A fundamental prerequisite for cover under the separate insurances against total loss is that the assured claim compensation for total loss from the hull insurer, cf. sub-clause 1, first sentence. Thus, the assured cannot demand payment under the separate insurance for total loss while at the same time demanding that the ship be repaired pursuant to Chapter 12. The insurer need not take over the wreck, however; it is sufficient that the assured claims compensation for total loss.
The provision only applies to the insurer's liability "for total loss". Cover of excess collision liability is not contingent on whether a claim for total loss has been filed with the hull insurer.
In one situation, however, it is not necessary that the assured has brought a claim for total loss: when the assured wishes to salvage the ship, but the hull insurer pays the sum insured pursuant to Cl. 4-21, cf. sub-clause 1, second sentence. If the salvage later proves to be unsuccessful, the assured is also entitled to payment under the separate total loss insurances. In that case, however, the separate total loss insurers will be entitled to take over the wreck under the rules in Chapter 5, Section 4 of the Plan. If separate insurances have been effected under both Cl. 14-1 and Cl. 14-2, the hull interest insurer has a first claim to the wreck, cf. sub-clause 1, third sentence.
Cl. 14-3, sub-clause 2 specifies that the insurance does not cover loss caused by measures taken to avert or minimise loss. It is established practice that the hull insurer covers both general average contributions and particular costs of measures taken to avert or minimise loss concerning the ship, and does not draw the separate total loss insurers into a proportional sharing of the loss under Cl. 4-12, sub-clause 2.
Under Sub-clause 3, the general rules on hull insurance must be given corresponding application to the separate insurances against total loss to the extent they are appropriate.
Sub-clause 4 gives application to some of the rules on the leading insurer's competence and authority in the relationship between the leading insurer under the hull insurance and the insurers of the separate total loss insurances. This applies to rules on notification of casualty, proceedings against third parties for the assured's liability or claims for damages, as well as the rules governing venue. The Plan does expand the competence of the leading insurer in relation to the separate insurers by giving corresponding application to Cl. 9-5 on salvage and Cl. 9-6 on removal and repairs. This means that the separate total loss insurers are bound by the leading insurer's decision on removal in connection with a claim for condemnation and measures in connection with a salvage operation. However, the leading insurer's decision to abandon a salvage operation will not bind the interest insurers, cf. Cl. 14-3, sub-clause 4, which only refers to Cl. 9-5, first sentence.