MARINE INSURANCE HISTORY & APPLICATIONS
MARINE INSURANCE IS SAID TO HAVE HAD ITS BIRTH IN CHINA IN
ANCIENT DAYS, WHEN PIRATES WERE NUMEROUS ON ALL RIVERS AND CHINA SEAS, MANY
SHIPPERS GROUPED TOGETHER AND THEIR JUNKS STARTED THE VOYAGE AS A FLEET.
WHEN WE TALK ABOUT
MARINE INSURANCE; THE FIRST NAME WHICH COMES TO MIND IS LLOYD’S.
IN THE 1680’S ,EDWARD LLOYD OPENED A COFFEE HOUSE IN LONDON
AND IT BECAME A MEETING PLACE FOR SHIP’S MASTERS,OWNERS AND THE CITY MERÇINTS
WHOSE BUSINESS WAS ARRANGING SUITABLE POLICIES FOR THE INSURANCE OF SHIPS AND
THEIR CARGOES.
THESE MERCHANTS WHO GUARANTEED COMMERCIAL VENTURES FOR AN
AGREED SUM OF MONEY (PREMIUM), SIGNED THEIR NAMES UNDERNEATH THE WORDING OF
POLICIES AND HENCE WERE KNOWN AS UNDERWRITERS.
THIS LLOYD’S COFFEE HOUSE SOON BECAME WIDELY RECOGNISED BY
SHIPOWNERS AS THE PLACE WERE UNDERWRITERS COULD BE FOUND TO PROVIDE INSURANCE WHICH THESE
UNDERWRITERS BECAME KNOWN AS LLOYD’S UNDERWRITERS.
THIS INSURANCE MONOPOLY RESULTED IN SHIPOWNERS HAVING TO PAY
WHAT THEY CONSIDERED TO BE EXCESSIVELY HIGH INSURANCE PREMIUMS.
ALTHOUGH ACTING ILLEGALLY, GROUPS OF SHIPOWNERS FORMED A
NUMBER OF ASSOCIATIONS.
THE PURPOSE OF THESE
ASSOCIATIONS WAS TO PROVIDE MUTUAL INSURANCE FOR THEIR MEMBERS TO COVER
THE RISK OF DAMAGE OR LOSS OF THIER SHIPS FROM THE PERILS OF THE SEA OR FIRE
FOR HULL RISKS.
EACH MEMBER OF THESE ASSOCIATIONS ENTERED HIS VESSELS AT AN AGREED PREMIUM FOR A 12 MONTH PERIOD
AND ALL LOSSES AND EXPENSES WHICH OCCURRED IN THAT PERIOD WERE DIVIDED EQUALLY
AMONGST ALL MEMBERS.
THESE ASSOCIATIONS WERE KNOWN AS MUTUAL HULL UNDERWRITING
ASSOCIATIONS OR HULL CLUBS.
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THESE HULL CLUBS ALSO PROVINDING COVER AGAINST THE DAMAGE TO
OTHER VESSELS IN THE EVENT OF A COLLISION WHICH WAS COMMON PRACTICE EVEN BEFORE
LLOYD’S UNDERWRITERS AGREED TO COVER THREE FOURTS OF SUCH LIABILITIES.
UNTIL 1824 , LLOYD’S , THE LONDON ASSURANCE AND THE ROYAL
EXCHANGE INSURANCE WERE ONLY ALLOWED BY
LAW TO CONDUCT MARINE INSURANCE BUSINESS IN THE UNITED KINGDOM.
AFTER SIXTY YEARS ,THERE WAS A GREAT EXPANSION IN THE NUMBER
OF INSURANCE AND SHIPPING COMPANIES.
THESE FOLLOWED TO DEVELOP THEIR OWN CLAUSES.
IN 1883 ,U.K UNDERWRITING COMMUNITY WAS HELD AT LLOYD’S TO
CONSIDER THE DETAILS AND PHRASEOLOGY OF CERTAIN CLAUSES USUALLY INSERTED IN
POLICIES OF MARINE INSURANCE WITH A VIEW
TO THE GENERAL ADOPTION OF AN ESTABLISHED WORDING OF THESE CLAUSES.
