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1. HULL AND MACHINERY INSURANCE

1. THIS COVERS THE SHIP ITSELF, MACHINERY AND EQUIPMENTS.
2. LOSS OF TIME FOLLOWING THE DAMAGE TO THE SHIP IS COVERED UNDER LOSS OF HIRE INSURANCE.
3. FURTHERMORE, THE INSURANCE COVERS SOME LIABILITIES, NORMALLY COLLISION LIABILITIES WITH ANOTHER SHIP KNOWN AS “RUNNING DOWN CLAUSE”.
4. AND IT ALSO COVER LIABILITIES FOR COLLISION WITH OTHER OBJECTS THAN ANOTHER SHIP ALSO KNOWN AS “FIXED AND FLOATING OBJECTS”.
5. THIRD PARTY OF THE INSURANCE IS COVER FOR SALVAGE AND GENERAL AVERAGE CONTRIBUTION.

TYPICAL H&M CLAIMS INCLUDE:

1. TOTAL LOSS OF SHIP.
2. DAMAGE TO SHIP, ENGINE AND EQUIPMENT.
3. EXPLOSION AND FIRES.
4. GROUNDING- DAMAGE TO THE SHIP, SALVAGE OF THE SHIP AND POSSIBLE CONTRIBUTION IN GENERAL AVERAGE.
5. COLLISION- DAMAGE TO THE SHIP AND TO OTHER SHIP.
6. STRIKING OTHER OBJECT- DAMAGE TO OWN SHIP AND LIABILITIES TO OTHER OBJECT OWNER.

NOTE:

1. H&M COVER INCLUDE “TRADING WARRANTY” CLAUSE STIPULATING WHERE THE VESSEL MAY TRADE. IT IS IMPORTANT TO CHECK THESE TRADING LIMITS AS A BREACH MAY JEOPARDISE THE COVER. LIFE SAVING IS NORMALLY ACCEPTED EVEN IF TRADING LIMITS IS BREACHED.
2. INSURER WILL BE PAID ONCE THE DAMAGE HAS BEEN SURVEYED AND TENDERS FROM REPAIR YARDS IS SUMMITED.
3. DEDUCTABLES SHOULD BE PAID BY THE SHIP OWNER BEFORE THE CLAIM AGAINST THE POLICY.

LOSS OF HIRE:

1. TO PROTECT A LOSS OF A CHARTER HIRE OR FRIGHT INCOME.
2. THIS COVER MAY INCLUDE SLOW STEAMING AS RESULT OF A PHYSICAL DAMAGE TO THE SHIP.
3. THIS COVER ALSO INCLUDE TIME LOST DUE TO DEVIATION TO A REPAIR YARD.
4. CORRECT AND ACCURATE LOG ENTRIES ARE THEREFORE IMPORTANT IN SUCH SITUATIONS.

COLLISION LIABILITY CLAUSE

1. THIS INSURANCE ALSO COVERS 3/4^TH OF THE LIABILITIES INCURRED BY THE ASSURER AS A CONSEQUENCE OF THE INSURED VESSEL COMING INTO COLLISION WITH ANOTHER VESSEL, IN RESPECT OF:                                                                                      A) LOSS OF OR DAMAGE TO ANY OTHER VESSEL OR PROPERTY ON ANY OTHER VESSEL. B) DELAY TO OR LOSS OF USE OF ANY SUCH OTHER VESSEL OR PROPERTY. C) EXPENSES OF ANY SUCH OTHER VESSEL OR PROPERTY THEREON IN RESPECT OF GENERAL AVERAGE OR SALVAGE. PROVIDED THAT SUCH COLLISION WAS NOT CAUSED BY A PERIL EXCLUDED IN THE LIST.

