There are several exceptions from cover under the Plan that may be relevant to the hull cover. The wording of Cl. 16-1 suggests that any and all of these exceptions would be relevant also in relation to the loss of hire insurance, but the Commentary to Cl. 16-1 clearly suggests that it is the objective exceptions from the hull cover contained in Chapters 10 and 12 that are relevant. This means that, if the hull insurer is entitled to refuse cover under the hull insurance on the basis of the exceptions contained in Chapter 3 of the Plan, it is necessary to evaluate separately and independently whether the same exceptions apply also in relation to the loss of hire insurance. In many instances, the exceptions will apply equally to both types of insurance. If the vessel is deemed in a poor condition in violation of applicable safety regulations in relation to the hull insurance so that Cl. 3-22 et. seq. is applicable, this will normally also apply in relation to the loss of hire insurance.
In relation to the duty of disclosure, Cl. 3-1, it is possible that the assured may be in breach of his duty in relation to his hull insurer while full disclosure was made to the loss of hire insurer. The fact that the assured may not recover from his hull insurer because of non-disclosure is completely irrelevant for the loss of hire insurer who has been provided with all relevant information. The same goes for change of class, see Cl. 3-8, sub-clause 2. The assured may have remembered to inform his hull insurer about a change of class, while he forgot to inform his loss of hire insurer. Even if the damage is covered under the hull insurance, the loss of hire insurer is entitled to reject the claim if the condition for denying the claim pursuant Cl. 3-8, cf. Cl. 3-9 is satisfied, for instance if the loss of hire insurer is able to substantiate that he would not have accepted the insurance in the first place, if he had known that the assured would change class.
Breach of the warranty of class contained in Cl. 3-14 would normally be equally relevant to both groups of insurers but, in the unlikely event that the hull insurer for one reason or another has accepted to continue the hull insurance in spite of the fact that the class is lost or suspended, does not deprive the loss of hire insurer from invoking the class warranty in order to deny any claim under the loss of hire insurance.
These examples illustrate that these two types of insurances must be treated separately in many respects, even if they are linked together by virtue of Cl. 16-1.
The loss of hire insurer is not bound to accept or be guided by any settlement which might have been reached between the assured and the hull insurer. The loss of hire insurer will only be responsible to the extent that the loss of hire was caused by a physical damage which would have been recoverable under the Plan, regardless of whether any settlement was reached with the hull insurer. Any decision with respect to the loss of hire insurance issue, even if it rejects the basis for the hull settlement, will of course not affect the hull settlement per se, since the hull insurer is not party to the dispute between the loss of hire insurer and the assured.
The most important provisions of Chapter 10 are Clauses 10-1 (objects insured), 10-2 (objects temporarily removed from the ship) and 10-3 (damage due to ordinary use). Loss of hire resulting from physical damage which is not covered under the hull policy is not recoverable. The same applies for loss of hire resulting from physical damage caused by ordinary use of the vessel (e.g. loss of time during repairs of the cargo holds which have been damaged by normal use of the grabs during discharge operations).
The most important exceptions from hull cover in Chapter 12 are the exceptions in Clauses 12-3 (inadequate maintenance, etc.), and 12-4 (error in design of parts not approved by the class). These exceptions will not be dealt with here, other than to note that loss of time during repairs of damage to the hull and/or machinery due to lack of maintenance etc. is not recoverable under the loss of hire insurance. For a detailed discussion of these exceptions, see the Commentary to Cl. 12-3 to Cl. 12-5 and Brækhus and Rein: Kaskoboken, pages 86-108, on the similar, but not identical provisions of the 1964 Plan, Clauses 175 and 176 (m), and Wilhelmsen and Bull, Handbook in Hull Insurance, chapter 10.5.