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Ancillary Covers Ancillary Covers September/2007 P&I Charterer’s Liability 3 Slot Charter Insurance 4 Charterer’s Interest 5 Charterer’s All Inclusive Cover 6 All Inclusive S.O.L. Shipowner’s Liability Cover 9 S.O.L. Shipowner’s Liability 10 All inclusive Crew Cover 11 Crew Familiarisation Liability Cover 12 Pre-Delivery Crew Cover 13 Deviation Insurance 14 Passenger Deviation 15 Exxon GA Clause Insurance 16 North America Clean-Up Cover 17 Cash on Board 18 Cargo on Deck 20 Ad Valorem: Specie and Valuable Cargo 21 FD&D Newbuilding 22 H&M Increased Value/Hull Interest 23 Freight Interest 25 Freight All Risk 26 Stores and Provision 27 Loss of Hire 28 General Average Insurance 30 Purchaser’s/Seller’s Interest 31 Loss of Anticipated Profits 32 Commission Interest 33 Mortgagee’s Interest Insurance 34 Innocent Owners Interest Insurance 35 Bunker Insurance 36 Charterer’s Liability Narrative A person or a company acting as charterer of a ship assumes responsibilities broadly similar to those of an owner. The contracting parties - normally a cargo owner or sub-charterer - will view the charterer as the “owner” of the ship. The charterer also assumes liabilities towards the vessel owner, including damage inflicted on the ship. Description Most ships are chartered either on a Time Charter or Voyage Charter contract. In both cases the charterer becomes liable as he occupies a position similar to an owner towards the sub-contracting party (either a sub- charterer or cargo owner). His liabilities towards third parties are then broadly similar to those of a shipowner including liabilities for cargo and oil pollution. Simultaneously, the charterer assumes liabilities towards the party he charters the ship from - the vessel owner or another charterer. Primarily, this type of liability relates to vessel damage caused by, for instance, cargo-handling, unsafe port or berth and bad bunkers. Charterers in any role, whether as voyage charterers or time charterers, need cover for this exposure. Even where the charterparty contractually imposes the liability on the shipowner, most jurisdictions allow a claim- ant to pursue compensation from a party he finds most suitable. The claimant has freedom of choice, to sue either the charterer or the owner. The charterparty will eventually determine, contractually, who should bear the cost, but this may follow a long legal process. Charterer’s Liability insurance is a P&I cover primarily, but for charterers with a fixed premium. Since claims between an owner and a charterer frequently concern hull damages the cover may also include Charterer’s Liability to Hull. Even if the contract is on a Voyage Charter, where the shipowner may have an obligation to ensure named ports are safe for his ships, the charterparty may name a range of ports for discharge. If the port is unsafe, the charterer may have a liability to the shipowner, should damage to the ship occur. Stevedore damage to vessels is commonplace when loading or discharging cargo. This is yet another typical liability imposed on the charterer. All charterers, regardless of position in the “chartering chain”, require cover for both P&I liabilities and dam- age to hull. As soon there is a binding fixture, whether voyage or time charter, the charterer has an insurable exposure. This note is a general description of Charterer’s Liability insurance. For more detailed information, please refer to the slip or Certificate of Entry. Conditions • The cover is based on The Swedish Club Rules for Protection & Indemnity, Rule 9. • Including Damage to Hull, as per Club Rules. • Including War. Vers. 2/sept/2007 www.swedishclub.com Slot Charter Insurance Narrative A person or a company acting as charterer of a ship assumes responsibilities broadly similar to those of an owner. The contracting parties - normally a cargo owner or sub-charterer - will view the charterer as the “owner” of the ship. The charterer also assumes liabilities towards the vessel owner, including damage inflicted on the ship. Description Most ships are chartered either on a Time Charter or Voyage Charter contract. In both cases the charterer becomes liable as he occupies a position similar to an owner towards the sub-contracting party (either a sub- charterer or cargo owner). His liabilities are broadly similar to those of a shipowner, with liability to cargo, to freight and, in rare circumstances, also to pollution claims. Simultaneously, he assumes liabilities towards the party he charters the ship from - the vessel owner or another charterer. Primarily, this type of liability relates to damage caused to the ship in the course of cargo- handling, such as stevedore damage or damage resulting from an unsafe port or berth. Charterers in any role, whether as voyage charterers or time charterers, need cover for this exposure. Even where the charterparty contractually imposes the liability on the shipowner, most jurisdictions allow a claimant to pursue compensation from a party he finds