Insurance Wordings and Clauses

Download Cargo Owner’s Liability Cover (2015) (PDF)

In accordance with Rule 19(22) the Member shall be indemnified by the Association in respect of the following liabilities, losses, costs and expenses incurred by him in his capacity as owner, shipper, buyer, seller, or holder of the bill(s) of lading in respect of cargo (the “Member’s Cargo”), whilst carried on a Ship whether or not entered in the Association, or whilst being loaded on or being discharged from such a Ship:

Damage to Hull

(1) liabilities of the Member for damage to or loss of the Ship, or expenses relating thereto, arising from:

(a) physical loss of or damage to the Ship, her equipment, fittings, stores and supplies excluding any property owned or leased by the Member;

(b) delay, detention or loss of use of the Ship resulting from physical loss of or damage to the Ship.

Damage to Property

(2) Physical loss of or damage to or infringement of rights in connection with the property of others.

Wreck Removal

(3) The raising, removal, destruction, lighting or marking of the wreck of a Ship or any cargo (whether or not the Member’s cargo) which is or was on board the Ship and which are compulsory by law.

Provided always that:

(A) the value of any Member’s Cargo saved shall either be credited to the Association or deducted from any recovery due from the Association; and

(B) there shall be no recovery if the Member shall, without the consent of the Managers in writing, transfer his interest in the wreck, cargo or other property (otherwise than by abandonment) prior to the said raising, removal, destruction, lighting or marking.

Disposal Expenses

(4) Extraordinary costs or expenses incurred in discharging or disposing of the Member’s Cargo which is damaged or worthless provided that the Member is liable for such costs and is not entitled to recover them from any other party.

Provided always that the value of any cargo retained by the Member or any such sums recovered by or due to the Member in respect of the sale of such cargo shall either be credited to the Association or deducted from any recovery due from the Association.

Personal Injury

(5) Subject to provisos (D) and (E) below, death, personal injury or illness of any person.

Pollution

(6) Liabilities, costs and expenses incurred as a result of any escape or discharge or threatened escape or discharge of the Member’s Cargo in respect of:

(a) Damages

Liability for damages or compensation payable to any person arising from or in respect of pollution;

(b) Clean-up

The costs of any measures (not being measures taken in the ordinary course of business) reasonably taken for the purpose of preventing, minimising or cleaning up any pollution together with any liability for losses or damages arising from any measure so taken;

(c) Government Order

The costs or liabilities incurred by the Member as a result of compliance with any order or direction given by any Government or authority for the purpose of preventing or reducing pollution or the risk of pollution;

(d) Fines

Liability which a Member may incur for fines in respect of pollution.

Provided always that unless the Directors in their sole discretion otherwise agree there shall be no recovery in respect of any liability, loss, damage, cost or expense including, without limitation, liability for the cost of any remedial works or clean-up operations, arising as a result of the presence in, or the escape or discharge or threat of escape or discharge from any land-based dump, site, storage or disposal facility, of the Member’s cargo, whether as cargo, fuel, stores or waste and whether at any time mixed in whole or in part with any other substance whatsoever.

Provided always that unless and to the extent that the Directors in their sole discretion otherwise decide there shall be no recovery under this Cargo Owners’ Liability Cover in respect of:

(A) Any amounts which would be recoverable under Institute Cargo Clauses (A) (whether or not such insurance is in place in respect of the Members’ cargo) or which would have been recoverable had there been no franchise or deductible applicable to such policy.

(B) Any loss of or damage to property owned, leased or rented by the Member (other than the Member’s Cargo and as set out above).

(C) Penalties, punitive damages, exemplary damages, multiple damages or other fines resulting from the multiplication of compensatory damages.

(D) Any liability arising directly or indirectly under workmen’s compensation legislation or Employers Liability Acts or any other statutory or common law liability in respect of death, personal injury or illness of any workman or other person employed in any capacity whatsoever by the Member, his agents or sub-contractors in any capacity whatsoever by the Member, his agents or sub-contractors when such death, personal injury or illness arises out of or in the course of the employment of such workman or other person.

