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Chapter 14: Separate insurances against total loss

  • Clause 14-1. Insurance against total loss and excess collision liability (hull interest insurance)

    If an insurance has been effected against total loss and excess collision liability (hull interest insurance), the insurer is liable for the amount stated in the insurance contract:

    • for total loss in accordance with the rules contained in Chapter 11, and Cl. 15-10, and
    • separately for the assured's liability for collision or striking in accordance with the rules in Cl. 13-1 to Cl. 13-3, where the hull insurer does not cover the liability because it exceeds a sum insured equivalent to the full agreed insurable hull value.
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    Clause 14-1. Insurance against total loss and excess collision liability (hull interest insurance)

    With the approach of the Plan to the separate forms of total loss cover, it is not necessary to draw a sharp dividing line between the interests covered under the various types of insurance. The primary issue will be one of expediency as to how the total capital value of the ship is to be...

  • Clause 14-2. Insurance against loss of long-term freight income (freight interest insurance)

    If an insurance has been effected against loss of long-term freight income (freight interest insurance), the insurer is liable for total loss in accordance with the rules contained in Chapter 11 for the amount stated in the insurance contract.

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    Clause 14-2. Insurance against loss of long-term freight income (freight interest insurance)

    As mentioned in relation to Cl. 14-1, it is unnecessary to define which interest is covered under the different insurances against total loss. Consequently, it is sufficient to state what freight interest insurance covers. The provision specifies that freight interest insurance like hull interest...

  • Clause 14-3. Common rules for separate insurances against total loss

    The insurer's liability is subject to the condition that the assured claims for a total loss against the hull insurer. If the hull insurer has paid the sum insured in accordance with Cl. 4-21, the assured may claim compensation from the insurer provided that he is prepared to transfer the wreck to the insurer. If both hull interest insurance and freight interest insurance have been effected, the hull interest insurer has first right to the wreck.

    The insurer is not liable for any loss arising from measures to avert or minimise the loss, cf. Cl. 4-7 to Cl. 4-12.

    The rules contained in Chapters 10 and 11 apply correspondingly.

    The rules contained in Cl. 1-4, Cl. 9-4, Cl. 9-5, first sentence, Cl. 9-6 and Cl. 9-8, cf. Cl. 9-2, apply correspondingly to the relationship between the insurers for the special insurances against total loss, etc., and the claims leader under the hull insurance.

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    Clause 14-3. Common rules for separate insurances against total loss

    A fundamental prerequisite for cover under the separate insurances against total loss is that the assured claim compensation for total loss from the hull insurer, cf. sub-clause 1, first sentence . Thus, the assured cannot demand payment under the separate insurance for total loss while at the sa...

  • Clause 14-4. Limitations on the right to effect separate insurances against total loss

    If hull interest insurance has been effected for more than 25 % of the agreed insurable value under the hull insurance which covers the same perils, the excess part of the hull interest insurance is void. The same applies to a freight interest insurance.

    If more than one hull interest insurance or freight interest insurance have been effected, the insurer's liability is reduced proportionately.

    The rules in sub-clause 1 do not prevent the assured from effecting, in addition to hull interest insurance and freight interest insurance, insurance with an open insurable value against loss of an existing time charterparty or a contract for a series of voyages. If the assured receives compensation under such an insurance, the liability of the freight interest insurer under Cl. 14-2 is reduced correspondingly.

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    Clause 14-4. Limitations on the right to effect separate insurances against total loss

    Cl. 14-4, sub-clause 1 contains a limitation on the right to effect a separate insurance against total loss, set at 25 % of the agreed  insurable value under the hull insurance for each of the insurances. Accordingly, if either hull or freight interest insurance has been effected for an amount...