most suitable. The claimant has freedom of choice, to sue either the charterer or the owner. The charterparty will eventually determine, contractually, who should bear the cost, but this may follow a long legal process. Some charterparties provide a clear definition of the division of blame (such as the NYPE). Charterer’s Liability Insurance is a P&I cover primarily, but for charterers with a fixed premium. Many claims between owner and charterer refer to stevedore damage or unsafe port or berth. Therefore, in addition to the P&I cover, this cover may also include Charterer’s Liability to Hull. Even if the contract is on a Voyage Charter, where the shipowner has an obligation to ensure named ports are safe for his ships, the char- terparty may name a range of ports for discharge. If the port is unsafe, the charterer may have a liability to the shipowner, should damage to the ship occur. Stevedore damage to vessels is commonplace when loading or discharging cargo. This is yet another typical liability imposed on the charterer. All charterers, regardless of position in the “chartering chain”, require cover for both P&I liabilities and dam- age to hull. As soon as the contract is signed, whether voyage or time charter, the charterer has an insurable exposure. Slot Charter Insurance is designed for a situation in which the charterer only charters a limited space or a number of slots on a vessel. This note is a general description of Slot Charter Insurance. For more detailed information, please refer to the slip or Certificate of Entry. Conditions • The cover is based on The Swedish Club Rules for Protection & Indemnity, Rule 9. • Including Damage to Hull, as per Club Rules. • Including War. Vers. 2/sept/2007 www.swedishclub.com Charterer’s Interest Narrative A charterer - normally a time charterer - may have a further interest in the chartered vessel. For example, the ship may be sub-let on a time charter or the charterer may have a purchase option. This interest is insurable. Description Charterers commonly charter ships either on a voyage or time charter basis. Primarily in the latter circumstances, the chartered vessel represents future income. Naturally, should the ship be lost, the charterer will not pay charter hire, but he may find it hard to secure a replacement vessel either at the same rate or a ship so suited to the intended trade. As a result, the charterer may not earn the future freight, as anticipated. In order to cover this exposure, the charterer can protect himself by a total loss insurance known as Charterer’s Interest. Should the chartered ship become a total loss, the charterer will be indemnified by this cover. As there is no entitlement to earn money on insurance, but rather only to make good losses - this cover is often provided on a reducing basis. For example, if the charterer anticipates a profit of USD 1.2 million on the vessel during a charter period of, say, one year, his interest when the charter is signed will be that sum. After one month, however, he has earned USD 100,000 and, therefore, his insurable interest at the start of the second month is reduced to USD 1.1 million. This cover is often written on a daily reducing basis. On the last day of cover, where there is no future profit at risk, the insured amount is at zero. This note is a general description of Charterer’s Interest insurance. For more detailed information, please refer to the slip or Certificate of Entry. Conditions This cover is based on Charterer’s Interest on Increased Value, Total Loss Only. • This insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities) Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothen- burg, as per Arbitration Clause Gothenburg (B.1.1). Amended to Total Loss Only. • The Articles of Association and current circulars. • Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons Exclusion Clause C.1.3 (LSW 370, 2003-11-10). • Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10). • Conditions for Hull and Machinery, where applicable. • Cancellation returns only. • Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers. • Reducing: the insured amount in this policy reduces by USD (amount) per day/month from date of inception. • Premiums and rates are calculated on the insured amount at inception of the policy. • Premiums are payable quarterly in advance, 1 January, 1 April, 1 July and 1 October. Delay in payment may render cancellation of cover and interest on delay, as per Rules of the Association. • War included, if agreed. Vers. 2/sept/2007 www.swedishclub.com Charterer’s All Inclusive Cover Narrative A person or a company acting as charterer of a ship assumes responsibilities broadly similar to those of an owner. The contracting parties - normally a cargo owner or sub-charterer - will view the charterer as the “owner” of the ship. The charterer also assumes liabilities towards the vessel owner, including damage inflicted on the ship. In addition a charterer - normally a time charterer - may have a further interest in the chartered