• HOWEVER, THIS CLAUSE DOESNOT COVER ANY LIABILITIES IN RESPECT OF:                                                             A) LOSS OF LIFE, PERSONAL INJURY. B) CARGO OR OTHER PROPERTY ON THE INSURED VESSEL. C) CONTRACTUAL ENGAGEMENT OF THE INSURED VESSEL. D) POLLUTION OF ANY PROPERTY OR THING WHATSOEVER (INCLUDING COST OF PREVENTIVE MEASURES AND CLEAN UP OPERATIONS), EXCEPT OF OTHER VESSELS WITH WHICH THE INSURED VESSEL IS IN COLLISION OR PROPERTY ON SUCH OTHER VESSEL. E) REMOVAL OF OBSTRUCTION, WRECK, CARGO OR ANY OTHER THING WHATSOEVER.

      3. THE AMOUNT PAYABLE UNDER THIS CLAUSE IS IN ADDITION TO ANY AMOUNT PAYABLE UNDER THE OTHER PROVISIONS OF THIS INSURANCE, BUT SHALL NOT, UNLESS OTHERWISE EXPRESSLY AGREED, EXCEED ¾ OF THE AMOUNT EQUAL TO THE SUM INSURED IN RESPECT OF EACH SEPEARATE OCCURANCE.

4. IN THE EVENT OF A COLLISION OF THE INSURED VESSEL WITH ANOTHER VESSEL WHOLLY OR PARTIALLY OWNED BY THE ASSURED, THE INSURER SHALL BE LIABLE UNDER THIS CLAUSE AS IF THE OTHER VESSEL WERE OWNED BY A THIRD PARTY. IN SUCH, THE DETERMINATION OF LIABILITIES AND THE ASSESSMENT OF DAMAGES SHALL BE MADE BY A SOLE ARBITRATOR AGREED BY THE INSURER AND THE ASSURED.

5. WHERE THE INSURED VESSEL IS IN COLLISION WITH ANOTHER VESSEL AND BOTH VESSEL ARE TO BLAME, THEN UNLESS THE LIABILITY OF ONE OR BOTH VESSELS BECOME LIMITED BY LAW, THE INDEMNITY UNDER THIS CLAUSE SHALL BE CALCULATED ON THE PRINCIPLE OF CROSS-LIABILITIES AS IF THE RESPECTIVE OWNERS HAD BEEN COMPELLED TO PAY TO EACH OTHER SUCH PROPORTION OF EACH OTHER’S DAMAGES AS MAY HAVE BEEN PROPERLY ALLOWED IN ASCERTAINING THE BALANCE OR SUM PAYABLE BY OR TO THE ASSURED IN CONSEQUENCE OF THE COLLISION. THE LIABILITIES IS CALCULATED AND THEN THE SETLEMENT IS MADE.

                                                                      OR

WHERE THE ASSURED HAS INCURRED A LIABILITY COVERED BY THIS CLAUSE AND HE CAN CLAIM DAMAGES THE INJURED PARTY FOR LOSS WHICH HE HIMSELF HAS SUFFERED ON THE SAME OCCASION, THE SETTLEMENT OF THE CLAIM, AS BETWEEN THE ASSURED AND THE INSURER, IS TO BE EFFECTED ON THE BASIS OF THE CALCULATED GROSS LIABILITIES BEFORE ANY SET-OFF HAS BEEN MADE.

6. THE INSURER WILL ALSO PAY 3/4^TH OF THE AMOUNT OF THE LEGAL COSTS INCURED BY OR AWARDED AGAINST THE ASSURED, IF IT IS WRITTEN IN THE CLAUSE.

7. IF THE ASSURER ASK FOR A GUARANTEE BY THE INSURER TO HELP HIM RELEASE THE VESSEL THEN THE COUNTER GUARANTEE SHOULD BE RESTRICTED TO HIS PROPORTION OF THE INSURANCE.

