The Plan
- Preface
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Part One: Rules common to all types of insurance
- Chapter 1: Introductory provisions
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Chapter 2: General rules relating to the scope of the insurance
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Section 1: Insurable interest and insurable value
- Clause 2-1. Insurance unrelated to any interest
- Clause 2-2. Insurable value
- Clause 2-3. Agreed insurable value
- Clause 2-4. Under-insurance
- Clause 2-5. Over-insurance
- Clause 2-6. Liability of the insurer when the interest is also insured with another insurer
- Clause 2-7. Recourse between the insurers where the interest is insured with two or more insurers
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Section 2: Perils insured against, causation and loss
- Clause 2-8. Perils covered by an insurance against marine perils
- Clause 2-9. Perils covered by an insurance against war perils
- Clause 2-10. Perils insured against when no agreement has been made as to what perils are covered by the insurance
- Clause 2-11. Causation. Incidence of loss
- Clause 2-12. Main rule relating to the burden of proof
- Clause 2-13. Combination of perils
- Clause 2-14. Combination of marine and war perils
- Clause 2-15. Losses deemed to be caused entirely by war perils
- Clause 2-16. Loss attributable either to marine or war perils
- Clause 2-17. Sanction limitation and exclusion
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Section 1: Insurable interest and insurable value
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Chapter 3: Duties of the person effecting the insurance and of the assured
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Section 1: Duty of disclosure of the person effecting the insurance
- Clause 3-1. Scope of the duty of disclosure
- Clause 3-2. Fraudulent misrepresentation
- Clause 3-3. Other failure to fulfil the duty of disclosure
- Clause 3-4. Innocent breach of the duty of disclosure
- Clause 3-5. Cases where the insurer may not invoke breach of the duty of disclosure
- Clause 3-6. Duty of the insurer to give notice
- Clause 3-7. Right of the insurer to obtain particulars from the vessel’s classification society, etc.
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Section 2: Alteration of the risk
- Clause 3-8. Alteration of the risk
- Clause 3-9. Alteration of the risk caused or agreed to by the assured
- Clause 3-10. Right of the insurer to cancel the insurance
- Clause 3-11. Duty of the assured to give notice
- Clause 3-12. Cases where the insurer may not invoke alteration of the risk
- Clause 3-13. Duty of the insurer to give notice
- Clause 3-14. Loss of the main class
- Clause 3-15. Trading areas
- Clause 3-16. Illegal undertakings
- Clause 3-17. Suspension of the insurance in the event of requisition
- Clause 3-18. Notification of requisition
- Clause 3-19. Suspension of insurance while the vessel is temporarily seized
- Clause 3-20. Removal of the vessel to a repair yard
- Clause 3-21. Change of ownership
- Section 3: Safety regulations
- Section 4: Measures to avert or minimise loss, etc.
- Section 5: Casualties caused intentionally or negligently by the assured
- Section 6. Identification
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Section 1: Duty of disclosure of the person effecting the insurance
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Chapter 4: Liability of the insurer
- Section 1: General rules relating to the liability of the insurer
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Section 2: Costs of measures to avert or minimise the loss, including salvage awards and general average
- Clause 4-7. Compensation of the costs of measures to avert or minimise loss
- Clause 4-8. General average
- Clause 4-9. General average apportionment where the interests belong to the same person
- Clause 4-10. Damage to and loss of the object insured
- Clause 4-11. Assumed general average
- Clause 4-12. Costs of particular measures taken to avert or minimise loss
- Section 3: Liability of the assured to third parties
- Section 4: The sum insured as the limit of the liability of the insurer
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Chapter 5: Settlement of claims
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Section 1: Claims adjustment, interest, payments on account, etc.
- Clause 5-1. Duty of the assured to provide particulars and documents
- Clause 5-2. Claims adjustment
- Clause 5-3. Rates of exchange
- Clause 5-4. Interest on the compensation
- Clause 5-5. Disputes concerning the adjustment of the claim
- Clause 5-6. Due date
- Clause 5-7. Duty of the insurer to make a payment on account
- Clause 5-8. Payment on account when there is a dispute as to which insurer is liable for the loss
- Section 2: Liability of the assured to third parties
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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
- Clause 5-14. Waiver of claim for damages
- Clause 5-15. Duty of the assured to assist the insurer with information and documents
- Clause 5-16. Duty of the assured to maintain and safeguard the claim
- Clause 5-17. Decisions concerning legal proceedings or appeals
- Clause 5-18. Salvage award which entails compensation for loss covered by the insurer
- Section 4: Right of the insurer to the object insured upon payment of a claim
- Section 5: Limitation, etc.