IN 1884 THE INSTITUTE OF LONDON UNDERWRITERS WAS FORMED AND THEY RECOMMENDED THE GENERAL ADOPTION OF
THREE CLAUSES FOR STEAMERS BUT THE FIRST FULL SET OF INSTITUTE TIME CLAUSES WAS
ISSUED IN 1888.
IT STANDS TO REASON THAT CHANGING THE TRADE AND OTHER
CIRCUMSTANCES , BROUGHT TOGETHER THE NEW
VERSIONS OF HULL INSURANCE WERE
INTRODUCED IN 1952 ,1959,1969,1970,1983,1995,2002 AND 2003.
THERE ARE VARIETY OF MARINE INSURANCE SUCH AS ; CARGO
INSURANCE, HULL & MACHINERY INSURANCE, PROTECTION & INDEMNITY COVER,
CHARTERER’S LIABILITY, SHIP REPAIRER’S LEGAL LIABILITY, BUILDERS ‘RISK COVER
AND CONTINGENCY COVER MEANS KIDNAP AND RANSOM.
IT WOULD TAKE YEARS OF STUDY TO BECOME A SPECIALIST IN
MARINE INSURANCE.
OVER THE LAST HUNDRED YEARS, THE INSTITUTE TIME CLAUSES HAVE
BECOME AN INTERNATIONAL STANDART FOR PERIOD INSURANCE ON VESSELS AND REFLECTED
IN THE NEW TITLE OF INTERNATIONAL HULL CLAUSES WHICH HAS BEEN PROVIDING THE
COVER REQUIRED BY COMMERCIAL INTEREST AND THE GREATEST POSSIBLE DEGREE OF
CERTAINTY IN THE APPROACH TO HULL CLAIMS.
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NOT ONLY THE OWNERS
NEED HULL & MACHINERY COVER FOR THEIR VESSELS BUT ALSO THEY NEED THE PROTECTION AND INDEMNITY
COVER FOR THE CARGO WHICH UNDER THEIR RESPONSIBILITY DURING VOYAGE AND
RESPONSIBILITIES TOWARDS TO THIRD PARTY.
SUCH AS OWNER’S RISK , HOWEVER,WERE NOT RESTRICTED TO THE LOSS OF
THE VESSEL.
THEY HAD ALWAYS BEEN
LIABLE AT COMMON LAW FOR LOSS OR DAMAGE TO OTHER VESSEL AND THEIR CARGO AS
ARESULT OF COLLISION, FOR LOSS OR DAMAGE TO CARGO CARRIED ON THEIR VESSELS, AND
FOR LOSS OF LIFE AND PERSONAL INJURY, BUT UNTIL THE MIDDLE OF 19TH CENTURY IT
WOULD APPEAR THAT THERE WERE RELATIVELY FEW SUCCESSFULL LEGAL ACTIONS AGAINT
SHIPOWNERS AND CONSEQUENTLY, INSURANCE OF THESE LIABILITIES WAS NOT OF MAJOR
CONCERN. HOWEVER , DEVELOPMENTS IN THE LAW BROUGHT ABOUT CHANGES.
AN ACT IN 1846 , FOR EXAMPLE ,GAVE DEPENDENTS THE RIGHT TO
SUE OWNERS FOR DAMAGES RESULTING FROM DEATH CAUSED BY NEGLIGENCE, WHEREAS
PREVIOULSY THE RIGHT TO CLAIM DIED WITH THE VICTIM.
WITH THE INCREASE IN PASSANGER TRADE, OWNERS BECOME ALARMED
AT THE POSSIBILITY OF HAVING TO PAY OUT VERY LARGE SUMS OF MONEY TO SETTLE LOSS
OF LIFE AND PERSONAL INJURY CLAIMS.
THEY PRESSED THE GOVERMENT TO LIMIT THESE LIABILITIES AND IN
1854 A
MERCIHANT SHIPPING ACT WAS PASSED WHICH LIMITED THEIR LIABILITY IN THIS AREA AS
WELL AS FOR PROPERTY DAMAGE.
THE NEXT DEVELOPMENT CAME SHORTLY MR PETER TINDALL FOR RILEY AND CO WHO WAS HULL
CLUB MANAGER STEPPED IN TO PROVIDE OWNERS WITH MUTUAL INSURANCE PROTECTION
AGAINT THESE LIABILITIES.
