According to the first sentence, the loss of time is to be calculated in days, hours and minutes. It follows quite clearly from this that the assured may also claim loss of hire for any loss of time less than a full day. This calculation principle mirrors similar rules found in time and voyage charters provisions regarding the calculation of off-hire and demurrage respectively. The level of precision called for in loss of time calculations is justifiable in light of the large daily amounts which are often at stake in connection with vessels insured for loss of hire.
The second sentence similarly reflects customary off-hire and demurrage calculations. The point with the second sentence is to make it clear that, if the vessel’s speed is reduced to half due to an engine damage and the vessel is proceeding at half speed for 40 days, the number of days consumed under the insurance is not 40 days, but 20 days which is the actual delay, see also the discussion under 3.3 above.
The Commentary to Cl. 16-4 is discussing the problem of the assured postponing repairs unduly and states:
However, the provision has given rise to certain problems in practice in cases where the cause of the ship’s being partly deprived of income is not reduced speed, but a fault in the ship’s equipment, holds or tanks. If, in such a situation, the assured allows the ship to continue operating with the defective equipment for a period of time, and subsequently carries out repairs when this is convenient in relation to the ship’s charterparties, the result is first a partial time loss linked to the ship’s reduced operations, followed by a full loss of time during the period of repairs. In principle, however, the insurer should not be liable for a loss of time that is greater than what would have occurred if the ship had been repaired immediately. In connection with the 2003 revision, therefore, the Committee considered limiting the conversion provision to situations where the reason for the ship’s being partly deprived of income was reduced speed, and giving more limited cover if the reduced income was due to other causes. In this respect, however, it suffices to refer to Cl. 3-30 and Cl. 3-31 of the Plan which state that the shipowner has a duty to limit his loss. Under Cl. 3-30, second sentence, the assured has a duty to consult the insurer if there is an opportunity to do so. If, for commercial reasons and without consulting the insurer, the assured chooses to postpone making repairs that could have been carried out immediately, and this inflicts a loss on the loss-of-hire insurer, the latter must therefore be able to invoke these rules.