Chapter 10: General rules relating to the scope of the hull insurance

• Clause 10-1. Objects insured

  The insurance covers:

  • the vessel,
  • equipment on board and spare parts for the vessel and its equipment, provided that the equipment or spare parts belong to the assured or have been borrowed, leased or purchased with a vendor's lien or similar encumbrance,
  • bunkers and lubricating oil on board.

  
  The insurance does not cover:

  • provisions, engine and deck accessories and other articles intended for consumption,
  • boats and equipment used for fishing, whaling, sealing and similar activities,
  • loose objects exclusively intended for securing or protecting the cargo,
  • loose containers intended for the carriage of cargo.
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  Clause 10-1. Objects insured

  In 2023 there were no changes in the Plan text itself except for replacing the term ship with vessel. In the Commentaries “equipment” is also meant to include more than radio and radar like digital equipment. Sub-clause 1 states the objects covered by hull insurance. Sub-clause 1 (a) and (b)...

• Clause 10-2. Objects, etc. temporarily removed from the vessel

  The insurance also covers objects referred to in Cl. 10-1, sub-clause 1, which are temporarily removed from the vessel as part of its operation or on account of repairs, reconstruction or similar work, provided that the objects are intended to be put back on board before departure. In the case of objects sent ashore to be repaired, cover remains in place until 3 months after the repair has been completed.

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  Clause 10-2. Objects, etc. temporarily removed from the vessel

  This Clause was amended in the 2 019 Version to provide a broader cover for objects temporarily removed on account of being repaired. The wording in the first sentence was amended and a new second sentence was introduced setting out the scope of cover for objects being repaired.  There is a clo s...

• Clause 10-3. Loss due to ordinary use

  The insurer is not liable for loss that is a normal consequence of the use of the vessel and its equipment.

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  Clause 10-3. Loss due to ordinary use

  The provision reflects a central principle of insurance law, viz. that the insurance shall only cover unforeseeable or unpredictable losses. The Clause excludes from the insurance cover certain losses which are regarded as regular operating expenses and which must therefore be borne by the owner....

• Clause 10-4. Insurance "on full conditions"

  Unless otherwise agreed, the hull insurer is liable for total loss, damage and collision liability in accordance with Chapters 11 to 13.

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  Clause 10-4. Insurance "on full conditions"

  Insurance “on full conditions” means that the assured has the full normal cover that follows from the rules of the Plan relating to hull insurance. Any limitations to this cover must be agreed specifically. On the other hand, “full conditions” does not imply that the insurer shall indemnify each...

• Clause 10-5. Insurance "against total loss only" (T.L.O.)

  If the insurance is effected "against total loss only", the insurer is liable for total loss in accordance with the rules in Chapter 11.

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  Clause 10-5. Insurance “against total loss only” (T.L.O.)

  Insurance “against total loss only” occurs in very special situations, e.g. in connection with the towage of a vessel that is to be sent to the breaker’s yard. In that event the insurer will only be liable for total loss in accordance with the rules in Chapter 11, i.e. where a vessel is lost or s...

• Clause 10-6. Insurance "against total loss and general average contribution only"

  If the insurance is effected "against total loss and general average contribution only", the insurer is liable for:

  • total loss in accordance with the rules in Chapter 11,
  • general average contributions and loss arising from assumed general average, cf. Cl. 4-7, Cl. 4-8, Cl. 4-9 and Cl. 4-11.
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  Clause 10-6. Insurance “against total loss and general average contribution only”

  As mentioned in the preceding clause, it is necessary under a “pure” total-loss insurance to split up each general average statement and only cover the contribution to the extent that it concerns sacrifices that have been made in connection with a relevant risk of a total loss. Similarly, it is...

• Clause 10-7. Insurance "against total loss, general average contribution and collision liability only"

  If the insurance is effected "against total loss, general average contribution and collision liability only", the insurer is liable for:

  • total loss in accordance with the rules in Chapter 11,
  • general average contribution and loss arising from assumed general average, cf. Cl. 4-7, Cl. 4-8, Cl. 4-9 and Cl. 4-11,
  • liability to third parties in accordance with the rules in Chapter 13.
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  Clause 10-7. Insurance “against total loss, general average contribution and collision liability only”

  Hull insurance under this Clause covers the same things as insurance in accordance with the preceding clause, plus collision liability to third parties, cf. Chapter 13 of the Plan. The insurer’s liability for loss in connection with measures to avert or minimise the loss, litigation costs, etc....