THEY FORMED THE FIRST PROTECTING SOCIETY CALLED “THE
SHIPOWNERS MUTUAL PROTECTION SOCIETY” WHICH COMMENCED OPERATIONS ON 1ST OF MAY
1855. OTHER PROTECTING ASOCIATIONS QUICKLY FOLLOWED.
FOR THE HELP OF BOTH H&M AND PROTECTION AND INDEMNITY
COVERS, THE SHIP OWNERS TRADE AND SAIL THEIR VESSELS MORE COMFORTABLE.
BUT THE NEAR DEVELOPMENTS , UNFORTUNATLY BRING MORE OBLIGATIONS
TO SHIPOWNERS DUE TO PIRACY ON THE GULF OF ADEN .
IN ANY COMMERCIAL VOYAGE ,THERE ARE NORMALLY FOUR PRINCIPAL
INTEREST AT RISK,THE VESSEL, THE CREW, THE CARGO AND THE FREIGHT TO BE EARNED
ON THE VOYAGE.
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IN CASE OF HIJACKING OF A VESSEL BY PIRATES, ALL FOUR OF
THESE PRINCIPAL INTEREST COME INTO PLAY.
PRIOR TO TRANSITING THE GULF OF ADEN OR NEAR TO THESE AREA,
A SHIPOWNER NEEDS NOT ONLY TO HAVE PURCHASED TRADITIONAL MARINE INSURANCE, BUT
ALSO ADDITIONAL COVERAGE SUCH AS;( H&M), HULL WAR RISK, INCLUDING LOSS OF
HIRE, PROTECTION AND INDEMNITY AND INSURANCE POLICY AGAINST KIDNAP AND RANSOM..
H&M POLICY: INDEMNIFIES AS INSURED, SHIPOWNER,VESSEL
OPERATOR OR OTHER PARTY WITH AN INSURABLE INTEREST IN THE VESSEL AGAINST
PHYSICAL LOSSES OR DAMAGE TO THE VESSEL OR ITS MACHINERY.
SAME H&M POLICIES EXCLUDES PIRACY (DUE TO NEW
REGULATIONS) BUT WAR & STRIKES POLICY THEN MUST COVER IT.
AS WITH H&M TO RECOVER FOR ANY LOSS UNDER A WAR RISK
POLICY, THE INSURED MUST DEMONSTRATE THAT ONE OF THE ENUMERATED PERILS
PROXIMATELY CAUSED THE CLAIMED LOSS.
LOSS OF HIRE CAN BE ADDED THE ABOVE COVERS AS YEARLY BASIS
OR CAN BE ADDED TO K&R POLICY AS VOYAGE BASIS.
APPLICABLE P&I CLUB RULES; GENERALLY PROVIDE INSURANCE
IN RESPECT OF THE INSURED’S LIABILITIES TO CREW MEMBERS AND OTHER THIRD PARTIES.
K&R POLICIES PROVIDE THAT THE INSURER WILL REIMBURSE AN INSURED WHO PAYS RANSOM TO THIRD
PARTIES TO PROCURE THE RELEASE OF A VESSEL OR CREW TAKEN HOSTAGE.
THIS POLICIES
PROVIDES ALSO MAJOR EXPENSES SUCH
AS THE COST OF PROFESSIONAL HOSTAGE NEGOTIATORS,TRAVEL COSTS, FEES FOR MEDICAL
OR PSYCHIATRIC CARE OF CREW MEMBERS,THE COSTS OF DELIVERY OF THE RANSOM, PORT
CHARGES ETC.
K&R POLICY IS A POLICY OF INDEMNITY PAY TO BE PAID
POLICY WITH RESPECT OF RANSOMS.
THE OTHER IMPORTANT SUBJECT IS GENERAL AVERAGE WHICH IS AN
ANCIENT MARTIME LAW CONCEPT WHEREBY VESSEL ANDF CARGO ARE CONSIDERED TO BE, IN
ESSENCE JOINT VENTURERS IN EACH VOYAGE.
IN THIS MANNER THE PRO RATA SHARING IS BASED ON THE RELATIVE
VALUE OF VESSEL AND CARGO AT THE END OF THE VOYAGE.