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Section 1: Claims adjustment, interest, payments on account, etc.
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Chapter 6: Premium
- Clause 6-1. Payment of premium
- Clause 6-2. Right of the insurer to cancel the insurance in case of non-payment of premium
- Clause 6-3. Premium in the event of total loss
- Clause 6-4. Additional premium when the insurance is extended
- Clause 6-5. Reduction of premium
- Clause 6-6. Reduction of premium when the vessel is laid up or in similar situations
- Clause 6-7. Claim for a reduction of premium
- Chapter 7: Co-insurance of mortgagees
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Chapter 8: Co-insurance of third parties
- Clause 8-1. Rights of third parties against the insurer
- Clause 8-2. Protection of third parties against subrogation claims from the insurer
- Clause 8-3. Application of the rules in Chapter 3 and Clause 5-1
- Clause 8-4. Amendments and cancellation of the insurance contract
- Clause 8-5. Handling of claims, claims adjustment, etc.
- Clause 8-6. Other insurance
- Clause 8-7. Independent co-insurance of mortgagees and named third parties
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Chapter 9: Relations between the claims leader and co-insurers
- Clause 9-1. Definitions
- Clause 9-2. The right of the claims leader to act on behalf of co-insurers
- Clause 9-3. Lay-up plan
- Clause 9-4. Notification of a casualty
- Clause 9-5. Salvage
- Clause 9-6. Removal and repairs
- Clause 9-7. Provision of security
- Clause 9-8. Disputes with third parties
- Clause 9-9. Claims adjustment
- Clause 9-10. Insolvency of a co-insurer
- Clause 9-11. Interest on the disbursements of the claims leader
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Part Two: Hull insurance
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Chapter 10: General rules relating to the scope of the hull insurance
- Clause 10-1. Objects insured
- Clause 10-2. Objects, etc. temporarily removed from the vessel
- Clause 10-3. Loss due to ordinary use
- Clause 10-4. Insurance "on full conditions"
- Clause 10-5. Insurance "against total loss only" (T.L.O.)
- Clause 10-6. Insurance "against total loss and general average contribution only"
- Clause 10-7. Insurance "against total loss, general average contribution and collision liability only"
- Clause 10-8. Insurance "on stranding terms"
- Clause 10-9. Duration of voyage insurance
- Clause 10-10. Extension of the insurance
- Clause 10-11. Liability of the insurer if the vessel is salvaged by the assured
- Clause 10-12. Reduction of liability in consequence of an interest insurance
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Chapter 11: Total loss
- Clause 11-1. Total loss
- Clause 11-2. Salvage attempts
- Clause 11-3. Condemnation
- Clause 11-4. Condemnation in the event of a combination of perils
- Clause 11-5. Request for condemnation
- Clause 11-6. Removal of the vessel
- Clause 11-7. Missing or abandoned vessel
- Clause 11-8. Extension of the insurance when the vessel is missing or abandoned
- Clause 11-9. Liability of the insurer during the period of clarification
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Chapter 12: Damage
- Clause 12-1. Main rule concerning liability of the insurer
- Clause 12-2. Compensation for unrepaired damage
- Clause 12-3. Inadequate maintenance, etc.
- Clause 12-4. Error in design, etc.
- Clause 12-5. Losses that are not recoverable
- Clause 12-6. Deferred repairs
- Clause 12-7. Temporary repairs
- Clause 12-8. Costs incurred in expediting repairs
- Clause 12-9. Repairs of a vessel that is condemnable
- Clause 12-10. Survey of damage
- Clause 12-11. Invitations to tender
- Clause 12-12. Choice of repair yard
- Clause 12-13. Removal of the vessel
- Clause 12-14. Apportionment of common expenses
- Clause 12-15. Ice damage deductions
- Clause 12-16. Machinery damage deductions
- Clause 12-17. Compensation without deductions
- Clause 12-18. Deductible
- Clause 12-19. Basis for calculation of deductions according to Clauses 12-15 to 12-18 and Clause 3-15
- Chapter 13: Liability of the assured arising from collision or striking
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Chapter 10: General rules relating to the scope of the hull insurance
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Part Three: Other insurances for ocean-going vessels
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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)
- Clause 14-2. Insurance against loss of long-term freight income (freight interest insurance)
- Clause 14-3. Common rules for separate insurances against total loss
- Clause 14-4. Limitations on the right to effect separate insurances against total loss
- Chapter 15: War risks insurance
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Chapter 16: Loss of hire insurance
- Clause 16-1. Main rules regarding the liability of the insurer
- Clause 16-2. Total loss
- Clause 16-3. Main rule for calculating compensation
- Clause 16-4. Calculation of the loss of time
- Clause 16-5. The daily amount
- Clause 16-6. Agreed daily amount
- Clause 16-7. Deductible period
- Clause 16-8. Survey of damage
- Clause 16-9. Choice of repair yard
- Clause 16-10. Removal to the repair yard, etc.
