Insurance conditions and reporting requirements

1. Insurance conditions and reporting requirements Surveyors day, 24th October 2013. Sveinung Måkestad and Alf Inge Johannessen

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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…

13. § 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)

14. § 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…”

15. 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.

16. Survey reports - templates • It’s easy to find what is required… • www.gard.no

17. 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.