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Chapter 21 Liability insurance

  • Clause 21-1. Scope of application

    The rules in this Chapter shall only apply to the extent that this follows from the insurance contract.

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    Clause 21-1. Scope of application

    This Clause was new in 2019 as a consequence of the independent status of the liability cover. As in all special covers under the Plan, the insurance in Chapter 21 is only applicable if agreed upon in the insurance contract between the parties.

  • Clause 21-2. Renewal of the insurance/Ref. Clause 1-5

    Upon expiry of the insurance period, the insurance is automatically renewed for 12 months at the same premium and on the same conditions.

    If the insurer does not wish to renew the insurance, or if it only wishes to renew it at a different rate or on different conditions, it must notify the person effecting the insurance of this no later than one month prior to expiry of the insurance period.

    If the person effecting the insurance wishes to cancel the insurance or if it does not wish to accept renewal at a new rate or on new conditions, it must notify the insurer of this no later than 14 days prior to expiry of the insurance period.

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    Clause 21-2. Renewal of the insurance/Ref. Clause 1-5

    This Clause was new in 2019 because of the independent status of the liability cover. Reference is made to the Commentary to the equivalent Clause 20-2.

  • Clause 21-3. Classification and vessel inspection/ Ref. Clause 3-14 and Clause 3-8

    If the vessel at the start of the insurance period is classified with a classification society approved by the insurer, Cl. 3-14 and Cl. 3-8, sub-clause 2, shall apply.

    Vessels not ascribed to any class shall at the start of the insurance period have a valid certificate in accordance with the rules of the vessel's flag state. Expiry of a valid certificate is considered equivalent to loss of class, cf. Cl. 3-14.

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    Clause 21-3. Classification and vessel inspection/Ref. Clause 3-14 and Clause 3-8

    This Clause was new in 2019 as a consequence of the independent status of the liability cover. Reference is made to the Commentary to the equivalent Clause 20-3.

  • Clause 21-4. Savings to the assured

    If the assured as a result of a casualty or liability covered by the insurance has received additional income, saved expenses or averted liability which it would otherwise have incurred and which would not have been covered by the insurer, the latter may deduct from the compensation an amount equivalent to the advantage gained.

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    Clause 21-4. Savings to the assured

    The Clause is taken from the P&I conditions in the 1964 Plan, but contains a general principle of insurance law and has therefore been generalised .

  • Clause 21-5. Perils covered

    The insurer covers liability and other loss as set forth in Cl. 21-6 to Cl. 21-18 if such liability or loss has occurred in direct connection with the operation of the vessel covered by the insurance. If a vessel is used as a seine vessel, the insurance also covers liability incurred by the other vessels in the same seine team.

    The insurance covers war perils as well as marine perils, cf. Cl. 2-8 and Cl. 2-9. Cl. 15-5, Cl. 15-6 and Cl. 15-8 apply correspondingly.

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    Clause 21-5. Perils covered

    Former Cl. 17-33.  Sub-clause 1, first sentence  specifies the perils covered by the insurance as losses mentioned in Cl. 21-6 to Cl. 21-18. The provision reflects the basic principle that the P&I insurance only covers liability and other losses which are specifically stated. In other words, this...

  • Clause 21-6. Liability for personal injury

    The insurer covers the assured’s liability resulting from personal injury or loss of life, as well as liability for salvage awards for the saving of life. The assured’s liability to the crew or their survivors for wages in the event of a shipwreck, death, illness or injury is nevertheless not covered.

    The assured’s liability for the loss of life or injury to passengers is only covered where this is evident from the insurance contract or from a subsequent written agreement between the insurer and the person effecting the insurance.

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    Clause 21-6. Liability for personal injury

    Former Cl. 17-34.  Sub-clause 1  defines the cover in the event of personal injury or loss of life. The main rule in the first sentence affords a very comprehensive cover. If the injury is “sustained in direct connection with the operation of the vessel covered by the insurance”, the insurer cove...