- Clause 16-11. Extra costs incurred in order to avert or minimise loss
- Clause 16-12. Simultaneous repairs
- Clause 16-13. Loss of time after completion of repairs
- Clause 16-14. Repairs carried out after expiry of the insurance period
- Clause 16-15. Liability of the insurer when the vessel is transferred to a new owner
- Clause 16-16. Relationship to other insurances and general average
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Chapter 14: Separate insurances against total loss
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Part Four: Other insurances
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Chapter 17: Insurance for fishing vessels
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Section 1: General provisions
- Clause 17-1. Scope of application
- Clause 17-2. Renewal of the insurance/Ref. Clause 1-5
- Clause 17-3. Trading areas for fishing vessels/Ref. Clause 3-15
- Clause 17-4. Classification and vessel inspection/Ref. Clause 3-14 and Clause 3-8
- Clause 17-5. Safety regulations/Ref. Clause 3-22 and Clause 3-25
- Clause 17-6. Savings to the assured
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Section 2: Hull insurance
- Clause 17-7. The relationship to Chapters 10-13
- Clause 17-7A. Fixed equipment temporarily removed from the vessel
- Clause 17-8. Change of the open or agreed insurable value/Ref. Clause 2-2 and Clause 2-3
- Clause 17-9. Damage to lifeboats, fishing, whaling and sealing tackle and catch/Ref. Clause 4-7 to Clause 4-12 and Clause 4-16
- Clause 17-10. Hull and freight-interest insurance/Ref. Clause 10-12
- Clause 17-11. Condemnation/Ref. Clause 11-3
- Clause 17-12. Damage to the hull of vessels which are not built of steel/Ref. Clause 12-1
- Clause 17-13. Limited cover of damage to machinery
- Clause 17-14. Costs incurred in saving time/Ref. Clause 12-7, Clause 12-8, Clause 12-11 and Clause 12-12
- Clause 17-15. Deductions/Ref. Clause 12-15, Clause 12-16 and Clause 12-18
- Clause 17-16. Collision liability for fishing vessels/Ref. Clause 13-1
- Clause 17-17. Collision liability/Ref. Clause 13-1
- Section 3: Hull insurance - extended cover
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Section 4: Catch and equipment insurance - standard cover
- Clause 17-19. Objects insured
- Clause 17-20. Insurable value
- Clause 17-21. Extraordinary handling costs
- Clause 17-22. Excluded perils/Ref. Clause 2-8
- Clause 17-23. Deck cargo
- Clause 17-24. Total loss
- Clause 17-25. Damage to or loss of catch
- Clause 17-26. Damage to other objects
- Clause 17-27. Survey of damage
- Clause 17-28. Deductible
- Section 5: Supplementary cover for nets and seines in the sea
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Section 6: Loss of hire for fishing vessels
- Clause 17-33. Relationship to Chapter 16
- Clause 17-34. Liability of the insurer/applies instead of Clause 16-1
- Clause 17-35. Total loss/applies instead of Clause 16-2
- Clause 17-36. Calculation of compensation for fishing vessels/Ref. Clause 16-3
- Clause 17-37. The daily amount for fishing vessels/applies instead of Clause 16-5
- Clause 17-38. Agreed daily amount for fishing vessels/applies instead of Clause 16-6
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Section 1: General provisions
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Chapter 18: Insurance of mobile offshore units (MOUs)
- Section 1: General rules relating to the scope of the insurance
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Section 2: Hull insurance
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Section 2-1: General rules relating to the scope of the H&M insurance
- Clause 18-2. Objects insured
- Clause 18-3. Objects temporarily removed or separated etc. from the MOU
- Clause 18-4. Loss due to ordinary use
- Clause 18-5. Extension of the insurance
- Clause 18-6. Liability of the insurer if the MOU is salvaged by the assured
- Clause 18-7. Reduction of liability in consequence of an interest insurance
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Section 2-2: Total loss
- Clause 18-8. Total loss
- Clause 18-9. Salvage attempts
- Clause 18-10. Condemnation
- Clause 18-11. Condemnation in the event of a combination of perils
- Clause 18-12. Request for condemnation
- Clause 18-13. Removal of the MOU
- Clause 18-14. Missing or abandoned MOU
- Clause 18-15. Extension of the insurance when the MOU is missing or abandoned
- Clause 18-16. Liability of the insurer during the period of clarification
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Section 2-3: Damage
- Clause 18-17. Main rule concerning liability of the insurer
- Clause 18-18. Compensation for unrepaired damage
- Clause 18-19. Inadequate maintenance, etc.
