2010 Norwegian Marine Insurance Plan published - International Law Office

Introduction
General terms
Hull insurance
War risks insurance
Loss of hire insurance
Insurance of fishing vessels and small freighters
Builder's risk insurance


Introduction

The Norwegian Marine Insurance Plan is a comprehensive set of insurance conditions developed by insurers, shipowners and average adjusters. The plan is supplemented by an extensive commentary. The plan and the commentary are regularly revised by the Standing Revision Committee. This update provides a review of the most significant changes to be found in the 2010 version.

The new version amends both the general terms, which apply to all types of insurance cover, and the special provisions applicable to specific types of cover. Changes have also been made to the commentary, reflecting the amended provisions and clarifying passages of the 2007 version that the committee found to be impractical, misleading or difficult to understand.

General terms

One of the changes in the general terms is the replacement of the term 'Norwegian average adjuster' with 'Nordic average adjuster' in Clauses 2-3, 5-5(1) and 12-10(4). The amendment reflects the fact that the plan is increasingly used by Nordic shipowners and insurers.

In the general rules relating to the cost of measures to avert or minimise loss (including salvage awards and general average), the insurer's liability has been extended in Clause 4-8 to cover salvage awards that are not recovered in general average, except for interest which is payable after the due date pursuant to the plan if such interest is recoverable as part of the general average adjustment.

Hull insurance

Under the hull insurance cover, an addition has been made in Clause 12-2(2) which regulates compensation for unrepaired damage, excluding the estimated common expenses from cover, other than 50% of estimated dock and quay hire.

The hull collision liability cover in Chapter 13(1) no longer covers liability for damage to coral reefs and other environmental damage. Such damage is traditionally covered by protection and indemnity insurance.

War risks insurance

The scope of cover under war risks insurance has been amended; this also affects the risks excluded from marine risks cover.(2) Clause 2-9 has been amplified by adding the term 'civil war' to subparagraph (a) and by adding to subparagraph (c) that loss due to other social, religious or politically motivated use of violence (or threats thereof) is to be treated as a war peril. The commentary to subparagraph (d) concerning piracy and mutiny now defines when an attack on a ship is to be regarded as an act of piracy and covered as a war peril.

In Clause 15-20 the scope of war risks cover in relation to the owner's liability has been expanded so that the hull insurer now also covers perils included in the range of war perils of the protection and indemnity insurance as further defined in Appendix IV of the Pooling Agreement of the International Group of Protection and Indemnity Clubs. Where no protection and indemnity insurance against marine perils has been taken out with one of the associations that is party to the agreement, the insurer's liability is to be determined by reference to Assuranceforeningen Gard's rules, rather than Skuld's rules, which was the case under the 2007 version.

An addition to Clause 15-22 clarifies that the cover provided by standard protection and indemnity insurance is secondary to the cover against war perils provided by Chapter 15.

Loss of hire insurance

Under the loss of hire insurance rules, the insurer's liability for time lost in connection with repairs where a ship is transferred to a new owner is, pursuant to Clause 16-15, limited to the sum insured per day and the period for which transfer of ownership was postponed, or the time estimated for repairs by the buyer with a deduction for the agreed deductible period. In the 2010 version an addition to Clause 16-15(2) results in the deductible period being calculated in consecutive days, even if the loss of interest differs from the sum insured per day.

Insurance of fishing vessels and small freighters

With respect to liability insurance for fishing vessels and small freighters, Clause 17-39 regarding wreck removal liability has been amended so that the insurer's liability also covers the owner's liability for disposal and destruction. Moreover, a new provision has been added to Clause 17-41 whereby the insurer bears liability on the part of the owner for bunker oil pollution damage occurring in accordance with the provisions laid down in national legislation based on the provisions of the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001.

New rules regulating loss of hire for fishing vessels have also been included in Chapter 17, Section 7. The general provision for loss of hire set out in Chapter 16 of the plan will apply to loss of hire insurance for fishing vessels with the changes prescribed in Clauses 17-57 to 17-61.

Builder's risk insurance

With respect to the coverage of the insured's liability under the builder's risk insurance, a third paragraph has been added to Clause 19-20 whereby the insurer undertakes to cover the insured's liability for bunker oil pollution damage under the provisions of national legislation that are based on the provisions of the convention.

For further information please contact Gaute K Gjelsten, Anders Færden or Kjetil Jansen at Wikborg Rein by telephone (+47 22 82 75 00), fax (+47 22 82 75 01) or email (ggj@wr.no, awf@wr.no or kjj@wrco.co.uk).

Endnotes

(1) Clause 13-1(2)(f).

(2) Clause 2-8(a).