The Plan

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Section 1: Common provisions

  • Clause 19-1. Perils covered/Ref. Clause 2-8 cf. Clause 2-10

    The insurance covers marine perils, cf. Cl. 2-8, and strikes and lock-outs. 

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    Clause 19-1. Perils covered/Ref. Clause 2-8, cf. Clause 2-10

    This Commentary was amended in the 2013 Plan. Cl. 19-1 applies to marine perils, cf. Cl. 2-8, and to strikes and lockouts. If the assured wishes to take out cover against riots, sabotage, piracy and mutiny, it must be done under Section 6 – Supplementary cover for war perils. This cover applies...

  • Clause 19-2. Insurance period/Ref. Clause 1-5

    The insurance remains in effect until the delivery date stipulated in the building contract. If delivery is later than that date, the insurance will automatically be extended subject to an additional premium as agreed in the insurance contract until the buyer has in actual fact taken delivery of the subject-matter insured.

    If the buyer has not taken delivery of the subject-matter insured, the insurance is automatically extended subject to an additional premium as agreed in the insurance contract until another buyer has in actual fact taken delivery of the subject-matter insured.

    Extension of the insurance according to sub-clauses 1 and 2 does not apply beyond nine months from the takeover date stipulated in the building contract.

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    Clause 19-2. Insurance period/Ref. Clause 1-5

    The provision and the commentaries were amended in the 2013 Plan. The term “newbuilding” is replaced with “subject-matter insured” because practice in recent years has shown that the Chapter is increasingly also applied in connection with the rebuilding of ships and building of other units....

  • Clause 19-2A. Premium in the event of total loss

    If the insurer compensates for total loss pursuant to Cl. 19-13, 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. 19-13, 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 19-2A. Premium in the event of total loss

    This Clause was added in 2016 and corresponds to Cl. 18-83. 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...

  • Clause 19-3. Co-insurance/Ref. Clause 8-1

    Unless otherwise agreed, the buyer is co-insured under Cl. 8-1. However, this does not apply to cover of expenses under Section 3.

    If liability as mentioned in Section 4 is covered by another insurance which the co-insured has effected, the co-insured’s cover under Section 4 is subsidiary in relation to that insurance.

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    Clause 19-3. Co-insurance/Ref. Clause 8-1

    The Commentary was amended in the 2013 Plan. The subject-matter insured will normally be built according to a building contract entered into between the yard and the buyer. In order to safeguard the interests of both parties in the subject-matter insured and components/parts to be incorporated in...

  • Clause 19-4. Transfer of the building contract/Ref. Clause 3-21

    If the building contract is transferred to a new shipyard, the insurance terminates as from the date of the transfer.

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    Clause 19-4. Transfer of the building contract/Ref. Clause 3-21

    It has been made some editorial amendments in the Commentary of the 2013 Plan. This Clause states that the insurance will terminate if the building contract is transferred to a new yard. In the Plan, a distinction is made between a transfer to a new buyer and a transfer to a new yard. If the...

  • Clause 19-5. Place of insurance

    The insurance is in effect:

    • while in the builder’s yard or other premises in the port where the builder’s  yard is situated and whilst in transit between these areas,
    • during seatrials carried out within the area specified by the certificate, including the trading area.


    If specifically agreed, the insurance also covers manufacture or transport outside the yard areas in the building port, insofar as this is set out in the insurance contract.

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    Clause 19-5. Place of insurance

    Cl. 19-5 sub-clause 1 (b) was amended in the 2013 Plan. This provision defines the geographical scope of the insurance. Sub-clause 1 (a) delimits the insurance to the builder’s yard or other premises in the port where the yard is situated and transport between these areas. A shipyard will often...

  • Clause 19-6. The sum insured as the limit of the liability of the insurer/Ref. Clause 4-18 and Clause 4-19

    In addition to the sum insured as mentioned in Cl. 4-18, sub-clause 1, the insurer is separately liable up to an amount corresponding to the sum insured for damage, expenses and liability under Section 3 and Section 4 caused by any one casualty. 

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    Clause 19-6. The sum insured as the limit of the liability of the insurer/Ref. Clause 4-18 and Clause 4-19

    This provision entails that the insurer may become liable for up to three sums insured: one sum insured for loss of or damage to the subject-matter insured according to Section 2, one sum insured for loss in connection with measures to prevent or minimise a casualty covered under Section 2, and o...

  • Clause 19-7. Escalation of the sum insured

    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 increase in value and the insurer(s) shall accept his/their share of the increase.

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

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    Clause 19-7. Escalation of the sum insured

    This Clause was new in the 2013 Plan. The rationale for this Clause is that the assured must be able to be certain that he is covered even if the contract price increases during the building process by, for instance, 5%. At present, insurers are only bound to a maximum of the sum insured fixed in...

  • Clause 19-8. 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 2, 3 and/or 4, only one deductible shall apply.

    Total loss, cf. Cl. 19-10 and Cl. 19-11, costs in connection with the settlement of claims, cf. Cl. 4-5, and loss in connection with measures to avert or minimise a loss, cf. Cl. 4-7 to Cl. 4-12, are recoverable without deductible.

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    Clause 19-8. Deductible

    Sub-clause 1 of the Clause states that the deductible must be specified in the insurance contract , and that if the one and the same casualty entitles the assured to compensation under Sections 2, 3 and 4, only one deductible applies. Sub-clause 2 emphasizes that no deductible shall apply to tota...