  • Clause 21-7. Liability for property damage

    The insurer covers the assured’s liability resulting from damage to or loss of objects belonging to a third party.

    Liability is excluded for the following:

    • costs of repairs of packaging, re-bagging, sorting and similar measures which must be regarded as part of the fulfilment of a transport obligation,
    • damage to or loss of vessel’s equipment, fishing tackle or other equipment which has been borrowed, leased or purchased with a vendor’s lien, or which belongs to the charterer of the vessel,
    • damage to or loss of objects which belong to the crew or other persons accompanying the vessel who have their duties on board,
    • loss occurring while the vessel is calling at a structure for the keeping of live fish. By a call is meant arrival, anchoring, working, discharging, loading and leaving,
    • damage to or loss of live fish carried in the vessel,
    • damage to or loss of cargo due to a leak in a wooden vessel.
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    Clause 21-7. Liability for property damage

    Former Cl. 17-35. The Clause was amended in 2016 by adding new letters (d), (e) and (f) to sub-clause 2. The said letters are identical to previous sub-clause 2 (b), (c) and (a) respectively. Sub-clause 3 was consequently deleted. The following sentence was added to new letter (d) "By a call is...

  • Clause 21-8. Liability for description

    The insurer covers the assured’s liability for inadequate or incorrect description of the goods or other incorrect information in the bill of lading or similar document, unless the assured or the master of the vessel knows that the document contains an incorrect description of the cargo, the quantity of the cargo or the condition of the cargo.

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    Clause 21-8. Liability for description

    Former Cl. 17-36.  The  first sentence  establishes that the insurer covers the assured’s liability for inadequate or incorrect description of the goods or other incorrect information in the bill of lading or similar document. In principle, the liability covers all types of liability under bills ...

  • Clause 21-9. Liability for the misdelivery of goods

    The insurer covers the assured’s liability for misdelivery of transported goods to an unauthorised recipient.

    The insurer does not, however, cover liability, loss and costs resulting from the fact that the goods were handed over to a person who did not present a proper bill of lading, unless the goods were carried by the assured under a non-negotiable document and handed over as stated in the document, and the assured may be held liable under a negotiable document issued by or on behalf of someone other than the assured for the carriage of the goods, partly in the assured’s vessel, partly in another vessel.

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    Clause 21-9. Liability for the misdelivery of goods

    Former Cl. 17-37.  The cover of the assured’s liability for wrongful delivery is on inter alia Gard’s P&I Conditions. The basic principle is admittedly still that the assured’s liability for wrongful delivery is covered, see  sub-clause 1.  However, due to sub-clause 2, this principle will in...

  • Clause 21-10. General average contributions

    The insurer covers the assured’s loss resulting from the assured being unable to recover the cargo’s general average contribution as a result of a breach of the contract of affreightment.

    The insurer also covers the assured’s necessary costs in connection with the recovery of the cargo’s contribution.

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    Clause 21-10. General average contributions

    Former Cl. 17-38.  Sub-clause 1  establishes that the insurer covers the assured’s loss resulting from his being precluded from claiming cargo’s contribution in general average by reason of a breach of the contract of affreightment. In the event of general average, the assured will normally be...

  • Clause 21-11. Liability for the removal of wrecks

    The insurer covers the assured’s liability for the removal of wrecks provided such removal has been ordered by the authorities. The insurer’s liability covers the assured’s liability for disposal and destruction.

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    Clause 21-11. Liability for removal of wrecks

    Former Cl. 17-39.  The  first sentence of the  provision provides that the insurer shall cover the assured’s liability for removal of wrecks, provided such removal is ordered by the authorities. If the assured becomes liable for the removal of a wreck, it is normally because the vessel has been...

  • Clause 21-12. Liability for special salvage compensation

    The insurer covers the assured’s liability for special compensation to the salvor, provided such compensation is fixed under the relevant sections of the Nordic Maritime Codes or is based on some other legislation or contract founded on Article 14 of the International Convention on Salvage, 1989.

