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Section 1: General rules relating to the liability of the insurer

  • Clause 4-1. Total loss

    In the event of a total loss, the assured may claim payment of the sum insured, but not in excess of the insurable value.

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    Clause 4-1. Total loss

    This Clause is identical to Cl. 62 of the 1964 Plan. The provision establishes the traditional principle in insurance law that the assured, in the event of a total loss, is entitled to claim the sum insured, however, not in excess of the insurable value. In the event of a total loss, the insurer’...

  • Clause 4-2. General financial loss and loss resulting from delay

    Unless otherwise provided in this Plan or specially agreed, the insurer is not liable for general financial loss, or for loss of time, loss due to unfavourable trade conditions, loss of markets and similar losses resulting from delays.

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    Clause 4-2. General financial loss and loss resulting from delay

    This Clause is identical to Cl. 63 of the1964 Plan. The question concerning the interest insured will normally be regulated under the individual type of insurance. However, it should also be addressed in the general part of the Plan for pedagogical reasons. The provision reflects the fact that th...

  • Clause 4-3. Costs of providing security, etc.

    If the assured, as a result of a casualty, has had to raise funds or provide security, it may claim a refund from the insurer for reasonable expenses so incurred. However, this shall not apply if the assured has, without good reason, failed to exercise its right to demand a payment on account from the insurer under Cl. 5-7.

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    Clause 4-3. Costs of providing security, etc.

    Under Cl. 5-12, the insurer is not obliged to provide security for claims brought by a third party against the assured, which are covered by the insurance. However, if the assured incurs expenses in order to obtain such security, these must, according to the first sentence, be recoverable as...

  • Clause 4-4. Costs of litigation

    If a claim is made against the assured in respect of liability covered by the insurance, or if the assured makes a claim against a third party for damages in connection with a loss covered by the insurance, the insurer shall be liable for the costs incurred, provided that the steps taken are approved by the insurer or must be considered justifiable.

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    Clause 4-4. Costs of litigation

    There may be doubt as to who shall bear the litigation costs in the event of a dispute between the assured and the insurer as to whether a case against a third party shall be taken to court. In such situations, several insurers with conflicting interests will normally be interested in the questio...

  • Clause 4-5. Costs in connection with a claim

    Upon the occurrence of a casualty that might give rise to a claim under the insurance, the insurer shall also pay the necessary costs of establishing whether any recoverable loss has occurred and the extent of the loss.

    If the assured has reasonable grounds for employing its own surveyor, the insurer is liable for necessary costs in this connection.

    The insurer shall also pay the costs of handling the claim and calculating the compensation.

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    Clause 4-5. Costs in connection with a claim

    This Clause was amended in the 2019 Version. Sub-clause 1 covers all costs incurred after the casualty which are necessary in order to establish whether any recoverable loss has occurred and, if so, its extent, or which are necessary in order to secure any recourse against third parties. Thus the...

  • Clause 4-6. Costs in connection with measures relating to several interests

    If costs mentioned in Cl. 4-3 to Cl. 4-5 have been incurred in connection with measures relating to several interests, the insurer is only liable for that proportion of the costs which may reasonably be attributed to the interest insured.

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    Clause 4-6. Costs in connection with measures relating to several interests

    This Clause is identical to Cl. 67 of the 1964 Plan. The provision confirms the principle of apportionment when costs are incurred in connection with measures relating to several interests. The principle of pro rata apportionment is of great practical significance for litigation costs and costs i...