Damage to the vessel

Cl. 16-1 contains another fundamental principle of loss of hire insurance: there is no recovery under the loss of hire insurance unless the vessel has suffered damage recoverable under the Plan. Cl. 16-1 was amended in 2003 so that damage to the vessel covered under the actual hull insurance for the vessel may also trigger cover under the loss of hire insurance, see further under 3.6 below.  Whether the damage is recoverable pursuant to Chapter 12 or in General Average and thus recoverable under the hull insurance via Cl. 4-8, is immaterial.  In both cases, loss of time caused by the damage is recoverable under the loss of hire insurance, see the Commentary to Cl. 16-1. Total loss and constructive total loss are not considered to be damage for this purpose, see Cl. 16-2 and further comments under 4 below.

Even if the damage was in fact not recoverable under the terms of the Plan, the requirement would nevertheless be satisfied if it would have been recoverable but for any agreed deductible. The amount of the deductible is immaterial, which means that the assured is free to agree any deducible he wants with his hull insurer without affecting his cover under the loss of hire insurance. The assured may even increase the "deductible" to 100%, that is to say the vessel may be kept uninsured without affecting the loss of hire insurance.