1 We insure you for:

1.1 The following for the perils stated at 1.2 in the capacitiesvstated at 1.3:

1.1.1 Physical loss and damage

1.1.2 General average/salvage contributions arising from the avoidance of physical loss/damage to your insured ships

1.2 The perils referred to at 1.1 are:

1.2.1 Perils of the sea or other navigable waters

1.2.2 Fire, lightning or explosion

1.2.3 Piracy risks or violent theft by persons outside the ship

1.2.4 Jettison

1.2.5 Breakdown/accident to nuclear installations/reactors

1.2.6 Contact with berths, equipment, road vehicles or aircraft or objects falling from aircraft

1.2.7 Accidents in loading, discharging or shifting cargo/fuel

1.2.8 Bursting of boilers, breakage of shafts or latent defect in machinery/hull

1.2.9 Negligence of crew members or pilots

1.2.10 Negligence of repairers or charterers - unless the repairers/charterers are insured under this clause

1.2.11 Barratry

1.2.12 Lawful acts of an authority in respect of existing or threatened pollution arising from damage to an insured ship from an insured risk

1.2.13 Your negligence

1.3 The capacities referred to at 1.1 are:

1.3.1 as owner/bareboat charterer for perils specified at 1.2.1-12

1.3.2 as time charterer for perils arising as specified at 1.2.13

2 We do not insure you under this clause for loss/damage arising:

2.1      from earthquake/volcanic eruption

2.2      from hostile detonation of a nuclear weapon

2.3      after the ship has been requisitioned with your prior agreement

2.4      15 days after the ship has been requisitioned without your prior agreement

2.5      after you cease to have an interest in the ship

2.6      as charges made by anyone whom you appoint to obtain/supply information or documents

2.7      from failure to make the ship seaworthy at the start of the voyage

2.8      from lack of due diligence by you or by the owners/managers of the ship not acting as a crew member. This exclusion applies only to the perils specified at 1.2.7-12 above

Qualifications

3 Bottom Plating

In case of a claim for damage to bottom plating we insure you only for scraping, grit blasting or other surface preparation/painting of the ship’s bottom - and then only for:

3.1      new bottom plates prepared ashore

3.2      the butts or areas of plating immediately adjacent to renewed or refitted plates, which have been damaged during repair

3.3      areas of plating damaged in the course of fairing in place or ashore

3.4      supplying the first coat of primer or anti-corrosive to the areas mentioned above

4 Wages/Maintenance

We do not insure you under this clause for wages/maintenance of crew members unless incurred:

4.1      solely during removal of the ship, with the Managers’ agreement, from one port to another for repairs or trials after repairs and

4.2      while the ship is moving through the water

5 Unrepaired Damage

5.1      If damage is unrepaired when your insurance ceases, we will pay the reasonable depreciation in the market value of the ship attributable to it, not exceeding the lower of:

5.1.1 the reasonable repair costs or

5.1.2 the insured value of the ship

5.2      We will not pay for unrepaired damage if the ship subsequently becomes a total loss during the period of your insurance, even if this arises from an insured risk

6 Total Loss

6.1      In case of actual total loss we will pay the insured value of the ship

6.2      If the reasonable cost of recovery and repairs arising from one accident is estimated to exceed the insured value, we will pay the insured value as a constructive total loss, less any salvage value

7 Tenders

7.1      The Managers may:

7.1.1 decide where the ship will go for repairs - and will refund to you the additional expense of any necessary voyage to get there

7.1.2 veto any repairer or place of repair

7.2      The Managers may take tenders (or require that further tenders be taken). If they do, and they accept a tender, you are entitled to a tender allowance of 30% on the insured value per year for time lost between sending invitations to tender and accepting tenders if:

7.2.1 the time is lost solely as a result of taking tenders and

7.2.2 you accept the tender without delay

7.3      We deduct from the tender allowance any of the following recovered for any part of the period covered by the allowance:

7.3.1 amounts for fuel, stores and wages/maintenance of crew members - including amounts allowed in general average

7.3.2 damages from anyone else for detention, loss of profit or running expenses

7.4      If part of the cost of the repair (except the deductible) is not recoverable under this clause, the tender allowance will be reduced by the same proportion

7.5           If the Managers are not given a reasonable opportunity to require tenders, we will deduct 15% from the claim

8              Salvage

8.1      If your ship is insured for less than its salved value we will pay salvage contributions reduced by the percentage by which the insured value is less than the salved value

8.2      If your ship receives salvage services from another ship in the same ownership/management, this will not affect your insurance but liability for the amounts payable will be determined by a sole arbitrator, agreed by you and by the Managers  

