Cl. 15-18. Loss caused by orders issued by the insurer

Cl. 15-18 reads as follows:

The insurer is also liable for loss of time resulting from orders issued by the insurer, cf. Cl. 15-4.  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. 15-13, Cl. 15‑17, sub-clause 2, shall apply correspondingly." (The English version of the Plan contains a misprint as sub-clause 2 refers to Cl. 15-3 rather than Cl. 15-13.)

According to Cl. 15-4, the war risk insurer is entitled to give orders as to how and where to operate the vessel in order to reduce the risk of damage to or loss of the vessel. If such orders cause the assured to suffer a loss of income, he is entitled to be compensated for this by the insurer. Such order may be to stay in port until further orders are given by the insurer. If the vessel is kept in port without income for more than six months, the assured is entitled to total loss compensation pursuant to Cl. 15-13. In such a case, the loss of hire compensation shall be reduced to only one month, see above under 16.2.

It is clear that there is little or no point for the loss of hire insurer to invoke Cl. 15-18 if he does not also cover the war risk hull insurance. It is difficult to see any benefit for a loss of hire insurer in giving any orders aiming at preventing a loss of hire claim, if he must compensate the assured's loss of time resulting from following such orders.  By keeping the vessel in port he may theoretically avoid paying for loss of hire during repairs if the vessel is damaged during sailing. The latter payment may be higher than the payment for the detention in port, but this is a very speculative calculation which would probably be avoided by most insurers.