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    Clause 21-12. Liability for special salvage compensation

    Former Cl. 17-40. According to this provision the insurer is required to cover the assured’s liability for special compensation to the salvor where the assured is required to pay such compensation under the rules of the relevant sections of the Nordic Maritime Codes or other rules of law or...

  • Clause 21-13. Liability for bunker oil pollution damage and damage to the environment

    The insurer covers the assured’s liability for bunker oil pollution damage in accordance with the provisions laid down in national legislation that are based on the provisions of the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001.

    The insurer covers the assured ́s liability for damage to the environment.

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    Clause 21-13. Liability for bunker oil pollution damage and damage to the environment

    Former Cl. 17-41. Sub-clause 1  of the provision establishes that the insurer covers the assured’s liability for bunker oil pollution damage in accordance with the provisions laid down in national legislation that are based on the provisions of the International Convention on Civil Liability for...

  • Clause 21-14. Stowaways

    The insurer covers the assured’s liability and direct expenses resulting from the vessel having stowaways on board, but not costs of maintenance and accommodation which either have been or could have been provided for them on board.

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    Clause 21-14. Stowaways

    Former Cl. 17-42.  The provision regulates expenses and liability relating to stowaways. The assured’s liability and direct expenses resulting from the vessel having stowaways on board are covered. Such liability is first and foremost relevant in the event of deportation, etc., if the stowaways g...

  • Clause 21-15. Liability for fines, etc.

    The insurer covers the assured’s liability for:

    • immigration and customs fines,
    • fines resulting from the conduct of the crew,
    • expenses in connection with orders for the deportation of the crew, passengers or other persons who accompany the vessel but who are not part of the crew.


    Even if the assured does not become personally liable, the insurer covers such fines and expenses where it is possible to enforce payment by retention of or levying distraint on the vessel.

    However, the insurer does not cover the assured’s liability for fines resulting from:

    • overloading of the vessel,
    • the vessel carrying more passengers than allowed, 
    • illegal fishing, 
    • inadequate maintenance of the vessel’s lifesaving or navigationequipment, 
    • absence of prescribed certificates on board the vessel.
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    Clause 21-15. Liability for fines, etc.

    Former Cl. 17-43.  According to  sub-clause 1 (a) , the assured’s liability for immigration and customs fines is covered regardless of who has committed the offence. It is sufficient that the assured becomes liable and that liability has been incurred in direct connection with the running of the...

  • Clause 21-16. Liability for social benefits for the crew

    The insurer covers the assured’s liability under the law or collective wage agreement for:

    • care and maintenance of the crew on shore in the event of illness or injury,
    • costs of the crew’s travel home, including maintenance, in the event of illness or injury or following a shipwreck,
    • costs in connection with the funeral and sending home of the cinerary urn and the deceased’s personal effects,
    • costs in connection with the crew’s travel home, including maintenance, in the event of the illness or death of a close relative.

    No deductible shall be charged, unless otherwise agreed.

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    Clause 21-16. Liability for social benefits for the crew

    Former Cl. 17-44. Sub-clause 1  establishes that the insurance covers the assured's liability for certain specific social benefits for the crew in accordance with the law or collective wage agreements. Under  sub-clause 1 (a) , the care and maintenance of the crew on shore in the event of illness...

  • Clause 21-17. Travel expenses for replacement crew

    The insurer covers the assured’s necessary travel expenses for replacement crew when the master or other officers have died or signed off due to injury or sudden illness. The cover is, however, limited to travel expenses to the first port of call after the death, or the port where the signing off took place, even if the replacement is sent to a port further away.

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    Clause 21-17. Travel expenses for replacement crew

    Former Cl. 17-45.  The  first sentence  establishes that the insurer must cover the necessary expenses of a replacement, and is based on the fact that a number of countries have rules concerning minimum manning and refuse to let a vessel leave a port unless these requirements are met. If the mast...

