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Chapter 8: Co-insurance of third parties

  • Clause 8-1. Rights of third parties against the insurer

    If the insurance is explicitly effected for the benefit of a third party, the insurance also covers this party’s interests within the scope and overall limits of the insurance.

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    Clause 8-1. Rights of third parties against the insurer

    The Clause corresponds to Cl. 8-1, sub-clause 1, of the 2013 Plan. In Version 2016, the last part of the sub-clause was added and the identification provision previously found in the sub-clause was moved to Cl. 8-3, sub-clause 3. NMIP 2013 Cl. 8-1, sub-clause 2, had references to Cl. 7-3,...

  • Clause 8-2. Protection of third parties against subrogation claims from the insurer

    The insurer does not have any right of subrogation against the co-insured third party unless and to the extent that such right is specified in the insurance contract or the co-insured third party has undertaken an express contractual obligation to an assured to remain liable for losses of the kind otherwise covered by the insurance.

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    Clause 8-2. Protection of third parties against subrogation claims from the insurer

    The Clause was new in 2016. The first part of the provision states the main rule: The insurer has no right of subrogation against the co-insured third party. As mentioned in the General Commentary to Chapter 8 above, an important reason why the person effecting the insurance agrees to name the...

  • Clause 8-3. Application of the rules in Chapter 3 and Clause 5-1

    The rules contained in Chapter 3, Section 1, shall apply correspondingly to the co-insured third party, provided that he is aware of the fact that he is named in the policy.

    The insurer may invoke the rules in Chapter 3, Sections 2 - 5, or Cl. 5-1 against a co-insured third party.

    The insurer may invoke the rules relating to identification in Cl. 3-36 to Cl. 3-38 against a co-insured third party.

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    Clause 8-3. Application of the rules in Chapter 3 and Cl. 5-1

    The Clause was new in 2016. Sub-clause 1 is identical with Cl. 8-2, sub-clause 1, of the 2013 Plan, whereas Cl. 8-2, sub-clause 2, of the 2013 Plan is deleted. Sub-clause 3 repeats the identification clause found in the 2013 Plan, Cl. 8-1 in fine .  The provision in sub-clause 1 regulates a...

  • Clause 8-4. Amendments and cancellation of the insurance contract

    If the insurance contract has been amended or cancelled, this shall also apply in relation to the co-insured third party.

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    Clause 8-4. Amendments and cancellation of the insurance contract

    This Clause corresponds to Cl. 8-3 of the 2013 Plan. The Clause was not amended in substance in 2016, but the words “any co-insured third party” has been replaced by the words “the co-insured third party”. The provision gives the person effecting the insurance a far-reaching authority to amend or...

  • Clause 8-5. Handling of claims, claims adjustment, etc.

    Decisions required in respect of casualties, adjustments or claims against third parties may be made without the participation of any co-insured third party.

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    Clause 8-5. Handling of claims, claims adjustment, etc.

    The Clause was new in 2016, but corresponds to the provision found in Cl. 8-1, sub-clause 2, of the 2013 Plan which contained a reference to Cl. 7-3, sub-clause 1. The provision states that a co-insured third party is not entitled to participate in discussions in respect of casualties, adjustment...

  • Clause 8-6. Other insurance

    If the co-insured third party’s claim for compensation under the insurance is also covered by other insurance he has effected, cover under this Chapter is subsidiary to that other insurance.

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    Clause 8-6. Other insurance

    The Clause was new in 2016. The provision prescribes that the insurance is subsidiary to another insurance that the co-insured third party has taken out. Consequently, the insurer shall only be liable to the extent that the co-insured third party has not obtained cover under the other insurance,...

  • Clause 8-7. Independent co-insurance of mortgagees and named third parties

    If it has been explicitly agreed that the interest of a mortgagee or a named third party shall be independently co-insured, the insurer may not plead that he has no liability due to an act or omission from the person effecting the insurance or another assured under the rules contained in Chapter 3 and Cl. 5-1.

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    Clause 8-7. Independent co-insurance of mortgagees or named third parties

    The Clause was new in 2016 and corresponds to Cl. 8-4 of the 2013 Plan. The title was altered to clarify that the Clause applies both to mortgagees and to named third parties. Certain modifications were also made in the text itself.  The provision gives extended protection to a mortgagee and a...