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Chapter 9: Relations between the claims leader and co-insurers

  • Clause 9-1. Definitions

    "Claims leader" means the insurer who, at the time the insurance contract is entered into, is identified as claims leader.

    "Co-insurers" means other insurers who have accepted a proportion of the insurance of the interest against the same perils and who are directly liable to the assured.

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    Clause 9-1. Definitions

    This Clause corresponds to Cl. 139 of the 1964 Plan. Sub-clause 1 defines the term “claims leader” as the one who is stated as claims leader in the insurance contract . In practice, “claims leader” is used as the designation of the insurer who is to have contact with the assured in case of a...

  • Clause 9-2. The right of the claims leader to act on behalf of co-insurers

    Unless otherwise agreed, the claims leader is entitled to take the steps referred to in Cl. 9-3 to Cl. 9-9 with binding effect on the co-insurers. In all such cases he shall, as far as possible, take into consideration the interests of all the insurers.

    Notwithstanding that the claims leader has acted contrary to agreements with the co-insurers, or otherwise disregarded their interests, steps taken by him in matters governed by Cl. 9-3 to Cl. 9-8 shall be binding on the co-insurers in relation to the assured, unless the assured knew or ought to have known of the facts.

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    Clause 9-2. The right of the claims leader to act on behalf of the co-insurers

    Sub-clause 1 was amended in the 2007 version. The sub-clause is otherwise identical to earlier versions of the 1996 Plan. Sub-clause 1, first sentence , establishes the general principle that the claims leader has the right to bind the co-insurers in relation to the assured to the extent that thi...

  • Clause 9-3. Lay-up plan

    The claims leader may approve lay-up plans as required by Cl. 3-26.

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    Clause 9-3. Lay-up plan

    According to Cl. 3-26, the assured shall if the ship is to be laid up draw up a lay-up plan and submit it to the insurer for his approval. It is not practical to send this plan to all the co-insurers; it must be sufficient that it is approved by the claims leader. Other notifications pursuant to...

  • Clause 9-4. Notification of a casualty

    Notifications in connection with a casualty may be given to the claims leader.

    The claims leader, shall as soon as possible, pass on such notifications to the co-insurers concerned, including claims advice with estimated costs.

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    Clause 9-4. Notification of a casualty

    This Clause was amended in the 2013 Plan. Notifications of a casualty may be given to the claims leader with binding effect on the co-insurers, cf. sub-clause 1 . It is of great practical importance for the assured that, in the event of a casualty, he can look to the claims leader. If the...

  • Clause 9-5. Salvage

    The claims leader may take measures with a view to salvage. He may inform the assured that the salvage operation has been abandoned or that the insurers will limit their liability for the costs in accordance with Cl. 4-21.

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    Clause 9-5. Salvage

    This Clause corresponds to Cl. 142 of the 1964 Plan. The provision authorises the claims leader to decide if, and in the event how, a salvage operation shall be conducted, and to decide when to abandon the salvage operation or whether the insurer shall exercise his authority to limit his liabilit...

  • Clause 9-6. Removal and repairs

    The claims leader takes decisions pursuant to Cl. 3-20 and Cl. 12-10 to Cl. 12-13. If the assured has requested a condemnation of the ship, the claims leader will also decide whether the ship shall be moved in accordance with Cl. 11-6.

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    Clause 9-6. Removal and repairs

    This Clause corresponds to Cl. 143 of the 1964 Plan. The provision authorises the claims leader to grant requests for removal to a repair yard under Cl. 3-20 and to make decisions concerning repairs. The claims leader’s decision-making authority in relation to Cl. 3-20 is new and is based on...

  • Clause 9-7. Provision of security

    If the claims leader has, on his own and the co-insurers' behalf, provided a guarantee or counterguarantee for the assured's liability arising from collision, striking or salvage, he may claim a commission of 1 % of the guarantee amount. If an open guarantee is provided, the commission shall be calculated on the basis of the effective gross liability.

    If a co-insurer has been notified that the claims leader has provided a guarantee in accordance with sub-clause 1, the co-insurer may not pay compensation in connection with the liability directly to the assured.

    The co-insurer may not set off against the claims leader counterclaims against the assured, unless he has made a special reservation to that effect prior to the provision of security.

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    Clause 9-7. Provision of security

    This provision corresponds to Cl. 144 of the 1964 Plan. Sub-clause 1 regulates the claims leader’s right to commission from the co-insurers upon the provision of security. Under Cl. 5-12 the insurer does not have any obligation to provide security for the assured’s liability to third parties....

  • Clause 9-8. Disputes with third parties

    If a third party makes a claim against the assured which is covered by the insurance, or if the assured has a claim for damages to which the insurers are subrogated, the claims leader shall decide questions concerning the institution of legal proceedings, appeals and amicable settlements.

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    Clause 9-8. Disputes with third parties

    This Clause is identical to earlier versions of the 1996 Plan. The Commentary was amended in the 2007 Version in accordance with the amendment to Cl. 9-2. The claims leader should also be empowered to represent all the co-insurers in the event of legal proceedings against a third party. The Claus...

  • Clause 9-9. Claims adjustment

    The claims leader shall see to it that a claims adjustment is drawn up. The adjustment is binding on co-insurers, provided that it is in accordance with the insurance conditions.

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    Clause 9-9. Claims adjustment

    The provision establishes that it is the claims leader who is responsible for the claims adjustment. In accordance with established practice, this is binding on the co-insurers, provided that it is in accordance with the insurance conditions. This implies that the claims leader’s discretionary...

  • Clause 9-10. Insolvency of a co-insurer

    If a co-insurer is insolvent, the assured shall cover his proportion of expenses incurred by the claims leader on behalf of the assured. The insolvent co-insurer’s share of expenses incurred by the claims leader on behalf of all of the insurers shall be shared pro rata by the claims leader and the other co-insurers.

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    Clause 9-10. Insolvency of a co-insurer

    This Clause was amended in the 2013 Plan. The provision regulates the risk of a co-insurer becoming insolvent when the claims leader has had disbursements, part of which the co-insurer should have paid. According to the first sentence , the assured bears the risk of a co-insurer’s insolvency if t...

  • Clause 9-11. Interest on the disbursements of the claims leader

    The claims leader is entitled to charge interest on disbursements he has made on behalf of all of the insurers or the assured. Cl. 5-4 shall apply correspondingly.

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    Clause 9-11. Interest on the disbursements of the claims leader

    In practice, the claims leader will often make disbursements on behalf of all the insurers, e.g. for surveys. Accordingly, there is a need for a rule which entitles him to charge interest on these disbursements. For disbursements made by the claims leader on behalf of the assured, the duty of the...