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Section 6-1: General rules relating to the scope of construction risks insurance

  • Clause 18-81. Scope of application

    The rules in Section 6 apply to construction, conversion and major upgrade of MOUs, including, when applicable, offshore installation, hook-up and commissioning works - “the Project”.

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    Clause 18-81. Scope of application

    Section 6 is drawn up first and foremost with the interests of the owner in mind when he e.g. converts a tanker into an FPSO and enters into various contracts with a yard and/or other contractors and/or suppliers for different parts of the total project. Such projects may be tailor-made for a...

  • Clause 18-82. Insurance period/Ref. Clause 1-5

    The insurance period commences at the date stipulated in the insurance contract. The insurance attaches in respect of each component, equipment and materials manufactured or procured for the MOU from the time the risk is transferred to the assured.

    The insurance remains in effect until the date stipulated as the completion of the Project. If actual completion is delayed, the insurance will automatically be extended subject to a pro rata additional premium or as agreed in the insurance contract until the actual date of completion but not in excess of nine months.

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    Clause 18-82. Insurance period/Ref. Clause 1-5

    The Clause corresponds to Cl. 19-2, but as opposed to Cl. 19-2 is focusing also on attachment of the insurance. Sub-clause 1, first sentence, presupposes that the attachment date of the insurance is expressly set out in the insurance contract. If not, the default position of Cl. 1-5, sub-clause 1...

  • Clause 18-83. Place of insurance – project locations

    The insurance is in effect anywhere in the world. 

    All locations of yards, workshops and/or work sites for construction and assembling of main components shall be agreed with the insurer. Any change of such location shall be notified to and agreed by the insurer.

    Sea trials are covered within the area allowed by the MOU’s certificates. 

    When agreed that the insurance covers offshore installation, hook-up and commissioning, the designated offshore location shall be set out in the insurance contract.

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    Clause 18-83. Place of insurance – Project Locations

    Sub-clause 1 provides that the insurance is in effect anywhere in the world, subject to the requirements under sub-clause 2, see further below. Thus the assured is free to place orders with suppliers and constructors wherever they may be located. At what time the insurance will attach for the...

  • Clause 18-84. Escalation

    If the value of the Project exceeds the sum insured, the assured shall notify the insurer of this as soon as possible. The assured shall pay a premium for the value increase and the insurer shall accept the value increase.

    Under no circumstances shall the sum insured exceed 110 % of the original sum insured unless the insurer has given prior approval of the increase and agreement on the conditions for such an increase has been reached.

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    Clause 18-84. Escalation

    This Clause is verbatim the same as Cl. 19-7. Reference is made to the Commentary to Cl. 19-7. 

  • Clause 18-85. Deductible

    For each casualty, the deductible stated in the insurance contract shall apply. If the same casualty entitles the assured to compensation according to Sections 6-2 and/or 6-3, only one deductible shall apply. 

    Total loss, cf. Cl. 18-89 and Cl. 18-90, costs in connection with the settlement of claims, cf. Cl. 4-5, and loss in connection with measures to avert or minimize a loss, cf. Cl. 4-7 to Cl. 4-12, are recoverable without deductible.

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    Clause 18-85. Deductible

    This Clause is verbatim the same as Cl. 19-8 apart from correcting the cross references as appropriate. Reference is made to the Commentary to Cl. 19-8. 

  • Clause 18-86. Premium in the event of total loss

    If the insurer compensates for total loss pursuant to Cl. 18-89, cf. Cl. 18-88, sub-clause 1, or pays the sum insured pursuant to Cl. 4-21, he is entitled to the entire agreed premium.

    If the insurer compensates for total loss pursuant to Cl. 18-89, cf. Cl. 18-88, sub-clause 2, he is only entitled to the proportion of the entire agreed premium that corresponds to the ratio between the compensation paid and the sum insured. 

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    Clause 18-86. Premium in the event of total loss

    The combined effect of Cl. 6-3, cf. Cl. 1-5, sub-clause 4, is that for insurance contracts attaching for more than one year, the insurer would be entitled to only one year premium in case he pays the sum insured as a result of total loss, constructive total loss or payment pursuant to Cl. 4-21....