Appendix

Nordic Marine Insurance Plan of 2013, Version 2016
Chapter 16, Section 7 Chapter 17, Sections 4 & 5-6 Chapter 18[35]



[35] Reproduced with the permission of the copyright holder, The Nordic Association of Marine Insurers (Cefor).

  1. Chapter 16

    Clause 16-1. Main rules regarding the liability of the insurer

    The insurance covers loss due to the ship being wholly or partially deprived of income as a consequence of damage to the ship which is recoverable under the conditions of the Plan, or which would have been recoverable if no deductible had been agreed, see Cl. 12-18. If the hull insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules in Chapters 10 - 12 of the Plan shall be replaced by the corresponding conditions of the insurance concerned when assessing whether the damage is recoverable.

    The insurance also covers loss due to the ship being wholly or partially deprived of income:

    1. because it has stranded,

    2. because it is prevented by physical obstruction (other than ice) from leaving a port or a similar limited area, or

    3. as a consequence of measures taken to salvage or remove damaged cargo, or

    4. as a consequence of an event that is allowed in general average pursuant to the 1994 York-Antwerp Rules.

     

    Clause 16-2. Total loss

    The insurer shall not be liable for loss of time resulting from a casualty which gives the assured the right to compensation for total loss under Chapter 11 of the Plan or under the corresponding conditions in the hull insurance that applies to the ship pursuant to Cl. 16-1, sub-clause 1, second sentence.

     

    Clause 16-3. Main rule for calculating compensation

    Compensation shall be determined on the basis of the time during which the ship has been deprived of income (loss of time) and the loss of income per day (the daily amount). Loss of time that occurred prior to the events described in Cl. 16-1 shall not be recoverable.


    Clause 16-4. Calculation of the loss of time

    Loss of time shall be stipulated in days, hours and minutes. A period of time during which the ship has only partially been deprived of income shall be converted into a corresponding period of total loss of income.

    The insurer's liability for loss of time resulting from any one casualty, and for the total loss of time resulting from all casualties occurring during the insurance period, shall be limited to the sum insured per day multiplied by the number of days of indemnity per casualty and altogether stated in the insurance contract.

     

    Clause 16-5. The daily amount

    The assured's loss of income per day (the daily amount) shall be fixed at the equivalent of the amount of freight per day under the current contract of affreightment less such expenses as the assured saves or ought to have saved due to the ship being out of regular employment.

    If the ship is unchartered, the daily amount shall be calculated on the basis of average freight rates for ships of the type and size concerned during the period in which the ship is deprived

     

    Clause 16-6. Agreed daily amount

    If it is stated in the insurance contract that loss of time shall be compensated for by a fixed amount per day, this amount shall be regarded as an agreed daily amount unless the circumstances clearly indicate otherwise.

     

    Clause 16-7. Deductible period

    Each casualty shall be subject to a deductible period which shall run from the commencement of the loss of time and last until the loss of time, calculated in accordance with the rule in Cl. 16-4, sub-clause 1, second sentence, is equivalent to the deductible period stated in the insurance contract. Loss of time in the deductible period is not recoverable.

    Damage caused by heavy weather or navigating in ice which has occurred during the period between departure from one port and arrival at the next one shall be regarded as one casualty.

    If a separate deductible period for damage to machinery has been agreed on, Cl. 12-16 shall apply correspondingly.

     

    Clause 16-8. Survey of damage

    The provisions of Cl. 12-10 shall apply correspondingly to this insurance.

     

    Clause 16-9. Choice of repair yard

    The insurer may require that tenders for repairs be obtained from repair yards of his choice. If the assured does not obtain such tenders the insurer may do so.

    If, due to special circumstances, the assured has reasonable grounds to object to the repairs being carried out by one of the repair yards that has submitted a tender, he may require that the tender from that yard be disregarded.