- Clause 18-20. Error in design, etc.
- Clause 18-21. Losses that are not recoverable
- Clause 18-22. Damage to the drill string
- Clause 18-23. Deferred repairs
- Clause 18-24. Temporary repairs
- Clause 18-25. Costs incurred in expediting repairs
- Clause 18-26. Repairs of a MOU that is condemnable
- Clause 18-27. Survey of damage
- Clause 18-28. Invitations to tender
- Clause 18-29. Choice of repair yard
- Clause 18-30. Removal for repairs
- Clause 18-31. Apportionment of common expenses
- Clause 18-32. Ice damage deductions
- Clause 18-33. Deductible
- Clause 18-34. Basis for calculation of deductions according to Clauses 18-32, 18-33 and 3-15
- Section 2-4: Liability of the assured arising from collision or striking
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Section 2-1: General rules relating to the scope of the H&M insurance
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Section 3: Separate insurances against total loss
- Clause 18-39. Insurance against total loss and excess collision liability (hull interest insurance)
- Clause 18-40. Insurance against loss of long-term freight income (freight interest insurance)
- Clause 18-41. Common rules for separate insurances against total loss
- Clause 18-42. Limitations on the right to insure separately against total loss
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Section 4: Loss of hire insurance
- Clause 18-43. Main rules regarding the liability of the insurer
- Clause 18-44. Total loss
- Clause 18-45. Main rule for calculating compensation
- Clause 18-46. Calculation of the loss of time
- Clause 18-47. The daily amount
- Clause 18-48. Agreed daily amount
- Clause 18-49. Deductible period
- Clause 18-50. Survey of damage
- Clause 18-51. Choice of repairer
- Clause 18-52. Move to the repair location, etc.
- Clause 18-53. Extra costs incurred in order to avert or minimise loss
- Clause 18-54. Simultaneous works
- Clause 18-55. Loss of time after completion of repairs
- Clause 18-56. Repairs carried out after expiry of the insurance period
- Clause 18-57. Liability of the insurer when the MOU is transferred to a new owner
- Clause 18-58. Relationship to other insurances and general average
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Section 5: War risks insurance
- Section 5-1: General rules relating to the scope of war risks insurance
- Section 5-2: Termination of the insurance
- Section 5-3: Areas of operation
- Section 5-4: Total loss
- Section 5-5: Damage
- Section 5-6: Loss of hire
- Section 5-7: Owner’s liability, etc. (P&I)
- Section 5-8: Occupational injury insurance, etc.
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Section 6: Construction risks insurance
- Section 6-1: General rules relating to the scope of construction risks insurance
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Section 6-2: Loss of or damage to the MOU
- Clause 18-87. Objects insured/Ref. Clause 18-2
- Clause 18-88. Insurable value
- Clause 18-89. Compensation in the event of a total loss/Ref. Clause 4-1
- Clause 18-90. Total Loss/Ref. Section 2-2
- Clause 18-91. Damage/Ref. Section 2-3
- Clause 18-92. Error in design, etc.
