Class III – Hull & Machinery (War Risks)

DEFINITIONS

In these Rules, the following words and phrases shall have the following meanings unless the context otherwise requires.

General Rules
The General Rules for the time being of the Association.

Rules
The General Rules and the Class III Rules.

GENERAL

  1. Insurance in this Class is subject to the General Rules and to the Memorandum and Articles of the Association.
  2. The contract relating to entry in this Class shall be deemed to be separate from the contract for entry in any other Class.

RIGHT OF RECOVERY

Subject to the Rules, the Member shall be insured in respect of the entered ship in accordance with the Certificate of Entry concerned.

CLAIMS

  1. It is a condition precedent to the liability of the Association for any claim in respect of damage to the property of the Member that the claim is lodged with the Association within 12 months of the Member becoming aware of the existence of the damage concerned. If this condition precedent is not complied with, then the liability of the Association in respect of the claim concerned shall be extinguished.
  2. Unless otherwise recorded in the Certificate of Entry:
    1. if this entry is direct insurance, then the Claims Cooperation Clause (A) or (B) appearing in the Annex shall apply, and
    2. if this entry is reinsurance, then the Claims Control Clause appearing in the Annex shall apply.
  3. No other Clause appearing in the Annex shall apply to this insurance unless specifically incorporated herein by the Certificate of Entry.
  4. Want of due diligence

     

    1. If liabilities, losses or expenses are incurred as a result of want of due diligence by the Member, his managers, superintendents or onshore management, then the Directors may, in their discretion, reject or reduce the liability of the Association to the Member to the extent that such want of due diligence has, in their opinion, caused the liabilities, losses or expenses incurred.
    2. In exercising their discretion under paragraph 4.1 of this Rule the Directors may take into account any failure by the Member, his managers, superintendents or onshore management to comply with recommendation(s) in connection with the operation of the insured ship which may have been made in any Circular or Risk Bulletin published by the Association and published on its website the burden being on the Member to show that the liability, loss or expense could not have been avoided by compliance with such recommendation (s).

LAID UP RETURNS

There shall be no returns in the event of the vessel being laid up.

ENTRY AND NOTICE

  1. Unless otherwise agreed in writing at the time of entry and subject as otherwise provided in the Rules, the insurance shall begin and end at the time and dates stated in the Certificate of Entry.
  2. On expiry, the insurance shall be renewed for a new policy period of one year commencing with the end of the expiring policy period on the same terms and conditions as those in force for the expiring policy period, unless at the request of a Member other terms shall be agreed or unless:
    1. no less than 30 days’ notice shall have been given in writing by either the Member to the Managers or the Managers to the Member that the insurance specified in the notice is not to be renewed, or
    2. the Managers shall have given no less than 30 days’ notice that the terms of the insurance by the Association for the next following policy period are to be changed, in which case the insurance for the next following policy period shall be renewed upon such terms as may be agreed between the Member and the Managers prior to the end of the expiring policy period, and if no terms shall by then have been agreed, the insurance shall not be renewed;

    PROVIDED ALWAYS that if the Managers give 60 days’ notice of an alteration in the Rules of the Association and/or a decision of the Directors under Rule 7.4 of the General Rules, the Member shall be deemed to have agreed to and accepted such alteration and/or decision and the insurance shall be renewed in accordance with this sub-rule, unless notice has been given in accordance with sub-rule 2 (a) of this Rule.

  3. Notwithstanding anything herein contained, the Directors or the Managers may at any time suspend or terminate the insurance of any ship by the Association by giving seven days notice to a Member.
  4. An entered ship shall not be withdrawn from the Association at any other time or in any other manner except with the written consent of the Managers.
  5. The Member shall be under a duty to disclose to the Association all material circumstances in connection with any renewal of this insurance. The duty shall arise 45 days prior to the expiry of the current policy period and shall continue until the Association is irrevocably committed to renew this insurance.

SUSPENSION OF COVER

This Rule shall apply notwithstanding any other term of this insurance, including any terms incorporated by reference to standard market clauses:

  1. The coverage granted by this insurance may be suspended by the Association giving seven days notice (such suspension becoming effective on the expiry of seven days from midnight of the day on which notice of suspension is issued by or to the Association). The Association however agrees to reinstate this insurance subject to agreement between the Association and the Member prior to the expiry such notice of suspension as to the new rate of premium and/or condition and /or warranties.
  2. Whether or not such notice of cancellation has been given, this insurance shall be suspended automatically:
    1. on the outbreak of war (whether there be declaration of war or not) between any of the following countries:
      France,
      The Russian Federation,
      The People’s Republic of China,
      The United kingdom, and
      The United States of America,
    2. In the event of the entered ship being requisitioned either for title or use.
  3. In the event of automatic suspension of cover, the Association shall be under no obligation to reinstate cover.

Annex Claims Control Clause

CLAIMS CONTROL CLAUSE

Notwithstanding anything herein contained to the contrary, it is a condition precedent to any liability of the Association that:

  1. in the event of any claim being made or threatened against the Member in respect of damage caused by the entered ship, the Member shall give immediate notice thereof to the Association and the Member shall not agree to or make any settlement of any such claim without the written consent of the Association, and
  2. in the event of damage being suffered by the entered ship, the Member shall give immediate notice thereof to the Managers, and the Member shall not agree to settle any resulting claim without the prior consent of the Association.

CLAIMS CO-OPERATION CLAUSE (A)

  1. The Member shall, upon knowledge of any loss or circumstances which may give rise to a claim under this coverage, advise the Association as soon as practicable.
  2. The Member shall arrange for the Association to be furnished with all information available in respect of such loss or losses and shall co-operate with the Association in the adjustment and settlement thereof.

CLAIMS CO-OPERATION CLAUSE (B)

  1. The Member shall, upon knowledge of any circumstances which may give rise to a claim under this coverage, advise the Association as soon as practicable.
  2. The Member shall arrange for the Association to be furnished with all information available in respect of such loss or losses particularly, but not limited to, all survey advices and reports and any other technical reports commissioned by the Leading Underwriters, by whose decisions and settlements (excluding “ex-gratia” settlements) the Association has agreed to be bound.