    The assured shall decide which yard is to be used. However, the liability of the insurer shall be limited to the loss of time under the tender that would have resulted in the least loss of time among the tenders for which the assured would have been able to claim compensation under the hull insurance. If the assured chooses this repair yard, the claim shall be settled on the basis of the actual time lost, even if this is greater than that specified in the tender. If the hull insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the liability of the insurer shall be limited to the loss of time under the tender that would have resulted in the least loss of time plus half of any additional loss of time that may occur.

     

    Clause 16-10. Removal to the repair yard, etc.

    Loss of time during removal to the repair yard shall be attributed to the category of repairs that necessitated the removal.

    If removal to the repair yard was necessary for more than one category of repairs, the removal time shall be apportioned in accordance with the time that each category of work would have required if carried out separately. Removal time that falls within the deductible period shall not be apportioned.

    The rules of  sub-clauses 1 and 2 shall also apply to loss of time during surveys, while obtaining tenders, during tank cleaning, while waiting to commence repairs or due to other similar measures that were necessary in order to carry out the repairs.

     

    Clause 16-11. Extra costs incurred in order to save time

    The insurer shall be liable for extra costs incurred in connection with temporary repairs and in connection with extraordinary measures taken in order to avert or minimise loss of time covered by the insurance, insofar as such extra costs are not recoverable from the hull insurer. If the hull insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules of Cl. 16-1,  sub-clause 1, second sentence, shall apply.

    The insurer shall not, however, be liable for such costs in excess of the amount he would have had to pay if such measures had not been taken.

    If time is saved for the assured, he shall bear a share of the extra costs that is proportionate to the time saved for his account.

     

    Clause 16-12. Simultaneous repairs

    If repairs covered under this insurance are carried out simultaneously with work which is not covered under any loss of hire insurance, but which:

    1. is carried out to fulfil classification requirements, or

    2. is necessary to enable the ship to meet technical and operational safety requirements or perform its contractual obligations, or

    3. is related to the reconstruction of the ship,


    the insurer shall pay compensation for half of the time common to both categories of repair in excess of the deductible period.

    If repairs resulting from two casualties, both of which are covered under this insurance, are carried out simultaneously, the rule in sub-clause 1 shall apply correspondingly for the time that is within the deductible period of one casualty, but not within the deductible period of the other casualty.

    If repairs covered under this insurance and work covered under other loss of hire insurance are carried out simultaneously, the insurer shall pay compensation for half of the repair time common to both categories of work in excess of the deductible period. This also applies where repairs under the other insurance contract are carried out within the deductible period under this insurance contract. Furthermore, if work which is not covered underany loss of hire insurance but which falls within the scope of sub-clause 1 is carried out simultaneously, the insurer shall only pay compensation for one fourth of the common repair time which exceeds the deductible period.

    When applying the rules set out in sub-clauses 1-3, each category of work shall be deemed to have lasted for the number of days the work would have required if each category of work had been carried out separately, reckoned from the time the work started. Unless the circumstances clearly indicate another point in time, all categories of work shall be deemed to have started on the ship's arrival at the yard. Any delay which might occur due to several categories of work being carried out simultaneously shall be attributed to all categories in proportion to the number of days each category would have required if carried out separately, reckoned from the time the work started. However, the insurer’s liability shall not exceed the amount that would have been payable if the category of work for which he is liable had been carried out separately.

     

    Clause 16-13. Loss of time after completion of repairs

    After repairs have been completed, the insurer shall only be liable for loss of time:

    1. until the ship can resume the voyage or activity that it was engaged in under the contract of affreightment that was in force at the time of the casualty,

    2. until ships which are employed in liner trade or in another way follow a fixed route or operate in a defined geographical area can resume their activity,

    3. while the ship sails to the first port of loading under a contract of affreightment that was entered into with binding effect prior to the casualty,

    4. until passenger ships can resume their activity, but for a period not exceeding fourteen days.


    Cl. 16-10 shall apply correspondingly to loss of time after completion of repairs.