  • Clause 21-18. Expenses for disinfection and quarantine

    The insurer covers the assured’s necessary expenses in connection with a quarantine order or disinfection of the vessel or crew due to infectious diseases on board. Operating expenses during the stay are not covered.

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    Clause 21-18. Expenses for disinfection and quarantine

    Former Cl. 17-46.  The  first sentence  deals with the cover of the costs of quarantine orders and disinfection of the vessel. By “quarantine orders” is meant orders from public authorities, and the expenses are “necessary” to the extent that they must be incurred in order to comply with the orde...

  • Clause 21-19. Limitation due to other insurance, etc.

    The insurer does not cover:

    • loss which due to its nature is insurable under the rules in Part II, Part III, or Part IV, Chapters 17 and 20,
    • loss as mentioned in Cl. 13-1, sub-clause 2 (a). Under the insurance of a fishing vessel, the insurer nevertheless covers liability incurred during towage of vessels which belong to the same fishing team and which are not covered under the general hull insurance conditions,
    • loss as mentioned in Cl. 4-16, provided that it could have been covered by fire insurance, cargo insurance or other general insurance.


    However, the insurer covers loss as mentioned in Cl. 13-1, to the extent that it exceeds the amount which according to Cl. 13-3 is recoverable under a hull insurance with a sum insured that covers the full value of the vessel. For loss as mentioned in Cl. 4-16 a deduction shall also be made for the amount that could have been covered by an insurance as mentioned in sub-clause 1 (a) and (c).

    In the event of liability for personal injury and social benefits for the crew, the insurer does not cover:

    • loss covered through national insurance benefits or benefits from workers’ or employment insurance schemes,
    • loss which due to its nature is covered by mandatory insurance benefits under a collective wage agreement and which is financed by the employer liable to pay compensation,
    • loss which due to its nature is covered by the industrial injuries insurance legislation.
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    Clause 21-19. Limitation due to other insurance, etc.

    Former Cl. 17-47.  The definition in  sub-clause (a)  concerns losses which according to their nature are insurable under a hull insurance according to Part II of the Plan, or Part IV, Chapters 17 and 20, or other insurances for ocean-going vessels in Part III of the Plan. The provision establish...

  • Clause 21-20. Safety regulations/Ref. Clause 3-22 and Clause 3-25

    The following special safety regulation shall apply, cf. Cl. 3-25, sub-clause 2:
    The assured shall disclaim liability for damage to and loss of cargo and liability to passengers insofar as this is allowed under current rules of law.

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    Clause 21-20. Safety regulations/Ref. Clause 3-22 and Clause 3-25

    Former Cl. 17-48.  This rule is patterned on the limitation of liability rule in  inter alia  Gard’s Conditions, but in the form of a safety regulation. The assured’s duty to incorporate disclaimers of liability is tied directly to his right to exclusion of liability and limitations of liability...

  • Clause 21-21. Assured’s fault

    The insurer does not cover loss which the assured has caused by a grossly negligent act or omission, or which has been caused by its acting on an interpretation of rules of law or contractual terms which  it ought to have known was incorrect or knew to be uncertain when another reasonable course was open to it.

    The rules in sub-clause 1 shall not apply if the assured is the master of the vessel or a member of the crew and its negligence is of a nautical nature.

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    Clause 21-21. Assured's fault

    Former Cl. 17-49. Sub-clause 1  regulates the causing of an event insured against by a negligent act or omission. The provision supplements and modifies Cl. 3-32 et seq. It follows from Cl. 3-32 that the insurer does not cover liability which the assured has intentionally caused, whereas in the...

  • Clause 21-22. The insurer’s rights in the event of liability

    If the insurer is willing to settle a matter amicably or to pay the liability amount, it will not be liable for any further expenses in the dispute.

    The insurer has the right to pay any compensation directly to the injured party.