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ARMED PIRATES ON BOARD OF A VESSEL CERTAINLY POSE A PERIL TO THE VESSEL
AND CARGO.
RANSOM PAYMENTS DO NOT CONSTITUTE EXPENDITURE REASONABLY
CONTEMPLATED IN THE FULFILMENT OF THE INTENDED VOYAGE.
A RANSON PAYMENT IS VOLUNTARY INCURRED AS THERE IS NO LEGAL DUTY TO PAY RANSOM.
THE PAYMENT ALLOWS FOR THE RELEASE OF VESSEL AND CARGO, IN
ADDITIONAL TO THE CREW SO THAT THE VOYAGE MAY BE FULFILLED IN COMMON INTEREST
OF BOTH VESSEL AND THE CARGO.
THE PREPONDERANCE OF JURISPRUDENTAIL COMMENTARY SUPPORTS THE
PRECEPT THAT THE PAYMENT OF A RANSOM PROPERLY FORMS THE SUBJECT MATTER OF
GENERAL AVERAGE.
HOWEVER GENERAL AVERAGE APPLIES TO PIRACY IS FAIRLY LIMITED.
WHERE CARGO GIVEN TO PIRATES BY WAY OF RANSOM WAS TREATED AS
A GENERAL AVERAGE SACRIFICE.
THE RATIONALE UNDER ENGLISH LAW FOR SUCH PRACTICE IS
PREMISED ON THE IDEA THAT ANY REASONABLE PAYMENT MADE TO HIJACKERS TO SECURE
THE RELEASE OF THE SHIP AND CARGO , RESRESENTS A GENERAL AVERAGE SACRIFICE IN
THE COMMON INTEREST BOTH.
RULE A OF THE YORK ANTWERP RULES IS A DEFINITION OF GENERAL
AVERAGE AND READS AS FOLLOWS;
“THERE IS AGENERAL AVERAGE ACT WHEN AND ONLY WHEN ANY EXTRA ORDINARY
SACRIFICE OR EXPENDITURE IS INTENSIONALLY AND REASONNABLY MADE OR INCURRED FOR
THE COMMON SAFETY FOR THE PURPOSE OF PRESERVING FROM PERIL THE PROPERTY
INVOLVED IN A COMMON MARITIME ADVENTURE.”
THIS MEANS THERE ARE 5 ESSENTIAL FEATURES NECESSARY TO
CONSTITUTE GENERAL AVERAGE ACT. AS
- THERE MUST BE A COMMON ADVENTURE, MUST BE FOR
COMMON SAFETY, THE SACRIFICE OR EXPENDITURE MUST HAVE BEEN VOLUNTARILY MADE AND
MUST BE EXTRAORDINARY IN KIND, AND MUST BE REASONABLY MADE.
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THE POSSIBILITY OF RECOVERY UNDER GENERAL AVERAGE THEORY,
WITH THE LOW ODDS OF A VESSEL BEING TAKEN BY PIRATES WHEN TRANSITTING
THE GUF OF ADEN, MAY TEMPT THE SHIP OWNER TO DECLINE K&R
COVERAGE, ESPECAILLY WHEN CASH FLOW IS TIGHT.
UNDER ENGLISH LAW, PAYMENT OF A RANSOM IS NOT ILLEGAL PER SE
AND, ACCORDINGLY, CAN BE ADMITTED IN GENERAL AVERAGE, ALL 5 FEATURES BEING
PRESENT IN TREMS OF RULE A OF THE YORK ANTWERP RULES AS I MENTIONED ABOVE.
GENERAL AVERAGE DOES PROVIDE AN AVENUE FOR RECOVERY FOR THE
SHIPOWNER WHICH PROBABLY MAY TAKE MOTHS AFTER A VOYAGE IS COMPLETED FOR THAT
RECOVERY TO BE HAD TO MAKE MATTER WORSE , IT MAY BE A DISPUTE ABOUT IT.
IT IS THE IMPORTANT DECISION FOR THE OWNER WHICH ONE HE WILL
CHOOSE.
HOWEVER UNDER MODERN ANTI-TERRORISM LEGISLATION, FUNDING TO
SUPPORT TERRORISM DIRECTLY OR INDIRECTLY
IS LEGAL.
