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Section 4: The sum insured as the limit of the liability of the insurer

  • Clause 4-18. Main rule

    The insurer is liable up to the sum insured for loss caused by any one casualty. The insurer is also liable up to an equivalent amount for the costs of measures taken to avert or minimise loss arising in connection with the casualty. If the costs of such measures exceed that amount, the hull insurer is also liable to the extent that the sum insured has not been exhausted by compensation paid for loss of or damage to the ship.

    The insurer has a separate liability in accordance with the rules contained in Cl. 13-3 and Cl. 14-1 for liability to third parties which is a result of collision or striking.

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    Clause 4-18. Main rule

    This Clause corresponds to Cl. 79 of the 1964 Plan, and Cefor I.3 and PIC Cl. 5.7. This provision establishes the principle that the insurer is liable up to the sum insured for each individual casualty, and shall apply in all branches where a sum insured is agreed. Sub-clause 1, first sentence , ...

  • Clause 4-19. Liability in excess of the sum insured

    Even if the sum insured is exceeded, the insurer is liable for:

    • loss as mentioned in Cl. 4-3 to Cl. 4-5, and Cl. 5-21, first sentence,
    • interest on the compensation.
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    Clause 4-19. Liability in excess of the sum insured

    This Clause corresponds to Cl. 80 of the 1964 Plan and the relevant Nordic Insurance Contracts Acts. It is a traditional principle in marine insurance that the assured, in addition to the cover which the insurance affords him within the limits of the sum insured, is entitled to separate cover of ...

  • Clause 4-20. Limit of liability where loss is caused by a combination of perils

    If the insurer, in accordance with Cl. 2-13, Cl. 2-14 or Cl. 2-16, becomes liable for part of the damage, his liability is limited to a corresponding proportion of the amounts mentioned in Cl. 4-18 and Cl. 4-19.

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    Clause 4-20. Limit of liability where loss is caused by a combination of perils

    This Clause corresponds to Cl. 81 of the 1964 Plan. The provision is based on ND 1956.323 NH Pan, where the question was how the limitation up to the sum insured was to be applied in the event of a casualty with a “mixed cause”. Liability for the damage to the ship was apportioned, with the marin...

  • Clause 4-21. Right of the insurer to avoid further liability by payment of the sum insured

    When a casualty has occurred, the insurer may avoid further liability by informing the assured that he will pay the sum insured.

    Loss referred to in Cl. 4-3 to Cl. 4-5, Cl. 4-7 to Cl. 4-12 and Cl. 5-21, first sentence, is recoverable in excess of the sum insured according to the rules contained in Cl. 4-18 and Cl. 4-19, provided that it is attributable to measures implemented before the assured was notified of the insurer's decision.

    In such case the insurer has no right to the object insured under Cl. 5-19.

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    Clause 4-21. Right of the insurer to avoid further liability by payment of the sum insured

    This Clause corresponds to Cl. 82 of the 1964 Plan. Under sub-clause 1 , the insurer may avoid further liability by paying the sum insured. There is no time-limit on the insurer’s right to limit his liability. The principle in sub-clause 1 is only applicable in property insurance. The insurer...