     

    Clause 16-14. Repairs carried out after expiry of the insurance period

    The insurer shall not be liable for loss of time resulting from a stay at a repair yard that commences more than two years after expiry of the insurance period.

    Loss of time resulting from a stay at a repair yard which commences after expiry of the insurance period shall be recoverable in accordance with the rules of Cl. 16-5, even if the daily amount is an agreed amount pursuant to Cl. 16-6, if this results in lower compensation.

     

    Clause 16-15. Liability of the insurer when the ship is transferred to a new owner

    When damage to the ship is repaired in connection with a transfer of ownership, the insurer shall not be liable for time that would in any event have been lost in connection with the said transfer. If the transfer has to be postponed due to repairs covered by this insurance, the insurer shall be liable for the assured's loss of interest in accordance with the rules of Cl. 5-4, even though the ship would not have earned income during the postponement.

    The insurer's liability pursuant to sub-clause 1 shall not exceed the compensation calculated on the basis of the sum insured per day and:

    1. the period of time by which the transfer was postponed, or

    2. the time it must be estimated that the buyer will take to repair the ship,


    less the agreed deductible period. The deductible period is calculated in consecutive days even if the loss of interest differs from the sum insured per day. No compensation may be claimed under Cl. 16-13 in these cases.

    The assured's claim against the insurer may not be transferred to a new owner.

     

    Clause 16-16. Relationship to other insurances and general average

    The rules as to subrogation in Cl. 5-13 of the Plan shall apply correspondingly to:

    1. the assured's right to claim compensation for loss of time and operating costs during removal to a repair yard under Cl. 12-11 or Cl. 12-13 of the Plan, or equivalent provisions in other conditions applicable to the ship's hull insurance, and

    2. any right the assured might otherwise have to claim compensation for the loss from another insurer or in general average.
  2. Section 7 Chapter 17

    Clause 17-56. Relationship to Chapter 16

    The provisions of Chapter 16 apply with the changes prescribed in Cl. 17-57 to Cl. 17-61.

     

    Clause 17-57. Liability of the insurer/applies instead of Clause 16-1

    The insurance covers loss due to the vessel being wholly or partially deprived of income on account of damage to the vessel, provided that the damage is recoverable under Chapter 17, Section 2, or would have been recoverable if no deductible had been agreed, see Cl. 12-18. If the hull insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules in Chapter 17, Section 2, shall be replaced by the corresponding conditions of the insurance concerned when assessing whether the damage is recoverable. If the hull insurance provides extended cover under Chapter 17, Section 3, the rules in the first and second sentences shall apply correspondingly in relation to Section 3.

     

    Clause 17-58. Total loss/applies instead of Clause 16-2

    The insurer is not liable for loss of time resulting from a casualty that gives the assured the right to compensation for total loss under Chapter 11 with Cl. 11-3, sub-clause 2, amended pursuant to Cl. 17-11 or under the corresponding conditions in the hull insurance that apply to the ship pursuant to Cl. 17-57, second sentence.

     

    Clause 17-59. Calculation of compensation for fishing vessels/Ref. Clause 16-3

    The insurance does not cover loss that is due to the vessel being deprived of income from fishing as a result of regulatory measures introduced by the authorities or the fact that the authorities have stopped fishing activities.

    Quotas which are not fished in full during the quota year due to damage to the vessel, cf. Cl. 17-57, and which are allowed by the authorities to be transferred to a new quota year, shall be regarded as quotas fished in the original quota year, if the quota is fished in the new quota year. The same applies to quotas transferred by the vessel to other vessels in the quota year.

    The claims adjustment shall be issued as soon as possible after the quota year is over, but in cases where quotas are transferred to a new quota year, the claims adjustment shall be issued as soon as possible after the end of the new quota year, cf. Cl. 5-2 and Cl. 5-6.

