.
Unless and to the extent that the Club otherwise decides, an Assured shall not be entitled to any recovery from the Club in respect of any claim arising during a period when
i. Subject to ii) below, these Terms & Conditions and all contracts of insurance between the Club and the Assured shall be subject to and incorporate the provisions of the Marine Insurance Act, 1906 and the Insurance Act 2015 of the United Kingdom and any statutory modifications thereto except insofar as such Acts or modifications may have been excluded by these Terms & Conditions or by any term of such contracts.
ii. The following provisions of the Insurance Act 2015 (“the Act”) are excluded from these Terms & Conditions and any contract of insurance between the Club and the Assured:
a) Section 8 of the Act is excluded. As a result any breach of the duty of fair presentation by the Assured shall entitle the Club to avoid the policy, regardless of whether the breach of the duty of fair presentation is innocent, deliberate or reckless.
b) Section 10 of the Act is excluded. As a result all warranties in these Terms & Conditions or any such contract of insurance must be strictly complied with and if the Assured fails to comply with any such warranty the Club shall be discharged from liability from the date of the breach, regardless of whether the breach is subsequently remedied.
c) Section 11 of the Act is excluded. As a result these Terms & Conditions and all terms of the contract of insurance between the Club and the Assured, including terms which would tend to reduce the risk of loss of a particular kind, loss at a particular location and/or loss at a particular time, must be strictly complied with and if the Assured fails to comply with any such term, the Club’s liability may be excluded, limited or discharged in accordance with these Terms & Conditions notwithstanding that the failure to comply could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.
c) Section 13 of the Act is excluded. As a result the Club shall be entitled to exercise its right to terminate the contract of insurance in respect of the Assured and all co-assureds in the event that a fraudulent claim is submitted by or on behalf of the Assured and/or any co-assured.
d) Section 13A of the Act is excluded: As a result these Terms & Conditions and all terms of the contract of insurance between the Club and the Assured shall not be subject to or shall the Club be in breach of any implied term that it will pay any sums due in respect of a claim within a reasonable time save where the breach is deliberate or reckless and Section 13A of the Act is excluded to this extent.
e) Section 14 of the Act is excluded. As a result, the contract of insurance between the Club and the Assured shall be deemed to be a contract of the utmost good faith, and any breach of the duty of utmost good faith shall entitle the Club to avoid the contract of insurance.
Upon the occurrence of any casualty, event or matter liable to give rise to a claim by an Assured upon the Club, it shall be the duty of the Assured and its agents to take and to continue to take all such steps as may be reasonable for the purpose of averting or minimizing any expense or liability in respect whereof it may be insured by the Club. In the event that an Assured commits any breach of this obligation, the Club may in its discretion reject any claim by the Assured against the Club arising out of the casualty, event or matter, or reduce the sum payable by the Club in respect thereof by such amount as it may determine.
i. An Assured must promptly notify the Club of every casualty, event or claim upon it which is liable to give rise to a claim upon the Club, and of every event or matter which is liable to cause the Assured to incur liabilities, costs or expenses for which it may be insured by the Club.
ii. An Assured must promptly notify the Club of every survey or opportunity for survey in connection with a matter referred to under (i).
iii. An Assured must at all times promptly notify the Managers of any information, documents or reports in its or its agents’ possession, power or knowledge relevant to such casualty, event or matter as is referred to under (i) and shall further, whenever so requested by the Managers, promptly produce to the Club and/or allow the Club or its agents to inspect, copy or photograph, all relevant documents of whatsoever nature in its or its agents’ possession or power and shall further permit the Club or its agents to interview any servant, agent or other person who may have been employed by the Assured at the material time or at any time thereafter or whom the Club may consider likely to have any direct or indirect knowledge of the matter or who may have been under a duty at any time to report to the Assured in connection therewith.
iv. An Assured shall not settle or admit liability for any claim for which it may be insured by the Club without the prior written consent of the Managers.
In the event that an Assured commits any breach of its obligations referred to in (i) to (iv) above, the Club may in its discretion reject any claim by the Assured against the Club arising out of the casualty, event or matter, or reduce the sum payable by the Club in respect thereof by such amount as it may determine.