9         New for Old

We pay claims for physical loss and damage without deduction new for old

10 War/SR&T (Strikes Riots & Terrorist) & Piracy Risks

10.1 CTL (Constructive Total Loss)

If you are deprived by seizure of your ship for a continuous period of 12 months, we will regard this as a constructive total loss for the purposes of your insurance for war/SR&T or piracy risks at the date this period commenced - provided that your ship:

10.1.1 was insured for war/SR&T or piracy risks on that date and

10.1.2 had not already become a total loss as a result of an insured risk at some time during the period

10.2 We do not insure you for war risks arising from:

10.2.1 hostile detonation of a nuclear weapon

10.2.2 war (declared or not) between permanent members of the UN Security Council

10.2.3 seizure by an authority of your country

10.2.4 seizure under any customs or quarantine regulation  

10.2.5 ordinary judicial process, failure to pay a fine/penalty or provide security or any financial cause

10.3 The Managers may at any time decide that we will not insure you for war, SR&T or piracy risks either entirely or in respect of your ship which is in any country, territory or area. The Managers will notify you by Circular as at G2:41 of this decision, which will take effect at 2400 GMT on the seventh day after notice is given

10.4 Insurance for war, SR&T and piracy risks will automatically terminate on:

10.4.1 hostile detonation of a nuclear weapon (anywhere - whether your equipment is involved or not)

10.4.2 war as at 10.2.2

1 We insure you for:

Your liability for the following arising from your ship coming into collision with another ship:

1.1      physical loss of and damage to the other ship*

1.2      delay/loss of use of the other ship*

1.3      general average/salvage contributions in respect of the other ship*

*or property on board it

Qualifications

2 Set off

If both ships are to blame, your claim will be limited to the proportion of the damage to the other ship (or property on board it) for which you are liable:

2.1     unless the liability of one or both of the ships is limited by law

2.2     irrespective of the amount you have to pay, or which may be paid to you, after any set off of your claim against the other ship

3 Associated Ships

If your ship collides with another ship in the same ownership/management, this will not affect your insurance but liability will be determined by a sole arbitrator, agreed by you and by the Managers

1 We insure you for your liability 

1.1      Loss of or damage to third party property - and consequential loss arising from this

1.2      Death, injury or illness of third parties - and consequential loss arising from this

1.3      Your neglect/failure to raise remove or destroy the insured ship or any third party property - damaged as a result of an accident as specified at 1.1

1.4      Special compensation to a salvor of your ship for measures taken to protect the environment, subject, if arising from actual or threatened pollution, to your limit for pollution as stated in your certificate and to G1:3. We only insure you under this paragraph (1.4) to the extent that the compensation:

1.4.1 is not payable by anyone with an interest in the salved property and

1.4.2 is imposed on you under Article 14 of the International Convention on Salvage 1989 (or legislation giving effect to this) or is assumed under a standard form of salvage agreement approved by the Managers  

1.5      Life salvage

1.6      Towage, as long as:

1.6.1 it is under a contract for customary towage for entering/leaving port or manoeuvring within port, during the ordinary course of trading and not made necessary by an accident or

1.6.2 the Managers have approved it in advance

2 We do not insure you under this clause for liabilities:

2.1      under 1.1 in respect of loss of or damage to:

2.1.1 another ship with which your ship has collided (or property on this ship)

2.1.2 property of a builder/repairer, or for which the builder/repairer is responsible, on your ship

2.1.3 cash, securities, bullion, precious metal, precious jewellery, precious stones or valuable works of art belonging to anyone on board your ship

2.1.4 non-essential personal effects of crew members

2.2      under 1.2 in respect of:

2.2.1 death, injury or illness of your employee - or of anyone employed to work on or in connection with your ship, or with its repair, or with equipment used or property carried on it

2.2.2 your contractual liability to compensate someone else in respect of that other person’s employees or your own employees  

2.3      arising from pollution - except as specified at 1.4

2.4      in respect of your owned/leased carrying equipment which we do not insure for loss/damage

2.5      which are contractual liabilities in respect of your owned/leased:

2.5.1 fuel or property (other than equipment)

2.5.2 handling equipment which we do not insure for loss/damage

1 We insure you for:

Your liability for fines and other penalties, including confiscation, imposed by an authority on you (or anyone acting for you) in respect of the following:

1.1      safety at work on or relating to your ship

1.2      smuggling

1.3      any customs regulation relating to the construction/adaptation/fitment of your ship

1.4      immigration

1.5      any other act neglect or default of your employees/agents - in the course of their duties in respect of your ship

