Commentary

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Section 3: Trading areas

  • Clause 15-9. Excluded and conditional trading areas

    The provision starts with the general trading areas set out in Cl. 3-15 and is based on the assumption that they will also apply to war risks insurance. In addition, the provision opens the door to the war risk insurer being able to determine different trading areas at any time. This implies, firstly, that the insurer may stipulate more limited trading areas than those set out in Cl. 3-15 at the time the insurance contract is entered into and, secondly, that the war risks insurer will be entitled to change a previously established trading area while the insurance is running. The change may mean a (further) limitation of the trading area or an expansion in relation to what applied at the time the insurance was effected.

    The provision is based on the distinction in Cl. 3-15 between conditional areas, where the ship may continue to sail subject to an additional premium, and excluded areas, where the insurance cover is suspended unless trade within the excluded area is agreed in advance by the insurer.

    War risks insurers normally adapt the limitations of the trading area issued by the Joint War Committee in London from time to time. Since the English conditions do not distinguish between conditional and excluded areas, some confusion may arise if these limits are adapted to a war risks insurance based on Chapter 15 of the Plan. Unless it is made expressly clear that any of these limitations of the trading area shall be deemed excluded areas, the presumption must be that they shall be deemed to be conditional areas.

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    Clause 15-9. Excluded and conditional trading areas

    In addition to Cl. 3-15 the following applies: The insurer may at any time designate new or change existing trading areas. He may in this connection decide that: certain areas shall be designated as conditional areas. The ship may still sail in such areas, but subject to an additional premium....