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Section 2: Costs of measures to avert or minimise the loss, including salvage awards and general average

  • Clause 4-7. Compensation of the costs of measures to avert or minimise loss

    If a casualty threatens to occur or has occurred, the insurer is liable in accordance with the rules in Cl. 4-8 to Cl. 4-12 for the costs of measures taken on account of a peril insured against, provided that the measures were of an extraordinary nature and must be regarded as reasonable.

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    Clause 4-7. Compensation of the costs of measures to avert or minimise loss

    The provision states the general criteria for compensation of costs of measures to avert or minimise loss, including salvage awards and general average. The first part of the provision corresponds largely to Cl. 68 of the 1964 Plan as regards the criteria for the costs being recoverable. The...

  • Clause 4-8. General average

    The insurer is liable for any general average contribution apportioned on the interest insured. The hull insurer is also liable for general average contributions apportioned on freight or charterparty hire, provided that the assured is also the owner of this interest. The contribution is recoverable in accordance with a general average adjustment, duly drawn up according to applicable rules of law or such terms of contract as must be considered customary in the trade in question. The contribution is recoverable in accordance with the adjustment, even if the contributory value exceeds the insurable value of the interest. The insurer is similarly liable for salvage awards, insofar as they are not recovered in general average. However, he is not liable for interest payable after the due date under Cl. 5-6 if it is recovered in the general average adjustment.

    If the assured, as a result of a breach of the contract of affreightment, is precluded from claiming contributions from the other participants in the general average, the insurer shall cover the amount which, according to the rules of general average, falls on the interest insured.

    If the assured chooses not to claim contributions from the other interests in the general average, the insurer is, at the assured's option, liable either:

    • for any loss, damage, liability or costs which would have been recoverable in the general average up to the amount stipulated in the insurance contract, or
    • for the ship's general average contributions.

    The adjustment in accordance with the preceding sentence shall be based on the York-Antwerp Rules 1994, but Cl. 4-11, sub-clause 2, second sentence, shall apply correspondingly.

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    Clause 4-8. General average

    The second sentence of sub-clause 1 was editorially amended in the 2013 Plan to avoid any possible misunderstandings. As mentioned in the introduction to this Section, the insurer will very often be liable for losses incurred in connection with measures to avert or minimise loss in the sense that...

  • Clause 4-9. General average apportionment where the interests belong to the same person

    If ship, freight and cargo belong to the same person, but the conditions for a general average apportionment are otherwise met, the insurer is liable as if the contributing interests had belonged to different persons.

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    Clause 4-9. General average apportionment where the interests belong to the same person

    This Clause is identical to Cl. 71 of the 1964 Plan. The provision is necessary in order to implement the apportionment among the insurers with whom the assured has taken out his insurances. For the uninsured interests, the assured must bear his own proportionate share.

  • Clause 4-10. Damage to and loss of the object insured

    If the object insured has been damaged or lost as a result of a general average act, the damage or loss is recoverable in accordance with the rules relating to particular average, provided that this results in a more favourable outcome for the assured.

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    Clause 4-10. Damage to and loss of the object insured

    This Clause is identical to Cl. 72 of the 1964 Plan. The provision authorizes compensation for general average damage to the ship under the rules relating to particular average if this leads to a more favourable result for the assured. In practice, the question has also been raised as to whether...

  • Clause 4-11. Assumed general average

    The insurer is liable for loss incurred for the purpose of saving a ship in ballast or completing a voyage in ballast, provided that he would have been liable for the ship's proportion of such costs in accordance with a general average adjustment under the York-Antwerp Rules. Cl. 4-10 shall apply correspondingly.

    However, crew's wages and maintenance in accordance with Rule XI (b) of the York-Antwerp Rules are not recoverable for the time spent on permanent repairs. Commission costs, etc. and interest are recoverable under Cl. 4-3 and Cl. 5-4.

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    Clause 4-11. Assumed general average

    This Clause corresponds to Cl. 73 of the 1964 Plan. As mentioned in the introduction to this Section, the general average rules shall also apply when measures have been taken to save a ship in ballast (“assumed general average”), cf. sub-clause 1 . The rules also apply to losses incurred in order...

  • Clause 4-12. Costs of particular measures taken to avert or minimise loss

    If measures to avert or minimise loss under Cl. 4-7 have been taken without the rules in Cl. 4-8 to 4-11 being applicable, the insurer is liable for loss of or damage to the assured's property, and for liability and costs incurred by the assured. Loss referred to in Cl. 4-2 is nevertheless not recoverable under this provision.

    If loss, damage, liability or costs referred to in the preceding sub-clause are caused by measures taken for the benefit of several interests, the insurer is only liable for such proportion of the loss as may reasonably be attributed to the interest insured.

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    Clause 4-12. Costs of particular measures taken to avert or minimise loss

    This sub-clause corresponds to Cl. 68 and Cl. 69 of the 1964 Plan and relevant Nordic Insurance Contracts Acts (Nordic ICAs). As mentioned in the Commentary on Cl. 4-7, during the Plan revision, the view was that it was expedient to state the criteria for the insurer’s liability for costs of...