Comparison and Comments on the New Hull Form (1/11/02)

Subject Format International Hull Clauses (01/11/02) 3 sections 1) Principal Insuring Conditions 2) Additional Clauses 3) Claims Provisions A move to become plain English. English Law and Practice and exclusive jurisdiction of the English Courts. As determined in the Schedule per MIA. Cover included Cover included with a limit of 5% insured value. Cover in respect of parts on shore limited for 60 days unless prior notice given to extend period Institute Time clauses Hulls 1/10/83 One clause, no claims handling provisions other than notification and tender provisions. CODEX 2001 Booklet in plain English Format. Two general sections and then individual sections for hull, IV, war and LOH. English Law and Practice. Full description of ship insured defined within wording. Cover included Cover included provided equipment replaced before Ship sails. Comments Dex tailors its claim handling provisions to suit the need of the Insured.

Law and Jurisdiction Subject matter covered Leased Equipment Equipment whilst temporarily ashore

English Law and Practice. As determined in the Schedule per MIA. Not included Not included

Subject Perils Insured Additional Perils Cover

Continuation Provision

International Hull Clauses (01/11/02) Named perils as per ITC 1/10/83 but extended to contact with satellites. Can be included, but only by agreement with underwriter. Cover for loss or damage caused by a latent defect is only to the extent that the costs exceed those that would have been incurred had the defect been discovered and corrected at the inception of the policy. Cover only continues whist at sea/missing or in port and in distress.

Institute Time clauses Hulls 1/10/83 Named perils Not included

CODEX 2001 All risks Included

Comments

The provision relating to want of due diligence by Superintendents and onshore management that was applied in the ITC 95 clauses has been removed from the New Hull Form.

Termination Provisions

Cover only continues Cover continues whilst at sea or at a port of refuge or whist at sea and in distress or missing or in port and in in distress. distress. Automatic termination on Automatic termination on Automatic termination on change of ownership, flag, change of ownership, flag, change of ownership, flag, management, classification management, classification management, classification society, charter or society, charter or society (or failure to requisition. requisition. comply with class recommendations relating to seaworthiness), failure to have ISM documentation in place, charter or requisition or when the vessel sails on break-up voyage.

Subject Collision Liability Contact with Fixed and Floating Objects Legal costs associated with collisions CTL Unrepaired Damage

International Hull Clauses (01/11/02) Standard cover ths. Can be extended to 4/4ths. Can be included, but only by agreement with underwriter Paid in addition to the hull value subject to limit of 25% value Based on 80% of insured value Reasonable depreciation in the market value at the time the insurance terminates but not exceeding the reasonable cost of repairs.

Institute Time clauses Hulls 1/10/83 Cover for ths Not included Legal costs included within the hull value limit for collision claims Based on 100% of insured value Reasonable depreciation in the market value at the time the insurance terminates but not exceeding the reasonable cost of repairs.

CODEX 2001 Cover for 4/4ths Cover included automatically No stipulation as to limit for legal costs following collision. Based on 80% of insured value Reasonable depreciation in the market value at the time the insurance terminates but not exceeding the reasonable cost of repairs. Codex allows the Insured to present their unrepaired damage claim prior to expiry of the policy.

Comments

Important to ensure that the ship is insured for correct value

Subject Deductibles

GA contributions

General Average Absorption Clause

International Hull Clauses (01/11/02) Deductible applies to PA, sue and labour expenses, General Average and Salvage claims. Possible Additional Machinery Damage deductible. No deductible for total loss. Provision for one deductible for heavy weather during one voyage and one deductible for ranging/contact damage during single cargo operations Paid provided that the contributory value does not exceed the insured value. Otherwise paid pro-rata. Deductible is applied to GA Can be included but only by express written agreement from the underwriters.

Institute Time clauses Hulls 1/10/83 Deductible applies to PA, sue and labour expenses, General Average and Salvage claims No deductible for total loss. Provision for one deductible for heavy weather during one voyage.

CODEX 2001 No deductible for costs involved with sue and labour expenses, nor for G.A. and Salvage and total loss. Provision for one deductible for heavy weather or ice damage during one voyage. One deductible during single cargo operations

Comments

Paid provided that the contributory value does not exceed the insured value. Otherwise paid pro-rata. Deductible is applied to GA. Not included

Paid in full even if contributory value exceeds insured value. No deductible. Included as standard

Subject Trading Limitations

Bottom Treatment Disbursements Warranty

International Hull Clauses (01/11/02) No longer a warranty but restrictions apply in line with the Institute Trading Warranties.. Underwriters are not liable for costs whilst the vessel is in breach unless they have received prior notices and any additional premium required by them is agreed. Included in respect of damaged area only Allows owner to insure up to 25% of the hull value

Institute Time clauses Hulls 1/10/83 Subject to Institute Trading Warranties Any breach renders the policy void.