(E) Death, personal injury or illness and/or property damage directly or indirectly caused by or arising out of:

(a) asbestos, tobacco, coal dust, polychlorinated biphenyls, silica, benzene, talc, dioxin, pesticides or herbicides, electromagnetic fields, pharmaceutical or medical drugs/products/substances/devices or any substance containing such material or any derivative thereof; or

(b) any inherent characteristic or vice of the Member’s Cargo.

(F) Liabilities, losses, costs and expenses arising out of the use of or consumption of the Member’s Cargo or reliance upon a warranty or representation made in respect thereof caused by or arising out of or in connection with the production, processing or manufacture of the Members’ Cargo.

(G) Freight, hire, demurrage or detention or any proportion thereof relating to or in connection with the carriage of Member’s Cargo unless forming part of a claim for liabilities in respect of the Member’s Cargo which is otherwise covered under these terms.

(H) Loss through price or currency fluctuations, loss of market or similar losses howsoever caused.

(I) Liabilities, losses, costs and expenses relating to risks set out in paragraphs (1)-(6) above which would not have arisen but for the terms of a contract, indemnity or guarantee made by or on behalf of a Member relating to the Member’s Cargo or its carriage unless that contract, indemnity or guarantee has been approved by the Managers in writing and the Member has paid, or agreed to pay, such additional premium as may be required by the Association and (unless the Managers have otherwise agreed in writing) that the provisions of any other applicable Rule have been satisfied, or the Directors in their absolute discretion decide that the Member should be reimbursed.

(J) Liabilities, losses, costs and expenses which exceed the amount to which the Member may limit his liability under any applicable law, statute or convention.

Cesser of All Insurances

Unless the Directors shall otherwise determine, the Member shall cease to be insured by the Association in respect of any and all ships entered by him or on his behalf in the Association or any and all liabilities in respect of any Member’s Cargo n the event that the Association in any way howsoever becomes exposed to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state or international organisation as a consequence of the employment of the Entered Ship or which arises out of the Member’s Cargo.

The Member shall in no circumstances be entitled to recover from the Association that part of any liabilities, costs and expenses which is not recovered by the Association from parties to the International Group Pool and/or under any reinsurance(s) because of shortfall in recovery from the parties or reinsurers thereunder by reason of any sanction, prohibition or adverse action against them by a state or international organisation or the risk thereof if payment were to be made by such parties or reinsurers. For the purposes of this clause, “shortfall” includes any failure or delay in recovery by the Association by reason of the parties or reinsurers making payment in to a designated account in compliance with the requirements of any state or international organisation.

Subject always to the Limit of Liability contained in the Cargo Owners Limit of Liability Clause and the Deductible set out in the Certificate of Entry. The Limit of Liability shall apply to the aggregate of all claims arising out of any one event.

The Cargo Owner’s Liability Cover provided by the Association is reinsured by the Association. In accordance with Rule 8 Proviso B of the Association’s Rules the Member shall be entitled to recover from the funds of the Association only the net amount actually recovered under this reinsurance, together with that portion (if any) of the risk or risks retained by the Association.

Download Communicable Disease Exclusion Clause (PDF)

1.  In the event that the World Health Organization (‘WHO’) has determined an outbreak of a Communicable Disease to be a Public Health Emergency of International Concern (a ‘Declared Communicable Disease’), no coverage will be provided under this (re)insurance for any loss, damage, liability, cost or expense directly arising from any transmission or alleged transmission of the Declared Communicable Disease.

2. The exclusion in paragraph 1 of this endorsement will not apply to any liability of the (re)insured otherwise covered by this (re)insurance where the liability directly arises from an identified instance of a transmission of a Declared Communicable Disease and where the (re)insured proves that identified instance of a transmission took place before the date of determination by the WHO of the Declared Communicable Disease.