• Clause 10-8. Insurance "on stranding terms"

  If the insurance is effected "on stranding terms", the insurer is liable for:

  • total loss in accordance with the rules in Chapter 11,
  • general average contribution and loss arising from assumed general average, cf. Cl. 4-7, Cl. 4-8, Cl. 4-9 and Cl. 4-11,
  • liability to third parties in accordance with the rules in Chapter 13,
  • damage to the vessel which is a result of:
    • the vessel having run aground under such circumstances that it has to be refloated whether by assistance or its own power;
    • the vessel having capsized in such a manner that the masts are in the water or it is bottom up;
    • the vessel having collided with another vessel or with an iceberg;
    • a fire or an explosion, with the exception of damage caused in spaces containing machinery or battery packs by a fire or explosion originating there.
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  Clause 10-8. Insurance "on stranding terms"

  In the 2023 Version the Clause was simplified and adjusted to be in line with other clauses in respect of grounding. This provision affords the same cover as Cl. 10-7, plus a limited cover against damage and against loss in connection with measures taken to avert such damage. Sub-clause (d) defin...

• Clause 10-9. Duration of voyage insurance

  A voyage insurance attaches from the moment the vessel starts loading cargo or ballast. If the vessel is neither to load cargo nor ballast, the insurance attaches from the moment the vessel weighs anchor or slips its moorings in order to sail.

  The insurance remains in effect until the vessel has discharged its cargo or ballast at the appointed destination. If the assured fails to arrange for the discharge to proceed with reasonable speed, the insurance terminates at the time when the discharge operation should have been completed. If the vessel is not to discharge either cargo or ballast, the insurance terminates when the vessel has dropped anchor or is moored at a customary anchorage or mooring place.

  If the vessel, at the destination, starts loading cargo or ballast for a new voyage before discharging of the old cargo or ballast has been completed, the insurance terminates when the vessel starts loading cargo or ballast.

  If the voyage is abandoned after the insurance has attached, the place where the voyage ends shall be regarded as the destination.

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  Clause 10-9. Duration of voyage insurance

  Hull insurance is normally effected for a specific period of time, and the provision will consequently not be of any great practical significance. When deciding whether discharging “is proceeding with reasonable speed”, the issue of whether the assured has due grounds for withholding the cargo on...

• Clause 10-10. Extension of the insurance

  If, upon expiry of the insurance period, the vessel has sustained damage for which the insurer is liable and which is of such a nature that repairs are necessary to make the vessel compliant with technical and operational safety requirements, the insurance is extended until the vessel has dropped anchor or has been moored at the first place where permanent repairs can be effected. If repairs are carried out at that place, the insurance is extended until the repairs are completed.

  If it has been agreed that the new insurance shall attach from the moment the old one should have terminated, the time of attachment of the new insurance shall be adjusted correspondingly. If the vessel leaves the port of repairs before the old insurance should have expired pursuant to Cl. 1-5, liability is transferred to the new insurer at the time of sailing.

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  Clause 10-10. Extension of the insurance

  Sub-clause 1 was amended in the 2007 version in accordance with the amendments to the rules regarding seaworthiness and safety regulations in Cl. 3-22. The Clause otherwise corresponds to earlier versions of the 1996 Plan. Under sub-clause 1 in the earlier versions, the insurance was to be extend...

• Clause 10-11. Liability of the insurer if the vessel is salvaged by the assured

  If the vessel is salvaged by another vessel belonging to the assured, the insurer is liable as if the salvage operation had been carried out by a third party.

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  Clause 10-11. Liability of the insurer if the vessel is salvaged by the assured

  Under Section 442, second sub-clause, of the Norwegian Maritime Code, a salvage award may be claimed even if the salvaging vessel and the salvaged vessel belong to the same owner. The rule allows the crew to claim their share of the salvage award under Section 451, second sub-clause, of the...

• Clause 10-12. Reduction of liability in consequence of an interest insurance

  If the assured receives compensation under a hull interest insurance or a freight interest insurance, and the amount paid under the respective insurances exceeds 25 % of the agreed insurable value applicable to the hull insurance against the same perils, the hull insurer's liability is reduced correspondingly.

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  Clause 10-12. Reduction of liability in consequence of an interest insurance

  This Clause corresponds to Cl. 160 of the 1964 Plan, Cefor I.13 and PIC Cl. 5.28. Under Cl. 160 of the 1964 Plan, the hull insurer’s liability was reduced if the assured received compensation under a hull-interest insurance in an amount that exceeded 25% of the agreed hull value. For freight-inte...