CODEX 2001 No trading warranties worldwide without restriction.

Comments

Included in respect of damaged area only Allows owner to insure up to 25% of the hull value

Included in respect of damaged area only Standard allowance of 25% but figure is negotiable.

Subject Classification / ISM

International Hull Clauses (01/11/02) Automatic termination for failure; 1) to maintain Class; 2) to comply fully with Class requirements affecting seaworthiness; 3) to have in place full ISM documentation

Institute Time clauses Hulls 1/10/83 No standard Class requirement although often added by a stand-alone clause, which is often a warranty.

CODEX 2001 Any change of Classification Society not previously agreed to by the Insurers automatically terminates cover. Insureds duty to comply with flag state regulations and to maintain the ship in Class and comply with periodic surveys and other Class requirements, is subject to the discretion of the Advisory Council Given for lay-ups (not under repair) at pre-agreed percentage but for each period in excess of 5 days subject to annual franchise of 5% of the annual premium per ship. Within 30 days of inception or as otherwise agreed.

Comments

Returns of Premium

Given for lay-ups for each Given for lay-ups at preperiod of 30 consecutive agreed percentage but for days. each period of 30 consecutive days not under repair. Within 45 days of inception or as otherwise agreed. No provisions.

Premium Payment Provisions

Subject Notice of Claim

Tender Provision

International Hull Clauses (01/11/02) Failure to give notice within 180 days of Assured / Owners / Managers becoming aware of any accident or occurrence means claim not recoverable. Leader can decide where the vessel is repaired and can veto a repairer. Deduction of 15% from net claim if Insured fails to comply.

Institute Time clauses Hulls 1/10/83 Notice of loss required prior survey.

CODEX 2001 Prompt notice of loss required

Comments

Leader can decide where the vessel is repaired and can veto a repairer. Deduction of 15% from net claim if Insured fails to comply. An allowance of 30% given for delays whilst tenders obtained.

Owner given the right to choose yard with proviso that excess costs borne by Insured. 25% allowance for delays whilst tenders obtained.

Subject Bail Clause

Claims Leader Provision

International Hull Institute Time clauses Clauses (01/11/02) Hulls 1/10/83 No bail provision. Underwriters shall give due consideration to assisting the Assured by providing security / counter security on behalf of the Assured in a form to be determined by the Leading Underwriter. This is subject to: 1) amount of security not exceeding insured value of vessel; 2) acceptable counter guarantee being provided by the Assured; 3) agreement of mortgages or other party with an interest 4) payment to underwriters of the deductible amount if required. No provision Authority given to leader to bind co-insurers for instruction of experts, provision of bail and settlement of claims.

CODEX 2001 Bail clause included and can issue security within 24hours where suitable counter security / relevant documents already in place and premium is up to date.

Comments

Authority given to leader to bind co-insurers for instruction of experts, provision of bail and settlement of claims.

Subject Duties of the Underwriter (in relation to claims)

Claims Collection fees

Loss payee provisions

Claims Payments

International Hull Clauses (01/11/02) The lead underwriter may, at their sole discretion, instruct a surveyor who will report to the lead underwriter and subject to no conflict of interest, release without delay the report to the assured / average adjuster. Leader may also instruct other experts, average adjuster, lawyer etc Allows 5% to be charged by a third party collecting experts fees on leaders behalf Claims payable to named loss payee deemed a complete discharge to underwriters of their liability. Will be paid within 28 days of fully documented claim

Institute Time clauses Hulls 1/10/83 No claims duties stated

CODEX 2001 Under Codex, Insurers will agree with the Insured at inception, a network of international surveyors and report will be issued to both underwriter and assured simultaneously. Dex will agree the appointed adjusters, lawyers and other experts with the Insured at inception. Costs and expenses may be collected from coinsurers. Claims payable to named loss payee deemed a complete discharge to underwriters of their liability. Once claim approved, funds are available to be paid.

Comments

No provision

No provision subject to MIA.

No provision

Subject Recoveries Dispute Resolution

International Hull Clauses (01/11/02) Shared between Insurers and Insured in proportion to their respective losses. Allows for either Assured or Underwriter to refer claim (if not agreed by negotiation) to mediation / ADR in accordance with current CEDR Solve procedures.

Institute Time clauses Hulls 1/10/83 Underwriters take first proceeds of any recovery. No provision

CODEX 2001 Shared between Insurers and Insured in proportion to their respective losses. Under Codex, the Insured is entitled to refer certain claims to the Advisory Council (panel of Shipowners and current Chairman of AAA) for consideration and their decision shall be final and binding on Insurer. Equally, if claim negotiations fail, the Insured is entitled to refer the dispute to Mediation (in accordance with current CEDR procedures) or Arbitration in London

Comments