3. However even if the requirements of paragraph 2 of this endorsement are met, no coverage will be provided under this (re)insurance for any:

A. liability, cost or expense to identify, clean up, detoxify, remove, monitor, or test for the Declared Communicable Disease whether the measures are preventative or remedial;

B. liability for or loss, cost or expense arising out of any loss of revenue, loss of hire, business interruption, loss of market, delay or any indirect financial loss, howsoever described, as a result of the Declared Communicable Disease;

C. loss, damage, liability, cost or expense caused by or arising out of fear of or the threat of the Declared Communicable Disease.

4. As used in this endorsement, Communicable Disease means any disease, known or unknown, which can be transmitted by means of any substance or agent from any organism to another organism where:

A. the substance or agent includes but is not limited to a virus, bacterium, parasite or other organism or any variation or mutation of any of the foregoing, whether deemed living or not, and

B. the method of transmission, whether direct or indirect, includes but is not limited to human touch or contact, airborne transmission, bodily fluid transmission, transmission to or from or via any solid object or surface or liquid or gas, and

C. the disease, substance or agent may, acting alone or in conjunction with other co-morbidities, conditions, genetic susceptibilities, or with the human immune system, cause death, illness or bodily harm or temporarily or permanently impair human physical or mental health or adversely affect the value of or safe use of property of any kind.

5. This endorsement shall not extend this (re)insurance to cover any liability which would not have been covered under this (re)insurance had this endorsement not been attached.

All other terms, conditions and limitations of this (re)insurance remain the same.

JL 2021-014

Download Contraband Loss of Hire (PDF)

It is noted and agreed that this entry shall include the cover provided by this Contraband Loss of Hire Insurance, subject otherwise to the War Risks Rules of the Association and the Insured Owner’s terms of entry.

1. The cover provided by this Clause is on a worldwide basis and is subject to the terms and conditions set out below.

In this Clause the words “Association”, “Certificate of Entry”, “Entered Ship”, “Insured Owner”, “Policy Year” and “Rules” shall bear the meanings set out in the Definitions in the Association’s Rules.

In this Clause “Contraband” shall mean any object, including drugs, which is unlawful to import, export, produce or possess, “this Insurance” shall mean the insurance as set out in this clause and “Period of Entry” shall be the period for which the Association has provided cover for this Contraband Loss of Hire insurance but shall not extend beyond the end of that Policy Year.  The “Association” shall also mean each Association forming the Combined Group of War Risks Associations.

2. If, in consequence of the discovery of, or the suspicion of, the presence on board the Entered Ship of Contraband but excluding illegal or unlicensed military, security and paramilitary goods, equipment, arms, ammunition and related material belonging to, or in the possession of, armed security engaged by the Insured Owner or charterer, the Entered Ship is delayed during the Period of Entry covered by this Insurance by reason of seizure, arrest, restraint, detainment or confiscation, or any attempt thereat, by any Government, public or local authority, or port or customs authority, this Insurance will pay, subject to the following terms, the amounts set out below in respect of any delay caused by such an event or occurrence.

3. The daily sum recoverable under this clause shall be fixed and agreed by the Association and set out in the Certificate of Entry whether the Entered Ship is on charter or not.

4. The Insurance provided by this clause shall cover a maximum of 90 days delay, or such other period as the Association agrees, resulting from any one event or occurrence or in the aggregate from all events or occurrences within any one Policy Year in excess of 2 consecutive periods of 24 hours in respect of any one event or occurrence.

Cover may be reinstated upon terms to be agreed by the Association.

or where required:-

The Insurance provided by this clause shall cover a maximum of 180 days delay, or such other period as the Association agrees, resulting from any one event or occurrence or in the aggregate from all events or occurrences within any one Policy Year in excess of 24 hours in respect of any one event or occurrence.

Cover may be reinstated upon terms to be agreed by the Association.