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    Clause 21-22. The insurer's rights in the event of liability

    Former Cl. 17-50. By the term “the liability amount” is meant the lowest of the injured party’s claim, the limitation amount under the law and the insurer’s maximum liability under Cl. 21-25. Sub-clause 2  refers to the mandatory provision in Section 7-8 of the Norwegian Insurance Contracts Act....

  • Clause 21-23. Liability for loss that occurred during other transport, etc.

    The insurer does not cover liability to passengers and for cargo which arises:

    • during the period prior to loading or after discharging or during transport to and from the vessel covered by the insurance when the goods are not in the carrier’s custody,
    • while the goods are in the custody of a sub-carrier, if it has been explicitly agreed that the sub-carrier in question shall carry out a specific part of the transport,
    • during transport of passengers carried out by another carrier, when the latter is named in the contract of affreightment and shall according to that contract carry out the relevant part of the transport, or when the passenger, according to the contract, has the right to use, wholly or in part, the other carrier,
    • during the period prior to the passenger’s embarkation and after disembarkation, with the exception of liability during marine transport between the vessel and shore, which is included in the ticket price or is carried out by a means of transport made available by the carrier.
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    Clause 21-23. Liability for loss that occurred during other transport, etc.

    Former Cl. 17-51.  Sub-clause (a)  refers to Sections 254 and 274 of the Norwegian Maritime Code, while s ub-clause (b)  refers to Section 285 of the same Act. The provision must also be seen in conjunction with the basic principle in Cl. 21-5 to the effect that the liability insurer only covers...

  • Clause 21-24. Limitation of liability for fishing vessels

    The insurer does not cover liability between the participants in the same fishing team nor between pair trawlers.

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    Clause 21-24. Limitation of liability for fishing vessels

    Former Cl. 17-52. The provision refers to the “knock-for-knock” principle which is mentioned in the Commentary on Cl. 17-9 and Cl. 17-16. When several vessels are fishing together in the same fishing team or as pair trawlers, damage to the assured’s own and other vessels with accessories and catc...

  • Clause 21-25. Limitation of the insurer’s liability for measures to avert or minimise loss

    In no case does the insurer cover, as a loss incurred in connection with measures to avert or minimise loss pursuant to Cl. 4-12, the following:

    • costs of discharging, reloading, restowing, storing, lightering and similar measures resulting from the fact that the vessel was overloaded, too heavily loaded for the voyage or poorly trimmed, or that the cargo was incorrectly or inexpediently stowed,
    • costs incurred in connection with measures which were or could have been taken by the vessel’s crew or with a proper use of the vessel or its equipment,
    • the assured’s liability for late or non-performance of a transport obligation or agreement regarding the sale of the vessel,
    • costs of restoring the vessel to a seaworthy condition enabling it to receive the cargo.
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    Clause 21-25. Limitation of the insurer's liability for measures to avert or minimise loss

    Former Cl. 17-53. Basically, the liability insurer covers costs of measures to avert or minimise loss according to the rules in Cl. 4-7  et seq.  Provided that the conditions are met, the insurer will be fully liable regardless of the nature of the loss, damage or expenses in question. As regards...

  • Clause 21-26. The sum insured as a limit to the insurer’s liability

    The insurer covers, up to the sum insured, liability arising from any one casualty.

    Cl. 4-19 shall apply correspondingly.

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    Clause 21-26. The sum insured as a limit to the insurer's liability

    Former Cl. 17-54.  The limitation also applies if the injured party files the claim directly against the insurer. If the assured, according to current rules of law, is entitled to limit his liability to the injured party, the insurer is obviously also entitled to invoke this limitation vis-à-vis...

  • Clause 21-27. Deductible

    For any one casualty, the amount stated in the insurance contract shall be deducted.

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    Clause 21-27. Deductible

    Former Cl. 17-55.  In accordance with the other deductible provisions of the Plan, the actual amount of deductible has been removed from the provision.