- Clause 18-93. Costs incurred in order to save time/Ref. Clauses 18-24, 18-28 and 18-29
- Section 6-3: Supplementary covers
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Chapter 19: Builders’ risks insurance
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Section 1: Common provisions
- Clause 19-1. Perils covered/Ref. Clause 2-8 cf. Clause 2-10
- Clause 19-2. Insurance period/Ref. Clause 1-5
- Clause 19-2A. Premium in the event of total loss
- Clause 19-3. Co-insurance/Ref. Clause 8-1
- Clause 19-4. Transfer of the building contract/Ref. Clause 3-21
- Clause 19-5. Place of insurance
- Clause 19-6. The sum insured as the limit of the liability of the insurer/Ref. Clause 4-18 and Clause 4-19
- Clause 19-7. Escalation of the sum insured
- Clause 19-8. Deductible
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Section 2: Loss of or damage to the subject-matter insured
- Clause 19-9. Objects insured/Ref. Clause 10-1
- Clause 19-10. Insurable value
- Clause 19-11. Total loss in the event of condemnation
- Clause 19-12. Total loss where the yard's obligation to deliver no longer applies
- Clause 19-13. Compensation in the event of a total loss/ Ref. Clause 4-1
- Clause 19-14. Damage/Ref. Chapter 12
- Clause 19-15. Limitation of the insurer’s liability/Ref. Clause 12-1
- Clause 19-16. Compensation for unrepaired damage/ Ref. Clause 12-2
- Clause 19-17. Costs incurred in order to save time/ Ref. Clause 12-7, Clause 12-11 and Clause 12-12
- Section 3: Indemnification of additional costs incurred in an unsuccessful launching and costs of wreck removal
- Section 4: Liability insurance
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Section 5: Supplementary covers
- Clause 19-22. Applicable rules
- Clause 19-23. Insurance of additional costs in connection with rebuilding and/or building of a new subject-matter insured
- Clause 19-24. Insurance of the yard’s liability for the buyer’s interest claim for instalments paid
- Clause 19-25. Insurance of the yard’s loss of interest in the event of late delivery
- Clause 19-26. Insurance of the yard’s daily penalties in the event of late delivery
- Clause 19-27. Towage and removal of the subject-matter insured
- Section 6: Supplementary cover for war risks
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Section 1: Common provisions
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Chapter 20: Insurance for vessels with trading certificates
- Section 1: General provisions
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Section 2: Hull insurance
- Clause 20-6. The relationship to Chapters 10-13
- Clause 20-7. Hull and freight-interest insurance/ Ref. Clause 10-12
- Clause 20-8. Condemnation/Ref. Clause 11-3
- Clause 20-9. Damage to the hull of vessels which are not built of steel/Ref. Clause 12-1
- Clause 20-10. Limited cover of damage to machinery
- Clause 20-11. Costs incurred in saving time/ Ref. Clause 12-7, Clause 12-8, Clause 12-11 and Clause 12-12
- Clause 20-12. Deductions/Ref. Clause 12-15, Clause 12-16 and Clause 12-18
- Clause 20-13. Collision liability/Ref. Clause 13-1
- Section 3: Hull insurance - extended cover
- Section 4: Hull insurance - limited cover
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Chapter 21 Liability insurance
- Clause 21-1. Scope of application
- Clause 21-2. Renewal of the insurance/Ref. Clause 1-5
- Clause 21-3. Classification and vessel inspection/ Ref. Clause 3-14 and Clause 3-8
- Clause 21-4. Savings to the assured
- Clause 21-5. Perils covered
- Clause 21-6. Liability for personal injury
- Clause 21-7. Liability for property damage
- Clause 21-8. Liability for description
- Clause 21-9. Liability for the misdelivery of goods
- Clause 21-10. General average contributions
- Clause 21-11. Liability for the removal of wrecks
- Clause 21-12. Liability for special salvage compensation
- Clause 21-13. Liability for bunker oil pollution damage and damage to the environment
- Clause 21-14. Stowaways
- Clause 21-15. Liability for fines, etc.
- Clause 21-16. Liability for social benefits for the crew
- Clause 21-17. Travel expenses for replacement crew
- Clause 21-18. Expenses for disinfection and quarantine
- Clause 21-19. Limitation due to other insurance, etc.
- Clause 21-20. Safety regulations/Ref. Clause 3-22 and Clause 3-25
- Clause 21-21. Assured’s fault
- Clause 21-22. The insurer’s rights in the event of liability
- Clause 21-23. Liability for loss that occurred during other transport, etc.
- Clause 21-24. Limitation of liability for fishing vessels
- Clause 21-25. Limitation of the insurer’s liability for measures to avert or minimise loss
- Clause 21-26. The sum insured as a limit to the insurer’s liability
- Clause 21-27. Deductible
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Chapter 17: Insurance for fishing vessels
- Appendix
Chapter 16: Loss of hire insurance
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Clause 16-1. Main rules regarding the liability of the insurer
View Commentary Go to full Commentary pageThe insurance covers the assured’s loss of income due to the vessel being wholly or partially deprived of income-earning activity as a consequence of damage to the vessel which is recoverable under the conditions of the Plan, or which would have been recoverable if no deductible had been agreed, see Cl. 12-18. If the hull insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules in Chapters 10 - 12 of the Plan shall be replaced by the corresponding conditions of the insurance concerned when assessing whether the damage is recoverable.
The insurance also covers the assured’s loss of income due to the vessel being wholly or partially deprived of income-earning activity:
- because the vessel has stranded,
- because the vessel is prevented by physical obstruction (other than ice) from leaving a port or a similar limited area, or
- as a consequence of measures taken to salvage or remove damaged cargo, or
- as a consequence of an event that is allowed in general average pursuant to the 2016 York-Antwerp Rules.