5. Where an Insured Owner is entitled to recover a daily sum by reason of events or occurrences set out in paragraph 2 above, he shall, in addition, be entitled to recover any costs or expenses which are directly caused by such events or occurrences up to an amount equivalent to the maximum limit of cover provided in respect of delay. Such expenses to include but not be limited to the costs of transhipment, crewing (including repatriation and substitution expenses), bunkers, demurrage, warehousing, substitute chartering, cargo liabilities, legal expenses, port expenses and the cost of providing security (such as a letter of credit charges) to obtain the release of the Entered Ship but excluding:-

• any fines, penalties or other impositions,
• any sum paid in consideration of or the release of the Entered Ship, and
• any cost or expense that is recoverable from any other insurance or would be recoverable in circumstances set out in the Association’s Rule 4.E.9, Double Insurance.

6. Where the Entered Ship is under time charter the daily sum recoverable shall not become payable until the time and date of the period for which charter hire ceases to be paid by the Entered Ship’s time charterers

7. The Association will be entitled to any charter hire in respect of the period for which a claim has been paid by the Association under this Clause which is received by the Insured Owner after payment of the claim by the Association.

8. If an Insured Owner is entitled to claim charter hire from any time charterer for the period in respect of which the claim is made, the Association shall be entitled to exercise rights of subrogation in respect of such hire and the Insured Owner shall assign its rights thereto to the Association.

9. There shall be no recovery under this clause if the Insured Owner, or any of the Insured Owner’s managers, superintendents or shore management knew of, or is successfully prosecuted as being knowingly involved in, the carriage of Contraband which led to the seizure, arrest, restraint, detainment or confiscation referred to in paragraph 2 above. In the event that a claim under this clause has been paid prior to the establishment of such knowledge or prior to the successful prosecution, the amount paid by the Association will be repayable by the Insured Owner.

10. It is warranted that where the Entered Ship is newly acquired, bareboat chartered or redelivered, the Insured Owner will search the ship for Contraband immediately on acquisition, delivery or redelivery.

11. It is warranted that the Insured Owner shall take all reasonable steps to prevent the Entered Ship or its cargo being used for the purpose of carrying Contraband.

12. It is warranted that for the entire Period of Entry the Insured Owner is signatory either to the Sea Carrier Initiative Agreement or the Customs-Trade Partnership Against Terrorism Agreement and/or their precursors or successors with the United States of America’s customs authorities if and / or when trading to the United States of America unless the Association agrees otherwise.

13. The provisions within the Association’s Rule 4.E.5 Seizure by a Country where the Entered Ship is Owned, Registered or Managed, Rule 4.E.4 Fines, Penalties etc and Rule 4.E.7 Ordinary Judicial Process, shall not apply to this Contraband Loss of Hire Insurance.

14. Coverage under this Clause is subject to the Association’s Rules, unless expressly stated otherwise to the contrary in this Clause, including but not limited to, the submission by the parties to the jurisdiction of the English High Court of Justice in respect of any dispute or differences between the Insured Owner and the Association in accordance with Rule 46.

15. There shall be no recovery under this Clause if the event in respect of which a claim would otherwise arise also results in the Entered Ship becoming an actual or constructive total loss from risks insured under the War Risks Rules of the Association. In the event that a claim has been paid under this clause prior to the Entered Ship becoming an actual or constructive total loss, there shall be deducted from any claim in respect of the actual or constructive total loss a sum equivalent to any claim paid under this clause.

MM Clause No. 3064

20^th February 2022

Download Marine Cyber Endorsement (PDF)

1. Subject only to paragraph 3 below, in no case shall this insurance cover loss, damage, liability or expense directly or indirectly caused by or contributed to by or arising from the use or operation, as a means for inflicting harm, of any computer, computer system, computer software programme, malicious code, computer virus, computer process or any other electronic system.

2. Subject to the conditions, limitations and exclusions of the policy to which this clause attaches, the indemnity otherwise recoverable hereunder shall not be prejudiced by the use or operation of any computer, computer system, computer software programme, computer process or any other electronic system, if such use or operation is not as a means for inflicting

3. Where this clause is endorsed on policies covering risks of war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power, or terrorism or any person acting from a political motive, paragraph 1 shall not operate to exclude losses (which would otherwise be covered) arising from the use of any computer, computer system or computer software programme or any other electronic system in the launch and/or guidance system and/or firing mechanism of any weapon or

LMA5403

11 November 2019

Download War Loss of Hire (PDF)

It is noted and agreed that this entry shall include the cover provided by this War Risks Loss of Hire Insurance, subject otherwise to the War Risks Rules of the Association and the Insured Owner’s terms of entry.

