ADDITIONAL INSURANCES / PART IV / Clause 10

CLASSIFICATION AND CONDITION OF SHIPS

Where cover under these Additional Insurances is afforded in relation to a mutual entry in the Association, this Clause 10 shall continue to apply unless otherwise stated in the Certificate of Insurance; this shall include the interests of both the owner and/or the bareboat charterer, as applicable.  This Clause 10 shall also apply to the interest of a disponent owner where the disponent owner similarly bears a responsibility for adherence to and maintenance of a Chartered Ship’s classification and condition.  However, this Clause 10 is disapplied where cover under these Additional Insurances is afforded in relation to an interest otherwise covered under the Association’s Charterers’ Liability Insurance.

Other references to classification, classification societies and condition of ship in these Additional Insurances Terms & Conditions should be construed accordingly as applicable.

Nevertheless, where this Clause is so disapplied, the Assured should exercise due diligence to ensure that a Ship taken on charter is seaworthy, remains in class and is suitable for its intended employment.

10.1 Classification

The Assured warrants that every Ship in respect of which application for insurance is made is and shall remain throughout the period of insurance fully classed with a classification society approved by the Managers and that throughout such period the Assured will fully and timely comply with all the rules, recommendations and requirements of such society relating to the insured Ship provided always that the Association may in its discretion waive compliance with this warranty for such periods and upon such terms as it thinks fit.

10.2 Change of classification

Any change of classification or classification society shall forthwith be notified to the Managers in writing, together with all outstanding recommendations, requirements or restrictions specified by any classification society as at the date of such change.

10.3 Information from the Assured

Where required by the Managers it is a condition precedent to the Assured’s right of recovery from the Association that the Assured shall first have provided to them an assurance that the insured Ship’s class has been maintained, as well as a list of recommendations, requirements or restrictions specified by any classification society and where any periodic docking survey or any special survey of hull, machinery or equipment is overdue, a statement as to whether or not an extension has been permitted by the classification society. If the Managers so require, such information shall be certified by the classification society.

10.4 Statutory requirements

Every Assured

10.4.1 shall comply with all the statutory requirements of the state of the Ship’s flag relating to the construction, adaptation, condition, fitment, equipment, manning and loading of the insured Ship; and

10.4.2 must at all times maintain the validity of any statutory certificates which are required and issued by or on behalf of the state of the Ship’s flag
provided always that the Association may in its discretion waive compliance with this Clause for such periods and upon such terms as it thinks fit.

10.5 Information from classification society

Should the Association wish to approach the classification society direct for information, the Assured will provide the necessary authorisation.

10.6 Survey before insurance

The Managers may as a condition of insurance of a Ship by the Association require the Assured or prospective Assured to submit the Ship to survey by a surveyor appointed by the Managers.  The Managers in their discretion may require the Assured or prospective Assured to bear the expense of such survey. 

In the light of such survey the Managers may:

10.6.1 refuse the insurance of the Ship; or

10.6.2 refuse the insurance of the Ship until repairs or other action recommended by the surveyor have been carried out to the satisfaction of the Managers within any time limit prescribed by the Managers; or

10.6.3 agree to insure the Ship on such special terms as the Managers may in their discretion decide.

10.7 Ship management appraisal

Without prejudice to any warranties or other duties and obligations imposed on the Assured under the Certificate of Insurance or the general law, the Managers may at any time and from time to time require the Assured to undergo an appraisal of the management systems ashore or on board Ship relating to the operation of Ships managed or operated by the Assured by a surveyor appointed by the Managers on a date and at a place agreed between the Assured and the Managers and within such time limit as may be specified by the Managers.  The Managers may in their discretion require the Assured to bear the expense of such appraisal or they may treat it as an expense reimbursable by the Association under Part I Clause 2 Costs and expenses, Sue and labour.  In the light of such appraisal or in the event of failure by the Assured to undergo such appraisal within the time limit specified by the Managers, the Managers shall have the power, in their discretion to:

10.7.1 terminate the insurance of all Ships insured by the Association forthwith; or

10.7.2 amend, vary or impose special terms on the insurance of that Assured with immediate effect in such manner as they think fit, including the exclusion of all or part of the risks specified in the Certificate of Insurance for such time or period as they may specify provided always that if the Assured does not accept such amendment, variation or condition the Assured shall have the option of cancelling the insurance of the Assured’s Ships forthwith.

10.8 Condition survey

Without prejudice to any warranties or other duties and obligations imposed on the Assured under the Certificate of Insurance or the general law, the Managers may at any time and from time to time require the Assured to submit the insured Ship to survey by a surveyor appointed by the Managers on a date and at a place agreed between the Assured and the Managers and within such time limit as may be specified by the Managers.  The Managers may in their discretion require the Assured to bear the expense of such survey or they may treat it as an expense reimbursable by the Association under Part I Clause 2 Costs and expenses, Sue and labour.

In the light of such survey or in the event of failure by the Assured to submit the insured Ship to such survey within the time limit specified by the Managers, the Managers shall have the power, in their discretion, to:

10.8.1 terminate the insurance of the Ship forthwith; or

10.8.2 amend, vary or impose special terms on the insurance of the Ship with immediate effect in such manner as they think fit, including the exclusion of all or part of the risks specified in the Certificate of Insurance for such time or period as they may specify
provided always that if the Assured does not accept such amendment, variation or condition the Assured shall have the option of terminating the insurance of the Assured’s Ship forthwith.

10.9 Right of adjudication

If any difference or dispute between the Assured and the Managers shall arise concerning the actions taken by the Managers under this Clause 10, the Assured shall have the right to refer the matter to adjudication by the Association under Part VI Clause 21 Disputes and differences.  Pending such adjudication, any such action taken by the Managers shall bind the Assured.

10.10 Obligation of the Assured

Notwithstanding the provisions of this Clause 10 nothing shall relieve the Assured of the Assured’s obligation to keep the Assured’s insured Ship at all times in a proper condition.  Any recommendations or observations of a surveyor acting under any part of this Clause shall be treated as within the actual knowledge of the Assured.  Any failure by the Assured to implement the said recommendations shall entitle the Association in its discretion to refuse, in whole or in part, a claim for recovery from the Association in respect of any incident whatsoever occurring after such recommendations have been made.