The insurer’s liability resulting from any one casualty, and from all casualties occurring during the insurance period, shall be limited to the sum insured per day multiplied by the number(s) of days insured respectively as stated in the insurance contract.
Following a casualty, the insurance contract shall be automatically reinstated back to the original limits of liability. The premium payable for such reinstatement shall be 100 % of the agreed premium pertaining to the vessel involved calculated pro rata on the amount reinstated irrespective of time of the remaining period of insurance.
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Clause 16-2. Total loss
View Commentary Go to full Commentary pageThe insurer shall not be liable for loss of income resulting from a casualty which entitles the assured to compensation for total loss under the hull insurance in effect. If no hull insurance is in effect the assessment shall be based on Chapter 11 of the Plan.
Clause 16-2. Total loss
This provision was amended in the 2023 Version. The first sentence is amended from “The insurer shall not be liable for loss of time resulting from a casualty which gives the assured the right to compensation for total loss under Chapter 11 of the Plan or under the corresponding hull insurance in...
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Clause 16-3. Main rule for calculating compensation
View Commentary Go to full Commentary pageCompensation shall be determined on the basis of the time during which the vessel has been deprived of income-earning activity (loss of time) and the loss of income per day (the daily amount). Loss of time that occurred prior to the events described in Cl. 16-1 shall not be recoverable.
Clause 16-3. Main rule for calculating compensation
The provision was amended in 2023. Part of the previous Commentary has been moved to Cl. 16-1. The f irst sentence states the main rule for calculating compensation, and provides that compensation is to be determined on the basis of the time during which the vessel has been deprived of...
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Clause 16-4. Calculation of the loss of time
View Commentary Go to full Commentary pageLoss of time shall be stipulated in days, hours and minutes. A period of time during which the assured has only partially been deprived of income shall be converted into a corresponding period of total loss of income.
Clause 16-4. Calculation of the loss of time
The Clause was editorially amended in the 2019 Version by moving sub-clause 2 to Cl. 16-1, sub-clause 3, cf. the Commentary to this Clause. The second sentence in the Clause was amended in 2023. The Commentary has been extended by including part of the text that was removed during the 2003...
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Clause 16-5. The daily amount
View Commentary Go to full Commentary pageThe daily amount shall be determined on the basis of the amount of freight per day under the current contract of affreightment less such expenses as the assured saves or ought to have saved due to the vessel being out of regular employment.
If the vessel is unchartered, the daily amount shall be calculated on the basis of average freight rates for vessels of the type and size concerned during the period in which the vessel is deprived of income.
Clause 16-5. The daily amount
Sub-clause 1 was amended in 2023. The provision lays down rules for calculating the daily amount under open policies. As mentioned in the Commentary to Cl. 16-3, the “daily amount” is the insurable value of the assured’s loss of income per day. In practice, the daily amount is almost invariably...
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Clause 16-6. Agreed daily amount
View Commentary Go to full Commentary pageThe daily sum insured stated in the insurance contract, cf. Cl. 16-1, sub-clause 3, shall be deemed to constitute an agreed daily amount (insurable value) unless the circumstances clearly indicate otherwise.
Clause 16-6. Agreed daily amount
The Clause was amended in 2023. The Commentary was amended accordingly, including a more detailed elaboration regarding the agreed daily amount. The provision regulates the agreed daily amount and states that “The daily sum insured stated in the insurance contract, cf. Cl. 16-1, sub-clause 3, sha...
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Clause 16-7. Deductible period
View Commentary Go to full Commentary pageEach casualty shall be subject to a deductible period which shall run from the commencement of the loss of time and last until the time lost is equivalent to the deductible period stated in the insurance contract, calculated in accordance with the rule in Cl. 16-4. Loss of time in the deductible period is not recoverable.
Damage caused by heavy weather or navigating in ice which has occurred during the period between departure from one port and arrival at the next one shall be regarded as one casualty.
If a separate deductible period for damage to machinery has been agreed, Cl. 12-16 shall apply correspondingly.
Clause 16-7. Deductible period
The Clause was amended in the 2023 Version. The Commentary was amended accordingly and also extended with comments relevant for the interpretation of the Clause. Sub-clause 1, first sentence , was rewritten by amending “loss of time” to “time lost” and reorganizing the reference to Cl. 16-4. Thes...
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Clause 16-8. Survey of damage
View Commentary Go to full Commentary pageThe provisions of Cl. 12-10 shall apply correspondingly.
Clause 16-8. Survey of damage
The provision refers to the rules for survey of damage in Cl. 12-10 of the Plan. The reference also applies even if the hull insurance has been effected on conditions other than those of the Plan with the written consent of the insurer. Consequently, any survey rules in the differing standard...