     

    Clause 17-60. The daily amount for fishing vessels/applies instead of Clause 16-5

    The assured's loss of income per day (the daily amount) shall be calculated on the basis of the average income per day from fishing for vessels of the type and size in question and the geographical area in which it is natural for the vessel to deliver fish during the period when the vessel is deprived of income, less such expenses as the assured saves or ought to have saved due to the ship not being regularly operated.

     

    Clause 17-61. Agreed daily amount for fishing vessels/applies instead of Clause 16-6

    If it is stated in the insurance contract that a certain amount per day shall be paid in compensation for loss of income, the said amount is the maximum compensation that may be paid out per day under Cl. 17-60 unless it is clearly evident from the contract that the amount is an agreed daily amount.

  3. Section 4 Chapter 18

    Clause 18-43. Main rules regarding the liability of the insurer

    The insurance covers loss due to the MOU being wholly or partially deprived of income as a consequence of damage to the MOU which is recoverable under the conditions of the Plan, or which would have been recoverable if no deductible had been agreed, see Cl. 18-33. If the H&M insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules in Chapter 18, Section 2, of the Plan shall be replaced by the corresponding conditions of the insurance concerned when assessing whether the damage is recoverable.

    The insurance also covers loss due to the MOU being wholly or partially deprived of income:

    1. because it has stranded,
    2. because it is prevented by physical obstruction (other than ice) from  leaving a port or a similar limited area, or
    3. as a consequence of measures taken to salvage or remove damaged cargo, or
    4. as a consequence of an event that is allowed in general average pursuant to the 1994 York-Antwerp Rules.

     

    Clause 18-44. Total loss

    The insurer shall not be liable for loss of time resulting from a casualty which gives the assured the right to compensation for total loss under Chapter 18 of the Plan or under the corresponding conditions in the H&M insurance that applies to the MOU pursuant to Cl. 18-43, sub-clause 1, second sentence.

     

    Clause 18-45. Main rule for calculating compensation

    Compensation shall be determined on the basis of the time during which the MOU has been deprived of income (loss of time) and the loss of income per day (the daily amount). Loss of time that occurred prior to the events described in Cl. 18-43 shall not be recoverable.

     

    Clause 18-46. Calculation of the loss of time

    Loss of time shall be stipulated in days, hours and minutes. A period of time during which the MOU has only partially been deprived of income shall be converted into a corresponding period of total loss of income.

    The insurer’s liability for loss of time resulting from any one casualty, and for the total loss of time resulting from all casualties occurring during the insurance period, shall be limited to the sum insured per day multiplied by the number of days of indemnity per casualty and altogether stated in the insurance contract.


    Clause 18-47. The daily amount

    The assured’s loss of income per day (the daily amount) shall be fixed at the equivalent of the amount of hire per day under the current contract of employment, less such expenses as the assured saves or ought to have saved due to the MOU being out of regular employment.

    If the MOU is unchartered, the daily amount shall be calculated on the basis of average rates of hire for MOUs of the type, size and area of operation concerned during the period in which the MOU is deprived of income.


    Clause 18-48. Agreed daily amount

    If it is stated in the insurance contract that loss of time shall be compensated for by a fixed amount per day, this amount shall be regarded as an agreed daily amount unless the circumstances clearly indicate otherwise.


    Clause 18-49. Deductible period

    Each casualty shall be subject to a deductible period which shall run from the commencement of the loss of time and last until the loss of time, calculated in accordance with the rule in Cl. 18-46, sub-clause 1, second sentence, is equivalent to the deductible period stated in the insurance contract. Loss of time in the deductible period is not recoverable.

    Damage caused by heavy weather or navigating in ice which has occurred during the period between departure from one port or location and arrival at the next port or location shall be regarded as one casualty. 

    Damage caused by heavy weather occurring as a result of the same atmospheric disturbance whilst the MOU is stationary at one location shall be regarded as a single casualty.

