Section 2 - NordicPlan

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Section 2: Liability of the assured to third parties

  • Clause 5-9. Duties of the assured when a claim for damages covered by the insurance is brought against him

    If a claim for damages, in respect of which liability is covered by the insurance, is brought against the assured, he shall notify the insurer forthwith. He shall safeguard the insurer's interests in the best manner possible, and, if necessary, avail himself of expert technical and legal assistance. The insurer is entitled to immediate access to all documents and other evidence.

    If the assured, intentionally or through gross negligence, fails to fulfil his duties under the preceding sub-clause, the insurer shall only cover such losses as would have fallen on him if these duties had been fulfilled.

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    Clause 5-9. Duties of the assured when a claim for damages covered by the insurance is brought against him

    This Clause corresponds to Cl. 92 of the 1964 Plan. The provision is closely bound up with Cl. 3-29 concerning the duty of the assured to notify the insurer of a casualty. Sub-clause 1 applies first and foremost where the assured is held liable for a loss which he has caused a third party, but it...

  • Clause 5-10. Right of the insurer to take over the handling of the claim

    The insurer may, subject to the consent of the assured, take over the handling of a claim brought against the assured and, if appropriate, institute legal proceedings in this respect in the name of the assured. This does not constitute an acknowledgement by the insurer of any obligation to cover any liability that might be imposed upon the assured.

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    Clause 5-10. Right of the insurer to take over the handling of the claim

    This Clause is identical to Cl. 93 of the 1964 Plan. The first sentence states that the insurer may, subject to the consent of the assured, take over the handling of a claim brought against him. From the insurer’s point of view, it will always be desirable to be able to take over the handling of...

  • Clause 5-11. Decisions concerning legal proceedings or appeals

    If there is disagreement between the insurer and the assured concerning the institution of legal proceedings or the lodging of appeals, the matter shall be finally decided by an umpire appointed jointly by the Nordic average adjusters.

    The umpire shall choose the solution which, in his discretion, is likely to result in the smallest overall loss for the assured and his insurers. The umpire shall not take into account any advantage that the assured or an insurer may retain or obtain by the assured accepting, or attempting to have awarded against him, a higher degree of blame in a collision case.

    If the assured does not comply with the umpire's decision, the insurer whose standpoint has been upheld by the umpire shall in no case have to cover any liability beyond what he had agreed to accept when the dispute was submitted to the umpire. If the assured institutes legal proceedings or appeals against a judgment contrary to the umpire's decision, and if the proceedings or the appeal result in the insurer's liability being less than what he had agreed to accept, the insurer shall, within the limit of what has been saved, pay his proportionate share of the litigation costs.

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    Clause 5-11. Decisions concerning legal proceedings or appeals

    Sub-clause 1 was amended in the 2013 Plan. Difficult questions may arise where the assured and his liability insurer disagree as to how to handle a dispute with a third party, for instance, whether to accept an offer of an out-of-court settlement, or whether to accept or appeal against a court...

  • Clause 5-12. Provision of security

    The insurer has no obligation to provide security for the assured's liability to third parties.

    The provision of such security by the insurer in no way affects the question of his liability to the assured.

    If the insurer has provided security for a liability which is proved not to concern him, the assured shall refund him his expenses in connection with the provision of such security.

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    Clause 5-12. Provision of security

    This Clause is identical to Cl. 95 of the 1964 Plan. Under sub-clause 1 , the insurer has no legal obligation to provide security. Such an obligation could result in liability for him vis-à-vis the assured in cases where the security is provided too late, or where no security is provided at all d...