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Clause 16-9. Choice of repair yard
View Commentary Go to full Commentary pageThe insurer may demand that tenders for repairs be obtained from repair yards of the insurer’s choice. If the assured does not obtain such tenders the insurer may do so.
For the purpose of comparison, the repair time for tenders received, converted into monetary expense using the applicable daily amount, shall be adjusted by adding any:
- estimated additional recoverable time under Cl. 16-10 and/or Cl. 16-13 after conversion as above.
- repair costs not recoverable under the hull insurance solely due to the repair alternative being more expensive than the cheapest alternative.
The assured shall decide which yard shall be used. However, the liability of the insurer shall be limited to the lowest adjusted tender. If the assured chooses this repair yard, the claim shall be settled on the basis of the actual time lost, even if this is greater than that specified in the tender.If the assured, because of special circumstances, has justifiable reason to object to the repairs being carried out by one of the repair yards that has submitted a tender, the assured may demand that the tender from that yard be disregarded.
Clause 16-9. Choice of repair yard
This Clause was amended in the 2023 Version. Sub-clause 1 was only editorially amended with no material changes, and is now identical to Cl. 12-11, sub-clause 1. Sub-clause 2 was new, and describes how tenders shall be adjusted for the purpose of comparison. Sub-clause 3 was amended by providing ...
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Clause 16-10. Removal to the repair yard, etc.
View Commentary Go to full Commentary pageLoss of time during removal to the repair yard shall be attributed to the category of repairs that necessitated the removal.
If removal to the repair yard was necessary for more than one category of repairs, the removal time shall be apportioned in accordance with the time that each category of work would have required if carried out separately. Removal time that falls within the deductible period shall not be apportioned.
The rules of sub-clauses 1 and 2 shall also apply to loss of time during surveys, while obtaining tenders, during tank cleaning, while waiting to commence repairs or due to other similar measures that were necessary in order to carry out the repairs.
Clause 16-10. Removal to the repair yard, etc.
The wording of this Clause was amended in the 2013 Plan. The terms “class of repairs” and “class of work” has been replaced with “category of repairs” and “category of work” in order to make the Plan´s use of terms consistent. The Commentary was amended in 2023 as a consequence of the amendment...
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Clause 16-11. Extra costs incurred in order to avert or minimise loss
View Commentary Go to full Commentary pageThe insurer shall be liable for extra costs incurred in connection with temporary repairs and in connection with extraordinary measures taken in order to avert or minimise loss covered by the insurance, insofar as such extra costs are not recoverable under the hull insurance in effect. Chapter 4, Section 2, shall not apply.
The liability for such costs is limited to the amount the insurer would have had to pay if the measures had not been taken.
If loss is averted or minimised for the benefit of several interests, the insurer is only liable for such proportion of the extra costs attributed to the interest insured.
Clause 16-11. Extra costs incurred in order to avert or minimise loss
The Commentary was amended in the 2019 Version. In 2023, the provision, including the heading, were amended with a substantial amendment and restructuring of the Commentary. The heading was amended from “Extra costs incurred in order to save time” to “Extra costs incurred in order to avert or...
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Clause 16-12. Simultaneous repairs
View Commentary Go to full Commentary pageIf repair work resulting from a casualty covered under this loss of hire insurance is carried out simultaneously with:
- repair work resulting from any other casualty covered under this or another loss of hire insurance, and/or
- work which is not covered under any loss of hire insurance, but which is:
- carried out to fulfil classification requirements, or
- necessary to enable the vessel to meet technical and operational safety requirements or perform its contractual obligations, or
- related to the reconstruction of the vessel,
the common time which falls outside the deductible period shall be apportioned as follows:
- Where common time falls outside the deductible period for all casualties, and no work referred to in sub-clause 1, item 2, is effected simultaneously, the common time shall be apportioned equally between all casualties.
- Where common time falls outside the deductible period for all casualties, but the repair work is effected simultaneously with work referred to in sub-clause 1, item 2, half of such common time shall be apportioned equally between the casualties.
- Where common time falls within the deductible period for one or more casualties, but outside the deductible period for other casualties, half of such common time shall be apportioned equally between the casualties where the deductible period has expired, whether or not work referred to in sub-clause 1, item 2, has been effected simultaneously.