IN THIS CONNECTION,
IT IS SUBMITTED THAT THERE IS LITTLE EVIDENCE TO SUPPORT THE SUGGESTION THAT
RANSOM PAYMENTS IN THE CURRENT SOMALIA PIRACY CASES ARE FINDINGS ITS WAY TO
TERRORIST OR POLITICAL ORGANISATIONS TO FUND TERRORIST ACTIVITIES, THERE BEING
GENERALLY THE VIEW THAT SOMALIA PIRACY IS FOR PERSONAL GAIN.
UNLESS THE SHIPOWNER HAD K&R INSURANCE, ANY CLAIM MADE
TO COVER RANSOM FOR THE CREW WOULD ONLY BE AT THE DISCREATION OF THE P&I
CLUBS’BOARD.
IN THIS INSTANCE, THE PIRATES’ DEMAND FOR A RANSOM WAS ONLY
TIED TO THE HOLDING OF THE CAPTAIN ON THE DRIFTING LIFE BOAT, IT WOULD
THEREFORE BE DIFFICULT FOR A SHIPOWNER TO RECOVER AN INSURANCE CLAIM FOR
RANSOM, WHEN THE HOSTAGE WAS BEING HELD AWAY FROM THE VESSEL ITSELF.
IF THE RANSOM WAS PAID,THE OWNER WOULD HAVE TO SUBMIT THE CLAIM TO THEIR P&I CLUB, LIKELY UNDER
THE DISCRETION AFFORDED BY THE OMNIBUS RULE.
THE USUAL P&I LIABILITIES ARISING OUT OF INCIDENTS OF
PIRACY WILL, PROVIDED THE “WEAPONS OF WAR” EXCLUTION IS NOT TRIGGERED ,BE
COVERED BY P&I CLUBS.
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RANSOM IS NOT A RISK WHICH IS EXPRESSLY COVERED AND ONE CLUB
HAS AN EXPRESS EXCLUTION OF LIABILITY FOR RANSOM PAYMENTS.
BUT IT IS POSSIBLE THAT RANSOM MIGHT BE RECOVERABLE FROM
CLUBS AT THE DISCREATION OF BOARDS UNDER SUE & LABOUR OR OMNIBUS PROVISIONS IF THIS IS NOT
RECOVERABLE UNDER ANY OTHER INSURANCE AND CANNOT BE RECOVERED FROM OTHER
SOURCES.
ON THE OTHER SIDE; SHIPOWNERS’RIGHTS AND OBLIGATIONS IN
RELATION TO CHARTERERS’S ORDERS TO TRANSIT THE GULF OF ADEN REGION WILL DEPEND
UPON THE NATURE OF THE CHARTER PARTY ( VOYAGE OR TIME CHARTER) AND THE RELEVANT
CHARTER PARTY TERMS.
THERE ARE RECENTLY DEVELOPED PIRACY CLAUSES IN USE WHICH
SEEK TO PRESERVE OWNER’S RIGHT TO EITHER REFUSE ORDERS TO PROCEED TO PIRACY
RISK AREAS OR TO SEEK ALTERNATIVE ORDERS IN APPROPRIATE CASES.
IN EACH CASE IT WILL BE NECESSARY TO EXAMINE THE RELEVANT
CONTRACTS TO DETERMINE THE EXTENT OF THE SHIPOWNERS RIGHT AND OBLIGATIONS AND
TO NEGOTIATE AN AGREED ALLOCATION OF RISK BETWEEN SHIPOWNERS AND CHARTERERS.
WHO WILL PAY THESE EXTRA INSURANCE COSTS ?
ALTHOUGH THE SPECIFICATION OF COSTS IS ARGUABLY MORE ONEROUS
IN BOTH THE STANDARD CONWARTIME 2004 AND THE BIMCO PIRACY CLAUSE 9TH OF MARCH 2009 , FUNDING THESE COSTS
ARGUABLY PROVIDES MORE CERTAINTY AND THE BALANCE IS FOR COMMERCIAL ASSESSMENT
BY BOTH SHIPOWNER AND CHARTERER.