In the event that:
i. an Assured fails to notify the Club of any casualty, event or claim referred to in paragraph (N) (i) of this Clause within one year after it has knowledge thereof; or
ii. an Assured fails to submit a claim to the Club for reimbursement of any liabilities, costs or expenses within one year after discharging or settling the same, the Assured’s claim against the Club shall be discharged and the Club shall be under no further liability in respect thereof unless the Club in its discretion shall otherwise determine.
i. Unless otherwise agreed in writing by the Managers, where the Club has paid a claim to or on behalf of an Assured, the whole of any recovery from a third party in respect of that claim shall be credited and paid to the Club up to an amount corresponding with the sum paid by the Club together with any interest element on that sum comprised in the recovery, provided however that where, because of a deductible in its terms of entry, the Assured has contributed to settlement of the claim, any such interest element shall be apportioned between the Assured and the Club taking into account the payments made by each and the dates on which those payments were made.
ii. Unless otherwise agreed in writing by the Managers, where the Assured, as a result of an event for which it is covered by the Club, has obtained extra revenue or saved costs or expenses which would otherwise have been incurred and which would not have been covered by the Club, the Club may deduct from the sum otherwise payable to the Assured an amount corresponding to the benefit obtained.
iii. Unless otherwise agreed in writing by the Managers, the Assured must not waive in any manner whatsoever the right to exclude, defend or limit liability and/or any rights of recourse against any party otherwise available to the Assured;
iv. Unless otherwise agreed in writing by the Managers, where the Club has paid a claim to or on behalf of an Assured, the Club shall be subrogated to the rights of the Assured in respect of the claim to the extent of that payment, including the right to any interest accruing on that amount prior to its recovery and the right to recover any costs incurred in relation to the exercise of such rights.
The Club may, for its sole benefit, conduct a survey of the condition, operation or trading of the entered ship, or audit of the Assured’s management systems, at any time. If the survey or audit demonstrates that the condition, operation or trading of the entered ship, or the Assured’s management systems are not satisfactory, the Assured shall indemnify the Club against the cost of the survey or audit, and the Club shall be entitled to terminate or restrict cover until the condition, operation and trading of the entered ship, and the Assured’s management systems are satisfactory.
The Club’s logs and records of any electronic communication sent or received by the Club shall, in the absence of manifest error, be conclusive evidence of such communication and of its despatch or receipt.
In no case shall interest be paid upon sums due from the Club.
i. The Club shall not indemnify an Assured against any liabilities, costs or expenses where the provision of cover, the payment of any claim or the provision of any benefit in respect of those liabilities, costs or expenses may expose the Club to the risk of any sanction, prohibition, restriction or adverse action by any competent authority or government.
ii. The Assured shall in no circumstances be entitled to recover from the Club that part of any liabilities, costs or expenses which is not recovered by the Club from any reinsurer because of a shortfall in recovery from such reinsurer by reason of any sanction, prohibition or adverse action by a competent authority or government or the risk thereof if payment were to be made by such reinsurer. For the purposes of this paragraph, “shortfall” includes, but is not limited to, any failure or delay in recovery by the Club by reason of the said reinsurer delaying payment or making payment into a designated account in compliance with the requirements of any competent authority or government.
iii. Notwithstanding, and without prejudice to, any other provisions of these Terms & Conditions, the Club may terminate the insurance of an Assured in respect of any and all ships entered by it where, in the opinion of the Club, the Assured has exposed or will expose the Club to a material risk of being or becoming subject to a sanction, prohibition, restriction or other adverse action by a competent authority or government, which may materially affect the Club.