When applying the rules set out in sub-clause 1, each category of work shall be deemed to have lasted for the number of days the work would have required if each category of work had been carried out separately, reckoned from the time the work started. Unless the circumstances clearly indicate another point in time, all categories of work shall be deemed to have started on the vessel’s arrival at the yard. Any delay which might occur due to several categories of work being carried out simultaneously shall be attributed to all categories in proportion to the number of days each category would have required if carried out separately, reckoned from the time the work started. However, the insurer’s liability shall not exceed the amount that would have been payable if the category of work for which the insurer is liable had been carried out separately.Clause 16-12. Simultaneous repairs
The wording of the provision was substantially amended in the 2023 Version, and previous sub-clauses 1 to 3 are replaced by a new sub-clause 1. Sub-clause 2 corresponds with previous sub-clause 4, and has only a minor amendment necessitated by re-arranging the previous sub-clauses 1 - 3 into the...
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Clause 16-13. Loss of time after completion of repairs
View Commentary Go to full Commentary pageThe insurer is not liable for loss of time after completion of repairs, except for loss of time:
- until the vessel can resume employment under the contract that was in force at the time of the casualty,
- until the vessel employed in liner trade that follows a fixed route or operates in a defined geographical area can resume its activity,
- while the vessel sails to the first port of loading under a contract that was entered into with binding effect prior to the casualty,
- until passenger vessels can resume their activity, limited to fourteen days.
Cl. 16-10 shall apply correspondingly to loss of time after completion of repairs.Clause 16-13. Loss of time after completion of repairs
Sub-clause 1 (b) was amended in the 2013 Plan. Further amendments were made in 2023 to the provision and the Commentary. Sub-clause 1, first sentence is amended from “After repairs have been completed, the insurer shall only be liable for loss of time:” to “ The insurer is not liable for loss of...
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Clause 16-14. Repairs carried out after expiry of the insurance period
View Commentary Go to full Commentary pageLoss of time that commences after expiry of the insurance period shall be recoverable in accordance with the rules of Cl. 16-5, even if the daily amount is an agreed amount pursuant to Cl. 16-6, if this results in lower compensation.
The insurer shall not be liable for loss of time that commences more than two years after expiry of the insurance period.
Clause 16-14. Repairs carried out after expiry of the insurance period
This provision was amended in 2023. The previous sub-clause 1 became sub-clause 2 and vice versa. In the previous versions both sub-clauses referred to “loss of time resulting from a stay at a repair yard that commences”. This was amended by deleting the reference to the repair yard, now simply...
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Clause 16-15. Liability of the insurer when the vessel is transferred to a new owner
View Commentary Go to full Commentary pageWhere a transfer of ownership has been postponed as a consequence of a damage or an event recoverable under Cl. 16-1, the insurer shall be liable for the assured’s loss of interest on the sales amount based on the interest rate in Cl. 5-4, sub-clause 3, as well as for wages and maintenance of the crew, even though the vessel would not have earned income during the postponement. However, the insurer shall not be liable for time that would in any event have been lost in connection with transfer of ownership.
The insurer’s liability pursuant to sub-clause 1 shall not exceed the compensation calculated on the basis of the sum insured per day and the time by which the transfer was postponed less the agreed deductible period. The deductible period is calculated in consecutive days even if the loss of interest differs from the sum insured per day. No compensation may be claimed for loss of time after completion of repairs, except for loss of time during removal after repairs. If the removal results in time savings for the assured a corresponding time shall be deducted.
The assured’s claim against the insurer may not be transferred to a new owner.
Clause 16-15. Liability of the insurer when the vessel is transferred to a new owner
This Clause and its Commentary was amended in the 2023 Version. Sub-clause 1 was amended from reading: “When damage to the vessel is repaired in connection with a transfer of ownership, the insurer shall not be liable for time that would in any event have been lost in connection with the said...
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Clause 16-16. Relationship to other insurances and general average
View Commentary Go to full Commentary pageThe rules as to subrogation in Cl. 5-13 of the Plan shall apply correspondingly to:
- the assured's right to claim compensation for loss of time and operating costs during removal to a repair yard under Cl. 12-11 or Cl. 12-13 of the Plan, or equivalent provisions in other conditions applicable to the vessel's hull insurance, and
- any right the assured might otherwise have to claim compensation for the loss from another insurer or in general average.
Clause 16-16. Relationship to other insurances and general average
This provision has not been amended. However, amendments were made on points of substance in the Commentary in the 2010 Version. The Commentary was further amended in 2023. It follows directly from Cl. 5-13 that the loss of hire insurer is subrogated to the assured’s claim against any third party...
Clause 16-1. Main rules regarding the liability of the insurer
This provision was amended in the 2003 Version. The Commentary was amended in 2013 and in 2019. In 2023, the provision was amended and the Commentary was substantially amended and restructured. Sub-clause 1 contains the basic conditions for cover under loss of hire insurance. The first sentence...