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Section 3: Claims by the assured for damages against third parties

  • Clause 5-13. Right of subrogation of the insurer to claims by the assured for damages against third parties

    If the assured has a claim against a third party for compensation of a loss, the insurer is, upon payment of compensation to the assured for the loss, subrogated to the rights of the assured against the third party concerned. The rule in Cl. 4-14 shall apply correspondingly.

    If the insurer is only partly liable for the loss, the claim for damages shall be divided proportionately between the insurer and the assured. The same applies if compensation for the full loss would be a higher amount if paid by a third party than by the insurer, but the third party is only liable for part of the loss, or the entire amount of loss is not recoverable.

    If the insurer's claim produces a higher net amount than it has paid to the assured with the addition of interest, the excess amount shall accrue to the assured.

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    Clause 5-13. Right of subrogation of the insurer to claims by the assured for damages against third parties

    Sub-clause 1 establishes the insurer’s right to be subrogated to the assured’s claims against third parties. When the assured has a claim for damages against a third party on account of a loss, either wholly or in part, e.g., as a general average contribution or as compensation for collision...

  • Clause 5-14. Waiver of claim for damages

    The insurer's liability shall be reduced by an amount equal to that which it is prevented from collecting because the assured has waived its right to claim damages from a third party, unless the waiver may be considered customary in the trade in question, or was given in accordance with directions issued by the insurer on the basis of Cl. 3-28.

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    Clause 5-14. Waiver of claim for damages

    The Clause regulates the effect of the assured’s waiver of his right to claim damages from a third party. It is primarily applicable in connection with damages in a contractual relationship where the assured has waived in advance his right to claim damages from the other party to the contract. As...

  • Clause 5-15. Duty of the assured to assist the insurer with information and documents

    The assured shall, when requested, provide the insurer with any information and documents available to it which are of relevance for the pursuit of the insurer's claim.

    The insurer also has the right to familiarise itself with all documents and other evidence before it takes over the claim.

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    Clause 5-15. Duty of the assured to assist the insurer with information and documents

    As regards the interpretation of sub-clause 1, reference is made to what is stated in Cl. 5-1, sub-clause 1. Cl. 98, sub-clause 2, second sentence, of the 1964 Plan, contained a provision to the effect that, in the event of litigation between the assured and a third party, the insurer would be...

  • Clause 5-16. Duty of the assured to maintain and safeguard the claim

    The assured shall take the necessary steps to maintain and secure the claim until the insurer is able to protect its own interests. If necessary, the assured shall avail itself of expert technical and legal assistance.

    If the assured, intentionally or through gross negligence, fails to fulfil its duties under the preceding sub-clause, it is liable for the loss incurred by the insurer due to such failure.

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    Clause 5-16. Duty of the assured to maintain and safeguard the claim

    The Commentary was amended in the 2019 Version. Under sub-clause 1 , the assured shall secure a claim against third parties on behalf of the insurer. The provision is particularly relevant where the owner has the right to claim general average contributions from the cargo. The owner has the right...

  • Clause 5-17. Decisions concerning legal proceedings or appeals

    If there is a disagreement between the insurer and the assured concerning the institution of legal proceedings or the lodging of appeals concerning claims for damages against third parties, Cl. 5-11 shall apply correspondingly.

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    Clause 5-17. Decisions concerning legal proceedings or appeals

    When the assured has a claim for damages against a third party, the latter will very often have a counterclaim against the assured. Such counterclaims must often be covered by the P&I insurer, whereas the claims for damages will usually accrue to the hull insurer. Accordingly, in such situations,...

  • Clause 5-18. Salvage award which entails compensation for loss covered by the insurer

    If the assured has sustained a loss in connection with a salvage operation and receives a salvage award or a proportion of such an award, it shall, out of the amount thus received, reimburse the insurer the amount that the latter has paid as compensation for the loss.

    Cl. 5-13 to Cl. 5-17 shall apply correspondingly.

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    Clause 5-18. Salvage award which entails compensation for loss covered by the insurer

    Under Section 446 (f) of the Norwegian Maritime Code, the material loss sustained by the salvor in connection with the salvage operation shall be taken into account when the salvage award is determined. Under Section 451, first sub-clause, of the same Code, any damage to the vessel or cargo cause...