Rule 1

Introductory

Rule 1

Introductory

1 The standard cover afforded by the Association to an Owner who has entered his ship in the Association is set out in Rule 2.

2 The risks specified in Rule 2 are always subject to the conditions, exceptions, limitations and other terms set out in Rule 5 and in the remainder of these Rules.

3 The cover set out in these Rules may be excluded, limited, modified or otherwise altered by any special terms which have been agreed in writing between an Owner and the Managers.

4 By virtue of Rules 3 and 4 an Owner may be insured against risks other than those set out in Rule 2 where such special terms have been agreed in writing between the Owner and the Managers. Unless otherwise expressly agreed such special insurance shall be subject to the conditions, exceptions, limitations and other terms set out in Rule 5 and in the remainder of these Rules.

5 An Owner is only insured against loss, damage, liability or expense incurred by him which arises:

i. out of events occurring during the period of entry of a ship in the Association;

ii. in respect of the Owner’s interest in the entered ship; and

iii. in connection with the operation of the ship by or on behalf of the Owner.

6 An Owner who has entered his ship in the Association for insurance against any of the aforesaid risks is bound (subject to (7) below) to pay Calls to the Association in accordance with Rules 8 and 19 to 23 (“Call Entries’’).

7 By virtue of Rule 9 an Owner may be insured on the special terms that he is liable to pay a fixed premium to the Association (“Fixed Premium Entries’’), provided that this has been expressly agreed in writing between the Owner and the Managers.

8 Save as provided in Rule 1(9), the cover provided by the Association as set out in these Rules is solely for the benefit of the Owner, and any Joint Owner, Group Affiliate, other association or insurer, or permitted assign, to the extent allowed by Rules 10, 11, 13 and 15. It is not intended, save as provided in Rule 1(9), that rights should be acquired by any third party, through the operation of the Contracts (Rights of Third Parties) Act 1999 of the United Kingdom or similar legislation.

9 Notwithstanding the provisions of Rule 5A, where an Owner has failed to discharge a legal liability to pay damages or compensation for illness, personal injury or death of a seaman, the Association shall discharge or pay such claim on the Owner’s behalf directly to such seaman or dependent thereof

PROVIDED ALWAYS that:

i. the seaman or dependent has no enforceable right of recovery against any other party and would otherwise be uncompensated,

ii. subject to (iii) below, the amount payable by the Association shall under no circumstances exceed the amount which the Owner would otherwise have been able to recover from the Association under the Rules and the Owner’s terms of entry,

iii. where the Association is under no liability to the Owner in respect of such claim in accordance with Rule 31(B)(ii)(a) and (d) by reason of cancellation for non-payment of amounts due to the Association, the Association shall nevertheless discharge or pay that claim to the extent only that it arises from an event occurring prior to the date of cancellation, but as agent only of the Owner, and the Owner shall be liable to reimburse the Association for the full amount of such claim.