1. The insurance provided by this War Risks Loss of Hire Insurance is subject to the terms and conditions set out below.

The words “Association”, “Certificate of Entry”, “Entered Ship”, “Insured Owner”, “Policy Year” and “Rules” shall bear the meanings set out in the Definitions in the Association’s Rules.

“Period of Entry” shall be the period for which the Association has provided cover for this War Risks Loss of Hire Insurance but shall not extend beyond the end of that Policy Year.

The “Association” shall also mean each Association forming the Combined Group of War Risks Associations.

2. If in consequence of loss, damage, detention or occurrence or any attempt thereat to the Entered Ship from risks insured under the War Risks Rules of the Association including the risks of violent theft by persons from outside the Entered Ship, piracy or barratry of Master, Officers or Crew or from any terrorist or any person acting maliciously, or from a political motive, the Entered Ship be wholly or partly deprived or prevented from earning hire or reward for a period in excess of 7 consecutive periods of 24 hours in respect of any one event or occurrence provided that:-

(i) such loss, damage, detention or occurrence to the Entered Ship occurs during the period of entry of the ship in the Association; and

(ii) repairs if actually carried out in respect of damage are completed within 12 months of the end of that Period of Entry.

3. In such circumstances the Insured Owner shall be indemnified by the Association for each 24 hour period or part thereof during which the Entered Ship is so deprived or prevented from hire, not exceeding a period of 180 days in respect of any one event or occurrence or in the aggregate from all events or occurrences within any one Policy Year.

4. Cover may be reinstated upon terms to be agreed by the Association.

5. The Insured Owner shall effect, or cause to be effected, all repairs (temporary or permanent) with due diligence and dispatch. The Association shall have the right to require the Insured Owner to incur any expense which would reduce the Association’s liability under this War Risks Loss of Hire Insurance, provided such expense is for the Association’s account.

6. The daily sum recoverable under this War Risks Loss of Hire Insurance shall be fixed and agreed by the Association and set out in the Certificate of Entry whether the Entered Ship is on charter or not.

7. Any claim for losses, liabilities, costs or expenses arising from piracy, barratry of Master, Officers or Crew, or violent theft by persons from outside the Entered Ship shall not be subject to a deductible.

8. Where the Entered Ship is under time charter the daily sum recoverable shall not become payable until the time and date of the period for which charter hire ceases to be paid by the Entered Ship’s time charterers.

9. The Association will be entitled to any charter hire in respect of the period for which a claim has been paid by the Association under this War Risks Loss of Hire Insurance which is received by the Insured Owner after payment of the claim by the Association.

10. If an Insured Owner is entitled to claim charter hire from any time charterer for the period in respect of which the claim is made, the Association shall be entitled to exercise rights of subrogation in respect of such hire and the Insured Owner shall assign its rights thereto to the Association.

11. There shall be no recovery under this War Risks Loss of Hire Insurance if the event in respect of which a claim would otherwise arise also results in the Entered Ship becoming an actual or constructive total loss from risks insured under the War Risks Rules of the Association. In the event that a claim has been paid under this clause prior to the Entered Ship becoming an actual or constructive total loss, there shall be deducted from any claim in respect of the actual or constructive total loss a sum equivalent to any claim paid under this War Risks Loss of Hire Insurance.

12. Cover under this War Risks Loss of Hire Insurance is subject to the Association’s Rules, unless expressly stated otherwise to the contrary, including but not limited to, the submission by the parties to the English High Court of Justice in respect of any dispute or differences between the Insured Owner and the Association in accordance with the Association’s Rule 46.

MM Clause No. 3065

20 February 2022

The clauses set out in the Recommended Clauses publication cover a wide range of cover related and commercial issues. View our Recommended Clauses here.