2 We do not insure you under this clause:

2.1      For breach of regulations relating to:

2.1.1 overloading of your ship

2.1.2 illegal fishing

2.1.3 pollution  

2.1.4 competition, regulation of companies or privacy and protection of personal data, including the General Data Protection Regulation (GDPR)

2.2      In respect of your owned/leased carrying equipment which we do not insure for loss/damage

Qualifications

3 Intentional/Reckless Conduct

The Directors may reduce or reject a claim if it appears to them that you or your employee have acted (or failed to act) intentionally or recklessly

4 Illegality

If insurance for any of the matters specified at 1 above is held to be illegal, this will apply only to the matters concerned and will not affect other insurance under this clause or elsewhere in your policy

5 Enforcement of Reimbursement

If it is held by a court or tribunal that you have no right to enforce reimbursement of a claim under this clause, we undertake to treat the claim as if your right is enforceable unless it would be illegal for us to do so.

1 We insure you for the following costs (subject to D5:3):

1.1 Mitigation

Costs of minimising a claim

1.2 Investigation & Defence

Costs arising from investigating an accident which may give rise to a claim and protecting your interests in relation to it (including legal and survey fees) - including the costs of recovering a debt if payment is withheld solely because of a claim

1.3 Disposal & Wreck Removal

Costs, additional to costs which you would have incurred in any event, of lighting, marking, raising (or attempted raising), removal or destruction of the wreck of your insured ship and property on board it, which appears during the period of your insurance

1.4 Infectious Disease

Additional costs as a result of the outbreak of infectious disease on your ship or ashore

1.5 Landing Sick/Injured Persons & Stowaways/Refugees

Additional costs, including landing persons saved at sea by your ship

1.6 Landing and Repatriation of Crew Member

Additional costs of landing or repatriating a crew member:

1.6.1 who is injured or ill or

1.6.2 where the costs are necessarily incurred under a contract of service or employment, as a statutory obligation or by order of an authority except where the costs are payable by reason of:

a. the end of the crew member’s contractual term of service
b. the sale, disposal or laying up of the insured ship
c. your default

1.7 Crew Substitution

Additional costs incurred in substituting a crew member, whose services you have been deprived of due to the crew member’s:

1.7.1 death, injury or illness (or repatriation due to injury or illness)

1.7.2 desertion

1.8 Defaulting Crew

Costs incurred as a statutory obligation or by order of an authority in respect of a crew member who goes absent without leave from an insured ship, where the costs cannot be recovered from the crew member

1.9 Wages or Compensation payable to a Crew Member:

following total loss of an insured ship, which necessitates termination of employment under a contract of service/employment, collective agreement or applicable law

1.10 Uncollected Cargo

Additional costs incurred solely by the failure of any party to collect or remove cargo less:

1.10.1 costs which you would have incurred in any event

1.10.2 proceeds from sale of cargo

1.10.3 sums which you can recover from anyone else

2 We do not insure you under this clause for costs arising from:

2.1 Delay while awaiting a substitute crew member

2.2 Earthquake/volcanic eruption

2.3 War, strikes riots & terrorist risks – except costs under 1.1-1.2 for mitigation or investigation/defence of a claim which we insure under D1-D4 or D6-D9

2.4 Hostile detonation of a nuclear weapon

Qualifications

3 Approval/agreement

We only insure you if:

3.1 The Managers have agreed to the costs or

3.2 The Directors decide that the costs were properly incurred

4 Limits

Claims are subject to limits as below:

4.1      1.1-1.2        as for the claim being investigated/defended, or mitigated, and costs will be included in this claim for this purpose

4.2      1.3-1.9:        your special limit for Small Vessels risks

4.3      1.10:             USD 25,000: each accident and in the aggregate each account year

5 Deductibles

Claims are subject to deductibles as below:

5.1      1.1:               as for the claim being mitigated

5.2      1.2-1.8:        nil

1 We insure you for:

1.1 Your liability for the following arising as owner of an insured ship, to the extent that you would have been insured under D3:1.1-1.3 save only for the exclusion at D3:2.3:

1.1.1 Loss of or damage to third party property - and consequential loss arising from this

1.1.2 Death, injury or illness of third parties - and consequential loss arising from this

1.2 Fines and other penalties imposed by an authority on you (or anyone acting for you for breach of regulations relating to pollution

2 We do not insure you under this clause for:

2.1 fines and penalties for non-compliance with the International Convention for the Prevention of Pollution from Ships 1973 as modified by the Protocol of 1978 and subsequent protocols (and legislation implementing the convention) concerning the construction, adaptation and equipping of ships

2.2 breach of regulations in respect of your owned/leased carrying equipment which we do not insure for loss/damage

