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Insurance conditions and reporting requirements. Surveyors day, 24 th October 2013. Sveinung Måkestad and Alf Inge Johannessen. All Risks vs. Named Perils. Conditions based on All Risks: Nordic Plan. German conditions. Conditions based on Named Perils: US conditions. UK conditions.

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Insurance conditions and reporting requirements

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Insurance conditions and reporting requirements

Surveyors day, 24th October 2013.

Sveinung Måkestad and Alf Inge Johannessen


All Risks vs. Named Perils.

  • Conditions based on All Risks:

    • Nordic Plan.

    • German conditions.

  • Conditions based on Named Perils:

    • US conditions.

    • UK conditions.

    • Dutch conditions.


All Risks – Main principles

  • The Assured to show that vessel has suffered damage and to prove extent of loss.

  • The insurer to show if damage is caused by peril not covered by the conditions.


Named Perils – main principles.

  • The Assured to show that vessel has suffered damage, to identify cause which should be within the perils covered and to prove extent of loss.


Nordic Marine Insurance Plan 2013

  • Based on the Norwegian Marine Insurance Plan of 1996, Version 2010

  • Supported by the Commentary:

    • clarifies many issues of interpretation and practice, reducing the probability of disputes

  • Designed to support the Nordic claims handling model:

    • entails active support and cooperation of the insurer when dealing with claims

  • No major changes compared with the Norwegian Plan.


  • Nordic Plan – Survey of damage

    § 12-10 – Survey of damage:

    • Before repairs, damage shall be surveyed by representatives of the assured and the insurer.

    • Normally Owners’ Superintendent and Surveyor nominated by the insurer.

    • Both shall submit reports.

    • If any disagreement, an umpire may be appointed.

    • If survey not held, the assured has the burden of proving that damage is not attributable to causes not covered by the insurance.


    German conditions - Survey

    • ADS Cl. 74.

      • Any partial loss shall be ascertained by experts.

      • Both Underwriters and the Assured shall appoint an expert each.

      • In the event of the experts disagreeing they shall appoint an umpire.

      • Underwriters may refuse payment until the claim has been ascertained in accordance with ADS Cl. 74.


    German conditions – crew hours.

    • The assured is entitled to a compensation if his crew has taken part in damage repairs.

    • Based on an hourly rate.

    • The Surveyor is expected to be able to confirm the number of hours worked.


    ITCH/AIHC/Dutch Hull Form - Survey

    • In event of an accident which may result in a claim, notice shall be given to Underwriters prior to Survey so that Underwriters may appoint a surveyor to represent them.


    Reporting requirements…:

    • Delivery time!!

      • We as insurers are «always» pressed in respect of the assured’s cash flow…

      • Delay in reporting is (too?) often a problem for us – and our member/clients.


    Discovered damage, or progressive damages - be aware!

    • Problem: When did damage occur – and which policy period to pay?

    • Different solutions depending on insurance conditions.

    • Investigate possible/likely date of occurrence (e.g. any log entries?)

      • Damage occurred prior to or after policy inception?

      • E.g. when was the vessel last known to be free of damage?

    • Discuss with Underwriters’ claims department, and be prepared for questions in this respect.

    • Allocation of claim to one policy only, or apportionment over more than one policy periods, to be decided by the adjuster based on your advices.


    Nordic Plan – Loss of Hire

    • § 16-12 – Simultaneous repairs

      If repairs covered under this insurance are carried out simultaneously with work which is not covered under this insurance, but which:

      • Is carried out to fulfil classification requirements, or

      • Is necessary to enable the ship to meet technical or operational safety requirements or perform its contractual obligations, or

      • Is related to reconstruction of the ship,

        the insurer shall pay compensation for half of the time common to both categories of repair in excess of the deductible period.

  • Time required for work as described above if carried out separately should be specified by the Surveyor.

  • And time required for all owners’ work…


  • § 16-12 – continued

    • Which works should be included?

      • “…carried out to fulfil classification requirements…”

        • Whether or not due at the time.

        • it is a condition that the classification society has issued the requirement in writing

        • repairs which the classification society has recommended or advised making, without actually imposing a requirement, do not fall within the scope of letter (a)


    § 16-12 – continued

    • “…is necessary to enable the ship to meet…”

      • “…technical and operational safety requirements…” = Seaworthiness.

      • “…perform its contractual obligations…” Includes “cargoworthiness” as well as specific requirements that may be stipulated in freight contracts.

    • “…is related to the reconstruction of the ship…”


    Other reporting requirements

    • Always include a list detailing ship’s movements with dates and times.

      • Incl. removal voyage (if any) to port of repairs

      • Please make it clear if times are local or GMT.

    • Tenders taken?

    • The Surveyor should always be aware which other repair works / maintenance works are carried out simultaneously with damage repairs and include relevant information in his report.


    Survey reports - templates

    • It’s easy to find what is required…

    • www.gard.no


    Survey reports - format

    • Survey Reports to be delivered in electronic version.

    • Avoid emailing extremely large documents.

      • Reduce size if possible, or discuss with Claims Handler.

    • Gard utilizes TEMPOBOX for sharing large documents.

    • DROPBOX or similar is unsafe.


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