vessel. For example, the ship may be sub-let on a time charter or the charterer may have a purchase option. This interest is insurable. Finally, the charterer may have an insurable interest if the chartered ship sustains damage resulting in a particular average covered under the H&M policy. Furthermore, the lost earnings, in the case of a sub-let ship, represent an insurable interest. This insurance offers comprehensive cover in respect of the charterer’s liabilities, interest in the event of a total loss and interest in the case of a particular average on the chartered ship. Description Charterer’s Liability Most ships are chartered either on a Time Charter or Voyage Charter contract. In both cases the charterer becomes liable as he occupies a position similar to an owner towards the sub-contracting party (either a sub- charterer or cargo owner). His liabilities towards third parties are then broadly similar to those of a shipowner including liabilities for cargo and oil pollution. Simultaneously, the charterer assumes liabilities towards the party he charters the ship from - the vessel owner or another charterer. Primarily, this type of liability relates to vessel damage caused by, for instance, cargo-handling, unsafe port or berth and bad bunkers. Charterers in any role, whether as voyage charterers or time charterers, need cover for this exposure. Even where the charterparty contractually imposes the liability on the shipowner, most jurisdictions allow a claim- ant to pursue compensation from a party he finds most suitable. The claimant has freedom of choice, to sue either the charterer or the owner. The charterparty will eventually determine, contractually, who should bear the cost, but this may follow a long legal process. Charterer’s Liability insurance is a P&I cover primarily, but for charterers with a fixed premium. Since claims between an owner and a charterer frequently concern hull damages the cover may also include Charterer’s Liability to Hull. Even if the contract is on a Voyage Charter, where the shipowner may have an obligation to ensure named ports are safe for his ships, the charterparty may name a range of ports for discharge. If the port is unsafe, the charterer may have a liability to the shipowner, should damage to the ship occur. Stevedore damage to vessels is commonplace when loading or discharging cargo. This is yet another typical liability imposed on the charterer. All charterers, regardless of position in the “chartering chain”, require cover for both P&I liabilities and damage to hull. As soon as there is a binding fixture, whether voyage or time charter, the charterer has an insurable exposure. Vers. 2/sept/2007 www.swedishclub.com Charterer’s All Inclusive Cover Charterer’s Interest Charterers commonly charter ships either on a voyage or time charter basis. Primarily in the latter circumstances, the chartered vessel represents future income. Naturally, should the ship be lost, the charterer will not pay char- ter hire, but he may find it hard to secure a replacement vessel either at the same rate or a ship so suited to the intended trade. As a result, the charterer may not earn the future freight, as anticipated. In order to cover this exposure, the charterer can protect himself by a total loss insurance known as Charterer’s Interest. Should the chartered ship become a total loss, the charterer will be indemnified by this section of the cover. This cover is often written on a daily reducing basis. On the last day of cover, where there is no future profit at risk, the insured amount is at zero. Charterer’s Loss of Hire If the chartered ship is sub-let and the charterer wish to insure the difference between the charter rates paid and received, this section of the cover will indemnify the charterer in the event that the ship sustains a par- ticular average covered by the relevant H&M. This section of the cover is also typically written on a daily reducing basis. On the last day of cover, with no potential lost earnings at risk, the insured amount reaches zero. This note is a general description of Charterer’s All Inclusive Cover insurance. For more detailed information, please refer to the slip or Certificate of Entry. Conditions Charterer’s Liability • The cover is based on The Swedish Club Rules for Protection & Indemnity, Rule 9. • Including Damage to Hull, as per Club Rules. • Including War. Charterer’s Interest This cover is based on Charterer’s Interest on Increased Value, Total Loss Only. • This insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities) Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothen- burg, as per Arbitration Clause Gothenburg (B.1.1). Amended to Total Loss Only. • The Articles of Association and current circulars. • Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons Exclusion Clause C.1.3 (LSW 370, 2003-11-10). • Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10). • Conditions for Hull and Machinery, where applicable. • Cancellation returns only. Vers. 2/sept/2007 www.swedishclub.com