     

    Clause 18-50. Survey of damage

    The provision of Cl. 18-27 shall apply correspondingly to this insurance.

     

    Clause 18-51. Choice of repairer

    The insurer may require that tenders for repairs be obtained from repairers of his choice. If the assured does not obtain such tenders, the insurer may do so. 

    If, due to special circumstances, the assured has reasonable grounds to object to the repairs being carried out by one of the repairers that has submitted a tender, he may require that the tender from that repairer be disregarded.

    The assured shall decide which repairer is to be used, However, the liability of the insurer shall be limited to the loss of time under the tender that would have resulted in the least loss of time amount the tenders for which the assured would have been able to claim compensation under the H&M insurance. If the assured chooses this repairer, the claim shall be settled on the basis of the actual time lost, even if this is greater than that specified in the tender. If the H&M insurance has been effected on conditions other than those of the Plan, liability of the insurer shall be limited to the loss of time under the tender that would have resulted in the least loss of time plus half of any additional loss of time that may occur.

     

    Clause 18-52. Move to the repair location, etc.

    Loss of time during move to the repair location shall be attributed to the category of work that necessitated the move.

    If move to the repair location was necessary for more than one category of work, the time of the move shall be apportioned in accordance with the time that each category of work would have required if carried out separately. Time of move that falls within the deductible period shall not be apportioned.

    The rules of sub-clauses 1 and 2 shall also apply to loss of time during surveys, while obtaining tenders, during tank cleaning, while waiting to commence repairs or due to other similar measures that were necessary in order to carry out the repairs.


    Clause 18-53. Extra costs incurred in order to save time

    The insurer shall be liable for extra costs incurred in connection with temporary repairs and in connection with extraordinary measures taken in order to avert or minimise loss of time covered by the insurance, insofar as such extra costs are not recoverable from the hull insurer. If the H&M insurance has been effected on conditions other than those of the Plan, and these conditions have been accepted in writing by the insurer, the rules of Cl. 18-43, sub-clause 1, second sentence, shall apply.

    The insurer shall not, however, be liable for such costs in excess of the amount he would have had to pay if such measures had not been taken.

    If time is saved for the assured, he shall bear a share of the extra costs that is proportionate to the time saved for his account.

     

    Clause 18-54. Simultaneous works

    If repairs covered under this insurance are carried out simultaneous with work which is not covered under anyloss of hire insurance, but which:

    1. is carried out to fulfil classification requirements, or
    2. is necessary to enable the MOU to meet technical and operational  safety requirements or perform its contractual obligations, or
    3. is related to the reconstruction of the MOU,


    the insurer shall pay compensation for half of the time common to both categories of works in excess of the deductible period. Works under a - c, which would not have deprived the MOU from income if carried out separately and which have not delayed the casualty repairs, shall not be taken into account. If casualty damage is discovered or occurs during the period the MOU would have been deprived of income if the work under a - c had been carried out separately, time for repairs carried out simultaneously with scheduled works under a - c shall not be compensated.

    If repairs resulting from two casualties, both of which are covered under this insurance, are carried out simultaneously, the rule in sub-clause 1 shall apply correspondingly for the time that is within the deductible period of one casualty, but not within the deductible period of the other casualty.

    If repairs covered under this insurance and work covered under other loss of hire insurance are carried out simultaneously, the insurer shall pay compensation for half of the repair time common to both categories of work in excess of the deductible period. This also applies where repairs under the other insurance contract are carried out within the deductible period under this insurance contract. Furthermore, if work which is not covered under any loss of hire insurance, but which falls within the scope of sub-clause 1, is carried out simultaneously, the insurer shall only pay compensation for one fourth of the common repair time which exceeds the deductible period.

    When applying the rules set out in sub-clauses 1-3, each category of work shall be deemed to have lasted for the number of days the work would have required if the two categories of work had been carried out separately, reckoned from the time the work started. Unless the circumstances clearly indicate another point in time, all categories of work shall be deemed to have started on the MOU’s arrival at the repair location. Any delay which might occur due to several categories of work being carried out simultaneously shall be attributed to all categories in proportion to the number of days each category would have required if carried out separately, reckoned from the time the work started.

