The consequence of the rules relating to trading areas being placed in Section 1 is that they automatically become applicable to all three types of insurance, hull, equipment and liability insurance.
The basic rule for vessels insured under Chapter 17 is that the trading areas are as indicated in Cl. 3-15 of the Plan with Appendix, unless otherwise provided by the insurance contract. In such case, the system of sanctions for conditional and excluded trading areas applies in the normal manner. For freighters, any departure from Cl. 3-15 must be explicitly stated in the insurance contract, cf. the fact that Cl. 17-3 applies only to fishing vessels. The normal procedure for freighters is that the trading areas in the insurance contract are linked to what is stated in the vessel's trading certificate. Furthermore, it is normally only a matter of ordinary and excluded trading areas, so that navigation in conditional trading areas, which are regulated in Cl. 3-15, sub-clause 2, is not relevant.
Such a procedure may also be used for fishing vessels, cf. sub-clause 1 which states that the provision only applies unless "otherwise provided in the insurance contract".
For fishing vessels, however, there is a need for a standard solution that is different from the one that follows from Cl. 3-15 and the Appendix. On the one hand, parts of the fishing fleet operate close to ice-strewn waters, and therefore need an extension of the normal trading areas northwards. On the other hand, there is a considerable risk associated with small fishing vessels that operate in remote waters. A special rule regarding trading areas for fishing vessels is therefore incorporated into Cl. 17-3, sub-clause 2. The trading area is 55 degrees east longitude south of Novaya Semlya and 65 degrees east longitude north of Novaya Semlya, cf. point III, second sentence, of the Appendix and maps nos. 4 and 5. To the west the limits are 65 degrees west longitude north of Saint John and 75 degrees west longitude south of Saint John, cf. point III, third sentence, and maps nos. 4 and 6. The trading area includes ports on the east coast of the USA and Canada north of 40 degrees north latitude, cf. the fact that the southerly limit at 40 degrees north latitude. On the other hand, the seaward approach to the St. Lawrence River and the Hudson Bay are outside the trading area.
The trading area to the north is open/scattered drift ice concentration (4/10-6/10) or higher. This limit applies in all directions, see point III, last sentence, of the Appendix. The purpose of this limitation is to ensure that the vessel does not enter waters where there is ice. It may be difficult to achieve such a limitation by means of a fixed geographical specification because the ice limit will vary considerably. The trading area is therefore linked to the ice charts issued by the Norwegian Meteorological Institute (DNMI). The ice charts distinguish between "ice free", "open water", "very open drift ice", "open drift ice", "close drift ice", "very close drift ice" and "fast ice". The trading limit is stated to be the limit between "very open drift ice" and "open drift ice", cf. the wording "open/scattered drift ice concentration (4/10-6/10) or higher". In this context, 4/10 indicates the lower limit for "open drift ice".
The ice limit may move during the period between the publishing of two ice charts. For the definition of trading limits, the most recent ice chart available from the Norwegian Meteorological Institute is the decisive factor. The question as to whether or not the chart is available must be subject to an objective assessment. If the assured has failed to obtain the most recent chart made available to the public, this must therefore be his risk.
If the ice limit has moved from one chart to the next, the assured has a duty to remove the vessel from waters where the concentration of ice is too high. In such a situation, however, the vessel must be given time to proceed into a permitted trading area. Consequently, the vessel cannot be deemed to have proceeded beyond the trading limits if it reacts promptly to new information about the ice limit, even if the vessel, strictly speaking, was in an excluded trading area for a brief period of time.
Within the specified trading area, premium rates must be determined on the basis of the operating area of each individual fishing vessel.
The provision relating to trading limits in the general part of the Plan stipulates ordinary trading limits, a conditional trading area and an excluded trading area. A vessel may sail within the conditional trading area, but if the insurer has not been notified of this, an additional deduction shall be made in the event of damage. For fishing vessels a slightly simpler system is used: if the assured wishes to proceed beyond the trading limits defined in the insurance contract, permission must be obtained in advance, possibly subject to payment of an additional premium. Areas beyond the trading limits specified in the insurance contract are automatically regarded as excluded. Trading in these areas shall therefore be treated in accordance with the rules relating to excluded trading areas in Cl. 3-15, sub-clause 5. This means that the insurance automatically ceases to be in effect when the fishing vessel enters the area, but that the insurance comes into effect again if the vessel leaves the excluded area before expiry of the insurance period. As mentioned above, a similar system can also be applied to freighters, but must in such case be agreed in the insurance contract.
The rules in Cl. 17-3 apply only to "fishing vessels". Consideration was given to whether there was a need to define the term "fishing vessels", but in view of the strict marking and registration rules, this was considered unnecessary. If the vessel is registered as a fishing vessel and has been given a registration number, it must be regarded as a fishing vessel under Cl. 17-3, even if it is used for purposes other than fishing in a specific situation.
The rules in Cl. 17-3 relating to trading areas must be viewed in conjunction with the authorities' regulation of the trading area for certain vessels, cf. the Norwegian Maritime Directorate's Regulation of 4 November 1981 No. 3793 relating to trading areas. The rules for fishing, whaling and sealing vessels are contained in Chapter IV. The trading area stipulated by the authorities is normally described in a trading certificate for the vessel in question. As a rule, the trading area in the trading certificate will be more limited than the area specified in sub-clause 1. If the insurer wants the trading area under the insurance to coincide with the trading area in the trading certificate, this must follow from the insurance contract, cf. sub-clause 1. Normally, however, this type of official regulation is only in the nature of a special safety regulation in relation to the insurance, cf. Cl. 17-5 (b). Under these rules, if a vessel proceeds beyond the trading limits specified in the trading certificate, this will only have consequences for the insurance coverage if the infringement can be ascribed to the assured, or someone with whom he may be identified, and if there is a causal connection between the infringement and the casualty. This means that the sanction will be somewhat less strict than it would have been pursuant to Cl. 3-15, sub-clause 3.
If the vessel has lost its trading certificate, the rules in Cl. 17-4 shall apply.
It may in certain cases be expedient to state the vessel's type of use in the insurance contract. Infringements of the stated type of use must in that event be considered an alteration of the risk under Cl. 3-8 et seq. If the vessel is used contrary to the stated purpose, the insurer is free from liability, provided that he can prove that he would not have accepted the insurance if he had known that the alteration would take place, cf. Cl. 3-9, sub-clause 1. If he would have accepted the insurance, but on other conditions, he is free from liability if the casualty was caused by the alteration of the risk, cf. Cl. 3-9, sub-clause 2. In addition, the insurer has the right to cancel the insurance, cf. Cl. 3-10.