Qualifications

3 References to D4

The following paragraphs of D4 also apply to claims under 1.2 above:

3.1 Intentional/Reckless Conduct (D4:3)

3.2 Illegality (D4:4)

3.3 Enforcement of Reimbursement (D4:5)

1 We insure you for your liability:

1.1 for physical loss of and damage to cargo and consequential loss arising from this

1.2 for financial loss arising from delay in delivery of cargo

2 We do not insure you under this clause for:

2.1 liabilities excluded at G1:2

2.2 liabilities in respect of bullion, precious stones or cash/securities

Qualifications

3 Law, Conventions and Approved Contracts

3.1 We insure you only for liabilities under:

3.1.1 the provisions of a law or convention which apply compulsorily and cannot be avoided or limited by contract.

3.1.2 your standard trading conditions as approved by the Managers, or other approved contract (subject to 3.3)

3.1.3 our model conditions

3.2 Subject to the terms of your insurance, we insure you if it is established by a court or tribunal or the Managers agree settlement on the basis that you are not entitled to rely on any defence or limitation of liability under a law/ convention or contract as defined at 3.1

3.3 We insure you under approved contracts subject to:

3.3.1 any exclusions/qualifications in your Approved Contracts Schedule

3.3.2 all terms of your insurance unless we specifically waive these in the Schedule

3.4 If you contract on terms other than those specified at 3.1, we only insure the liabilities to which you would have been exposed if you had contracted on appropriate terms specified at 3.1

4 Limit: Valuable Cargoes

We do not insure you for liabilities in respect of the following cargoes unless your customer did not inform you that you were handling these cargoes and you could not, in the circumstances, reasonably have known that you were handling these cargoes. In this case we will apply a limit of USD 1 million each accident

a. processed tobacco/tobacco products
b. bottled spirits
c. precious jewellery/precious metal
d. valuable works of art
e. thoroughbred horses
f. computers/handheld electronic products/mobile telephones (and electronic components of these)

1 We insure you for liability for:

1.1 death, injury or illness of a crew member working on an insured ship

1.2 discrimination or harassment of a crew member by reason of gender, sexual orientation, race, ethnic origin or religion

2 We do not insure you under this clause in respect of:

2.1 Sums which you would have been entitled to recover from another party except for an agreement with the other party

2.2 An injury by accident or disease sustained outside your insured trading area

2.3 Anyone not deemed to be an employee*

2.4 Any late payment surcharge*

2.5 War risks

*within the meaning of applicable legislation

Qualifications

3 Repayment

If we are obliged by legislation to pay an amount for which we would not otherwise be liable under this clause, you will repay the amount to us

1 We insure you for your liability for:

1.1 death, injury or illness of a crew member working on an insured ship, in accordance with the Hong Kong Employees Compensation Ordinance and common law

1.2 your liability for discrimination or harassment of a crew member by reason of gender, sexual orientation, race, ethnic origin or religion

2 We do not insure you under this clause in respect of:

2.1 Sums which you would have been entitled to recover from another party except for an agreement with the other party

2.2 An injury by accident or disease sustained outside your insured trading area

2.3 Anyone not deemed to be an employee*

2.4 Any late payment surcharge*

2.5 War risks

2.6 Judgments not in the first instance made by a Hong Kong court

*within the meaning of applicable legislation

Qualifications

3 Repayment

If we are obliged by legislation to pay an amount for which we would not otherwise be liable under this clause, you will repay the amount to us

D10 applies to clauses D1-D9

1 Insured Ships & Insured Trading Area

We insure you under D1-D9 only for risks arising from the management, navigation or operation of your insured ships within your insured trading area

2 General Provisions

G1:5 does not apply to D1-D9

3 Additional Insurances

3.1 We may refuse to pay further claims if you effect additional insurances for:

3.1.1 disbursements, managers’ commission, profits or excess/increased value of the hull and machinery - exceeding 25% of the insured value of the ship

3.1.2 premiums:

a. exceeding the actual premiums of all interests insured or
b. for a period of more than 12 months or
c. for a sum that does not reduce pro rata monthly

3.1.3 returns of premium other than for an amount reflecting the actual returns allowable under any insurance which is irrevocable in the event of total loss of the ship, whether by risks insured or otherwise

3.1.4 total loss of ship on Policy Proof of Interest (PPI), Full Interest Admitted (FIA) or other similar terms

3.2 We will not refuse to pay claims by a joint assured - who is insured as mortgagee of the insured ship and who accepted this insurance without knowledge that additional insurance as at 3.1 had been effected

4 Chartered Ship

We do not insure you in respect of an insured ship while it is chartered to someone else