     

    Clause 18-55. Loss of time after completion of repairs

    After repairs have been completed, the insurer shall only be liable for loss of time: 

    1. until the MOU can resume the activity that it was engaged in under  the contract of employment that was in force at the time of the  casualty, or 
    2. while the MOU moves back to an equidistant position to where it  without the casualty would have commenced the move to its next  location under a contract of employment that was entered into with  binding effect prior to the commencement of the move to the repair location.


    Cl. 18-52 shall apply correspondingly to loss of time after completion of repairs.

     

    Clause 18-56. Repairs carried out after expiry of the insurance period

    The insurer shall not be liable for loss of time resulting from a stay at a repair location that commences more than two years after expiry of the insurance period.

    Loss of time resulting from a stay at a repair location which commences after expiry of the insurance period shall be recoverable in accordance with the rules of Cl. 18-47, even if the daily amount is an agreed amount pursuant to Cl. 18-48, if this results in a lower compensation.

     

    Clause 18-57. Liability of the insurer when the MOU is transferred to a new owner

    When damage to the MOU is repaired in connection with a transfer of ownership, the insurer shall not be liable for time that would in any event have been lost in connection with the said transfer. If the transfer has to be postponed due to repairs covered by this insurance, the insurer shall be liable for the assured’s loss of interest in accordance with the rules of Cl. 5-4, even though the MOU would not have earned income during the postponement.

    The insurer’s liability pursuant to sub-clause 1 shall not exceed the compensation calculated on the basis of the sum insured per day and

    1. the period of time by which the transfer was postponed, or
    2. the time it must be estimated that the buyer will take to repair the  MOU,


    less the agreed deductible period. The deductible period is calculated in consecutive days even if the loss of interest differs from the sum insured per day. No compensation may be claimed under Cl. 18-55 in these cases.

    The assured’s claim against the insurer may not be transferred to a new owner.

     

    Clause 18-58. Relationship to other insurances and general average

    The rules as to subrogation in Cl. 5-13 of the Plan shall apply correspondingly to:

    1. the assured’s right to claim compensation for loss of time and  operating costs during removal to a repair location under Cl. 18-28  or Cl. 18-30 of the Plan, or equivalent provisions in other conditions  applicable to the MOU’s  H&M insurance, and
    2. any right the assured might otherwise have to claim compensation for  the loss from another insurer or in general average
  4. Section 5-6 Chapter 18

    Clause 18-74. Relationship to Section 4 above

    The provisions contained in this Section shall apply in addition to the provisions in Section 4 above.

    Instead of Cl. 18-43, sub-clause 2 (b), the following shall apply: The insurer is liable for loss due to the MOU being wholly or partly deprived of income because it is prevented from leaving a port or a similar limited area.

     

    Clause 18-75. Loss in connection with a call at a visitation port, a temporary stay, etc.

    The insurer is also liable for loss of time caused by a foreign State power for the purpose of:

    1. visitation and search of cargo, etc.
    2. capture and temporary detention.


    If the assured is entitled to compensation for total loss under Cl. 18-69 or Cl. 18-70, he is not entitled to compensation under this Section beyond the first month of the loss of time. If compensation has already been paid, it shall be deducted from the total loss compensation.

     

    Clause 18-76. Loss caused by orders issued by the insurer

    The insurer is also liable for loss of time resulting from orders issued by the insurer, cf. Cl. 18-62. However, this does not apply to orders given by the insurer in connection with the outbreak of war.

    If the assured is entitled to compensation for total loss under Cl. 18-61, Cl. 18-75, sub-clause 2, shall apply correspondingly.


    Clause 18-77. Choice of repairer

    Cl. 18-51 does not apply.