GENERAL AVERAGE AND SALVAGE CLAUSE

1. THIS INSURANCE ALSO COVER INSURED VESSEL PROPORTION OF GENERAL AVERAGE AND SALVAGE CHARGES.
2. HE CAN RECOVER THIS AMOUNT WITHOUT FIRST ENFORCING HIS RIGHT OF CONTRIBUTION FROM OTHER PARTIES.
3. THIS CLAUSE THE VOYAGE (BALLAST VOYAGE) IS DEEMED TO CONTINUE FROM PORT OF DEPARTURE UNTIL ARRIVAL OF THE VESSEL AT THE FIRST PORT OTHER THAN PORT OF REFUGE OR PORT OF CALL OF BUNKERING.
4. IF ALL THE CONTRIBUTING INTERESTS ARE OWNED BY THE ASSURER THEN THE YORK-ANTWERP RULE WILL BE APPLICABLE AND SHALL BE APPLIED AS IF THE INTERESTS WERE OWNED BY DIFFERENT PERSONS AND THE INSURER SHALL PAY THE VESSEL’S PROPORTION AS SO CALCULATED.
5. IN CASE THE SALVAGING VESSEL IS WHOLLY OR PARTIALLY OWNED BY THE ASSURED THEN THE SALVAGING VESSEL WILL BE TAKEN AS A THIRD-PARTY VESSEL.
6. IN CASE OF AN UNSUCCESSFUL ATTEMPT TO SAVE THE VESSEL HAS BEEN MADE, THEN THIS AMOUNT WHICH IS USED TO SAVE THE VESSEL WILL BE INCURED FROM INSURER ALONG WITH THE TOTAL LOSS.
7. NO CLAIM UNDER THIS WILL BE ALLOWED UNLESS GENERAL AVEARGE ACT OR SALVAGE WAS UNDERTAKEN TO AVOID, OR IN CONNECTION WITH THE AVOIDANCE OF, A PERIL INSURED AGAINST.

SUE AND LABOUR CLAUSE

THIS CLAUSE STATES THAT THE INSURER WILL PAY THE ASSURER THE AMOUNT THAT HE INCURRED ON MINIMIZING THE LOSS WHICH THE VESSEL WOULD HAVE BEARED IN CASE OF LOSS OR DAMAGE FROM A PERIL INSURERED AGAINST. THIS CLAUSE SHALL NOT APLLY TO GENERAL AVERAGE, SALVAGE OR EXPENDITURE OTHERWISE PROVIDED FOR IN THIS INSURANCE.

      THE LIABILITY UNDER THIS CLAUSE IS IN ADDITION TO HIS OTHER LIABILITIES UNDER THIS INSUANCE. THIS AMOUNT CAN BE UPTO TWICE THE AMOUNT OF THE SUM ASSURED.

DEDUCTIBLE

 The insurers require the Assured to bear a given portion of the risk EXCEPT in cases of total loss and where the Assured incurs expense endeavouring to reduce or prevent loss. The portion of risk required to be borne by the Assured is known as the deductibles and it is written into the policy. The Deductible is required for two reasons: firstly , it prevents the underwriters from being presented with number of small claims which are as expensive to process as large claims and secondly , The Assured is assumed to be more careful when he has to bear some part of every loss.

2. CARGO INSURANCE:

THIS INSURANCE IS TAKEN BY THE CARGO OWNER AGAINST LOSS OF OR DAMAGE TO CARGO FOR A DECLARE VALUE. THE CARGO INSURER WILL COMPENSATE THE OWNER OF THE CARGO FOR ANY LOSS OR DAMAGE TO THE CARGO. THEREAFTER THEY MAY CLAIM COMPENSATION FOR THEIR LOSS FROM THE CARRIERS OF THE CARGO.

3. FREIGHT INSURANCE:

THIS IS TO INDEMNIFY THE POLICY HOLDER IN CASE OF LOSS OF FREIGHT IF THE SHIP OWNER IS NOT ABLE TO COMPLETE HIS CONTRACT OF CARRIAGE BECAUSE OF UNAVOIDABLE PERIL.