THE INCLUSION OF A REIMBURSEMENT OF “ANY CLAIMS FROM HOLDERS
OF BILL OF LADING OR THIRD PARTIES CAUSED BY SUCH ORDERS” IN THE BIMCO PIRACY CLAUSE 9
TH OF MARCH 2009 IS PROBABLY AN EXTENSION OF THE EXPECTABLE RESPONSIBILITIES
AND AS SUCH MUST BE SPECIFICALLY AGREED BY THE CHARTERERS’ LAIBILITY INSURER AS
BEING PROTECTED BY THIER COVERAGE.
SO,THERE ARE 2 POPULAR FORMAL ADDITIONAL CHARTER CLAUSES FOR
TIME CHARTERS RELEVANT TO PIRACY “ CONWARTIME 2004” AND THE PIRACY CLAUSE
FOR TIME CHARTER PARTIES DATED 9TH OF MARCH 2009 BOTH FROM BIMCO.
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OTHER TIME CHARTER PARTY FORMS HAVE SUBSTANTIALLY EQUIVALENT
PROVISIONS ,WHILE VOYAGE CHARTERS HAVE
BIMCO’S EQUIVALENT VOYWAR 2004 OR SIMILAR.
THE ESSENTIAL MESSAGE OF THESE CLAUSES IS TO ALLOCATE THE
EXPENSE OF ADDITIONAL INSURANCE TO CHARTERERS. THE 2009 CLAUSE ALSO SAYS “THE
CHARTERERS SHALL INDEMNIFY THE OWNERS FOR ANY CLAIMS FROM HOLDERS OF BILL OF
LADING OR THIRD PARTIES CAUSED BY SUCH
ORDERS (FROM UNDERWRITERS OR FROM FLAG
OR ANY OTHER AUTHORITY OR UNITED NATIONS)
CONWARTIME 2004 DEFINES “WAR RISKS” TO INCLUDE “ ACTS OF
PIRACY” BUT OTHERWISE IS A WIDELY LITANY OF WAR AND ASSOCIATED RISKS.
THE 2009 CLAUSE IS SPECIFICALLY WITH REGARD TO THE “ RISK OF
PIRACY”
AND BY IMPLICATION IS TO BE ADDED TO CHARTERS WHICH ALREADY
HAVE A “ WAR RISK” DEFINITION BUT WHICH DOES NOT INCLUDE PIRACY SPECIFICALLY.
IN COMMON FOR THE VOYAGE AND TIME CHARTERS EXCEPT BAREBOAT THE PROVISIONS ARE ESSENTIALLY
ABOUT ALLOCATING EXPENSES BETWEEN SHIPOWNER AND CHARTERER.
THE CHARTERER IS PRIMARILY RESPONSIBLE FOR NAMING SAFE PORTS
AND BERTHS AND FOR PROVIDING THE CARGO, BUT IN TIME CHARTERS THE CHARTERER ALSO
PROVIDES BUNKERS AND OTHER
PROPULSION CONSUMABLES.
THE OWNER PROVIDES THE SHIP AS SEAWORTHY AND AS CARGO WORTHY
AND ACT AS A BALIEE OF CARGO AND IS
RESPONSIBLE FOR MOST DAMAGE TO IT THROUGH VOYAGE, BUT NOT ALL RISKS.
THE INTERNATIONAL CONVENSIONS KNOWNS AS “HAGUE VISBY” OR
“HAMBURG” PROVISIONS HAVE BEEN
TRANSLATED INTO “CARRIAGE OF GOODS BY SEA” (COGSA) LAWS, AND TYPICALLY EACH
TIME CHARTER WILL STIPULATE THAT THE BILL OF LADING SHOULD CONTAIN THE HAGUE
VISBY RULES WHICH PARTICULARY EXCLUDE ANY RESPONSIBILITY FOR PERILS OF THE SEA,
ACTS OF WAR OR PUBLIC ENEMIES OR ARREST OR RESTRAINT OR ANY OTHER CAUSE WITHOUT
THE FAULT OR PRIVITY OF THE CARRIER.