The Club may make regulations prescribing the conditions or forms of contracts, such as contracts of carriage or other contracts, either generally or for use in any particular trade or at any particular port or place, as the situation may require. Such regulation shall take effect forthwith upon issuance of the regulation unless otherwise decided by the Managers in writing and shall be deemed to be incorporated in these Terms and Conditions from the beginning of the policy year next following the time and date of the taking effect of such regulation. Notice of issuance of regulation made pursuant to this Clause shall be sent to every Assured by post or by electronic transmission. If any Assured shall commit a breach of any regulation, the Directors may reject or reduce any claim made by the Assured to the extent to which it would not have arisen if it had complied with the regulation and may further impose such terms upon it as they may think fit as a condition of the continuance of the entry of the Assured’s ship or ships in the Association.
Note. Current regulations can be found in Appendix III
Where an Assured’s or a co-assured’s liabilities or costs or expenses are incurred under the terms of a contract which would not have arisen but for the terms of that contract, such liabilities, costs or expense are not covered by the Club unless and to the extent that those terms have been approved in writing by the Club with the Assured.
Unless and to the extent that the Assured has obtained appropriate separate cover by agreement with the Club in writing, there shall be no recovery from the Club in respect of claims relating to cash, negotiable instruments, precious or rare metals or stones, valuables or objects of a rare or precious nature.
1. Subject only to paragraph 3 below, in no case shall this insurance cover loss, damage, liability or expense directly or indirectly caused by or contributed to by or arising from the use or operation, as a means for inflicting harm, of any computer, computer system, computer software programme, malicious code, computer virus, computer process or any other electronic system.
2. Subject to the conditions, limitations and exclusions of the policy to which this clause attaches, the indemnity otherwise recoverable hereunder shall not be prejudiced by the use or operation of any computer, computer system, computer software programme, computer process or any other electronic system, if such use or operation is not as a means for inflicting harm.
3. Where this clause is endorsed on policies covering risks of war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power, or terrorism or any person acting from a political motive, paragraph 1 shall not operate to exclude losses (which would otherwise be covered) arising from the use of any computer, computer system or computer software programme or any other electronic system in the launch and/or guidance system and/or firing mechanism of any weapon or missile.
This clause shall be paramount and shall override anything contained in this insurance inconsistent therewith.
1. In the event that the World Health Organization (‘WHO’) has determined an outbreak of a Communicable Disease to be a Public Health Emergency of International Concern (a ‘Declared Communicable Disease’), no coverage will be provided under this insurance for any loss, damage, liability, cost or expense directly arising from any transmission or alleged transmission of the Declared Communicable Disease.
2. The exclusion in paragraph 1 above will not apply to any liability of the Assured otherwise covered by this insurance where the liability directly arises from an identified instance of a transmission of a Declared Communicable Disease and where the Assured proves that identified instance of a transmission took place before the date of determination by the WHO of the Declared Communicable Disease.
3. However even if the requirements of paragraph 2 above are met, no coverage will be provided under this insurance for any:
A. liability, cost or expense to identify, clean up, detoxify, remove, monitor, or test for the Declared Communicable Disease whether the measures are preventative or remedial;
B. liability for or loss, cost or expense arising out of any loss of revenue, loss of hire, business interruption, loss of market, delay or any indirect financial loss, howsoever described, as a result of the Declared Communicable Disease;
C. loss, damage, liability, cost or expense caused by or arising out of fear of or the threat of the Declared Communicable Disease.
4. For the purpose of this Clause, Communicable Disease means any disease, known or unknown, which can be transmitted by means of any substance or agent from any organism to another organism where:
A. the substance or agent includes but is not limited to a virus, bacterium, parasite or other organism or any variation or mutation of any of the foregoing, whether deemed living or not, and
B. the method of transmission, whether direct or indirect, includes but is not limited to human touch or contact, airborne transmission, bodily fluid transmission, transmission to or from or via any solid object or surface or liquid or gas, and
C. the disease, substance or agent may, acting alone or in conjunction with other co-morbidities, conditions, genetic susceptibilities, or with the human immune system, cause death, illness or bodily harm or temporarily or permanently impair human physical or mental health or adversely affect the value of or safe use of property of any kind.
5. This endorsement shall not extend this insurance to cover any liability which would not have been covered under this insurance had this endorsement not been attached.
All other terms, conditions and limitations of the insurance remain the same