Charterer’s All Inclusive Cover • Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers. • Reducing: the insured amount in this policy reduces by USD (amount) per day/month from date of inception. • Premiums and rates are calculated on the insured amount at inception of the policy. • Premiums are payable quarterly in advance, 1 January, 1 April, 1 July and 1 October. Delay in payment may render cancellation of cover and interest on delay, as per Rules of the Association. • War included, if agreed. Charterer’s Loss of Hire • Full Norwegian conditions, in accordance with chapters 1-9 and 16 of the Norwegian Marine Insurance Plan of 1996, latest version - all to be interpreted according to Norwegian law and with jurisdiction as per §1-4 of the plan. The Articles of Association and current circulars, with the following special conditions regarding limits, de- ductibles and deductions: • §16-4: Limit of cover per casualty and year, as agreed. • §16-7: Deductible period, as agreed. • §16-7: Additional Machinery Damage Deductible period, as agreed. Club Clauses • The Swedish Club Amended fleet clause A.1 – Fleet. • The Swedish Club Claims Lead Clause A.4. • The Swedish Club Tender Clause A.6. • The Swedish Club Condition Survey Clause A.7.2. • Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons Exclusion Clause C.1.3 (LSW 370, 2003-11-10). • Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10). Vers. 2/sept/2007 www.swedishclub.com All Inclusive S.O.L. Shipowner’s Liability Cover Narrative There are numerous occasions when a shipowner has to deviate from the normal route or the agreed B/L. In these situations, there is exposure to cargo liability. Such deviations to the B/L can be covered on the specific occasions by the Club but we also offer an “All Inclusive S.O.L. cover” which provides for liberties to deviate under the policy period. Description The “All-Inclusive S.O.L. cover” includes a number of specific liabilities that are mainly excluded from the P&I cover. By tailor-making this cover for an individual member he may use this cover as a back-up to the P&I during the policy period. Deductibles are similar as for P&I and this will thereby create a seamless cover for the member. A brief description what this cover can include is: Deviation cover P&I rules clearly exclude any deviation ordered by the shipowner. A deviation may be for the purposes of bunkering or crew change, but may also be for provisioning and taking on of spares. Not allowed deviations frustrate the B/L and so denies the shipowner any limitations under the rules governing the B/L (e.g. the Hague-Visby Rules). Should the deviation for any purpose be excluded from P&I cover, the shipowner requires cover for the risk of breaching the B/L. Extended ware-house cover Cargo being accepted for shipment or delivery beyond the normal P&I rule of 14 days. The extended storage prior or after the transport. Lightering Cargo being transhipped or lightered at a port. May not be covered under the P&I if it is a frustration of the B/L. Dry-docking with cargo on board The member decides to leave cargo on board during dry docking. This can be a breach of the B/L and thereby not covered under P&I. Storage of cargo whilst under repairs Cargo may have to be temporarily stored whilst the vessel is undergoing repairs. This extended exposure may be included in the cover. Additional cover may include subject to special terms Ante dated Bill of Ladings. This note is a general description of the All Inclusive S.O.L. cover. For more detailed information, please refer to the slip or Certificate of Entry. Conditions The cover is based on: • The member’s entry in The Swedish Club for P&I, but including liability excluded by the deviation/feed- ering/transhipment/storage/lightering of the cargo, up to the agreed limit (the cargo value). Vers. 2/sept/2007 www.swedishclub.com S.O.L. Shipowner’s Liability Transshipment-Feeder-Storage Lightering- Drydocking with Cargo Narrative There are several situations when a shipowner has to adopt measures and deviate from the normal procedures. In these situations, there is exposure to cargo liability. S.O.L. cover is designed for such special cases. Description If a vessel has to drydock with cargo on board, the Bill of Lading may be frustrated and the shipowner will loose P&I cover. S.O.L. insurance covers this additional exposure. This exposure also applies if a cargo has to be transhipped, stored, feedered or lightered. The defence under the B/L is frustrated and P&I cover lost. The potential liability is the value of the cargo declared. This note is a general description of S.O.L. For more detailed information, please refer to the slip or Certifi- cate of Entry. Conditions The cover is based on: • The member’s entry in The Swedish Club for P&I, but including liability excluded by the feedering/tran- shipment/storage/lightering of the cargo, up to the agreed limit (the cargo value). Vers. 2/sept/2007 www.swedishclub.com
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