SOMETIMES , MANY CHARTES STIPULATE THAT THE OWNER WILL ONLY
BE LIABLE FOR DELAY.. AND FOR LOSS OR DAMAGE TO GOODS ON BOARD.,
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IF SUCH DELAY OR LOSS HAS BEEN CAUSED BY WANT OF DUE
DILIGENCE ON THE PART OF THE OWNERS OR THEIR MANAGER IN MAKING THE VESSEL
SEAWORTHY AND FITTED FOR THE VOYAGE OR ANY OTHER PERSONAL ACT OR OMISSIONS OF
THE OWNERS OR THEIR MANAGERS (BALTIME 39/2001).
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VOYAGE CHARTERS WILL TYPICALLY PROVIDE FOR CHARTERERS
TO REIMBURSE ANY INCREASE IN PREMIUMS OR ADDITIONAL PREMIUMS BETWEEN THE DATE
OF FIXTURE AND THE SHIP’S ARRIVAL AT AN “ AREA OF ENHANCED THE RISK” WHERE WAR
UNDERRWITERS DEMAND ADDITIONAL PREMIUM.
-
TIME CHARTERS WILL TYPICALLY PROVIDE FOR CHARTERERS TO
REIMBURSE THE ENTIRE COST OF ADDITIONAL
PREMIUMS
TIME AND VOYAGE CHARTERS ARE
SILENT ON INSURANCES WHICH THE CHARTERER IS TO PROVIDE , LEAVING IT TO THE PRUDENCE OF INDIVIDUAL
CHARTERERS TO INSURE WHATEVER RESPONSIBILITY THEY HAVE FOR HULL DAMAGE THROUGH UNSAFE BERTHS AND PORTS OR VICARIOUS
LIABILITY TO THIRD PARTIES THIS MEANS THE CHARTERERS WILL INSURE “CHARTERERS
LAIBILITY TO THIRD PARTIES AND FOR FULL DAMAGE WHICH PERHAPS AS A CORPORATE
PROTECTION FOR BOTH MARINE AND WAR RISKS.
NOWADAYS TIME CHARTERER FORMS INCLUDE IN THEIR “WAR CLAUSE”
PROVISIONS ENABLING THE OWNER OR MASTER TO DECLINE TO ENTER
WAR AREAS OR TO ENTER ONLY WITH LIBERTY TO NAVIGATE UNDER LOCAL ORDERS OR DROP
CARGO SHORT DESTINATION ,WITHOUT BREACHING THE CHARTER.
BOTH CONWARTIME 2004 AND THE PIRACY CLAUSE 2009 PROVIDE THAT CHARTERERS SHOULD
PAY THE ACTUAL BONUS OR ADDITIONAL WAGES PAID BY THE OWNERS UNDER THE CREW
CONTRACTS FOR EACH AREA OF WAR RISK OR PIRACY RISK RESPECTIVELY.
ON THE OTHER SIDE;THE SHIP OWNER’S MARINE AND WAR RISKS
INSURANCES SHOULD IDEALLY REFLECT ONE ANOTHER AND BOTH WILL COVER GENERAL
AVERAGE SO THAT THE CLAIM WILL FALL ON WHICHEVER COVERS THE ACTIVE PERIL.
SINCE P&I INSURERS HABITUALLY EXCLUDE WAR RISKS ,WAR
INSURERS HAVE ACCEPTED P&I RISKS ON THEIR HULL POLICIES.
MOST OF INSURERS WILL AGREE WITHIN THEIR POLICY TO
ACCOMMODATE CLAIMS FOR GENERAL AVERAGE IN FULL WITHOUT THE NEED TO DEMAND CONTRIBUTION FROM CARGO
OR CHARTERERS.
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SO THE BEST WAY FOR THE OWNERS IS TO CHOOSE WHICH COVER THEY
NEED AND BUY IT, THE CHARTERERS CHOOSE
COMMERCIALLY AND REQUEST THE OWNER NAME THEM AS CO –ASSURED WHICH MEANS JOINTLY
ASSURED UNDER THE MARINE AND WAR RISK POLICIES BUT THIS MEANS THEY ARE FORCED
BY INSURERS TO INSURE CHARTERERS LAIBILITY SEPERATELY.
AS IN ALMOST ANY SITUATION WHERE ONE IS EXPOSED TO
RISK; MORE INSURANCE IS BETTER THAN LESS
AND K&R COVERAGES IS BEST WHEN THERE IS A RISK OF PIRACY.
