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P&I (CLASS 3) / PART I / RULE 3
NATURE OF COVER
3.1 Extent of Cover
The cover provided by this Class of the Association is as set out in these Rules and provides insurance for a Member against loss, damage, liability or expense incurred by the Member which arises:
3.1.1 in respect of the Member’s interest in an Entered Ship; and
3.1.2 out of events occurring during the period of entry of the Ship in the Association; and
3.1.3 in connection with the operation of the Ship.
3.2 Conditions
The risks covered as set out in Rule 19 Risks Covered are subject to all the conditions set out in other parts of these Rules and those risks may be varied or supplemented by special terms agreed in writing between a Member and the Managers either under Rule 7 Special Insurances or Rule 19 Risks Covered.
3.3 Contributions
The entry of a Ship in the Association is only valid provided that the Member has paid Contributions as specified in Rule 7 Special Insurances and Rule 11 Calls and as set out in the Certificate of Entry of the Entered Ship or any notice sent to the Member by the Association or the Managers under Rule 33.1 Failure to Pay.
3.4 Sanctions
Notwithstanding and without prejudice to any other provision of these Rules, including Rule 3.2 Conditions, and the provisions of the Articles of Association, these Rules may, on such notice as the Board may in its discretion decide, be amended at any time (including with effect during the course of a Policy Year) to such extent as the Board may in its discretion determine is necessary as a result of the potential or actual implementation of or change in any Sanction, prohibition, restriction, legislation, regulation or requirement to obtain any licence or approval, by any state, international or supranational organisation or other competent authority.
3.5 Insurance Act 2015
The following provisions of the Insurance Act 2015 (the Act) are excluded from these Rules and the contract of insurance:
3.5.1 Section 8
Section 8 of the Act is excluded. As a result any breach of the duty of fair presentation shall entitle the Association to avoid the contract of insurance, regardless of whether the breach of the duty of fair presentation is innocent, deliberate or reckless.
3.5.2 Section 10
Section 10 of the Act is excluded. As a result all warranties in these Rules or any contract of insurance must be strictly complied with and if the Member or any party afforded the benefit of cover by the Association fails to comply with any warranty the Association shall be discharged from liability from the date of the breach, regardless of whether the breach is subsequently remedied.
3.5.3 Section 11
Section 11 of the Act is excluded. As a result the Rules and all terms of the contract of insurance between the Association and the Member or any party afforded the benefit of cover by the Association, including terms which tend to reduce the risk of loss of a particular kind, loss at a particular location and/or loss at a particular time, must be strictly complied with and if the Member or any party afforded the benefit of cover by the Association fails to comply with any such term, the Association’s liability may be excluded, limited or discharged in accordance with these Rules notwithstanding that the breach could not have increased the risk of the loss which actually occurred in the circumstances in which it occurred.
3.5.4 Section 13
Section 13 of the Act is excluded. As a result the Association shall be entitled to exercise its right to terminate the contract of insurance in respect of the Member and any party afforded the benefit of cover by the Association in the event that a fraudulent claim is submitted by or on behalf of the Member or any party afforded the benefit of cover by the Association.
3.5.5 Section 13A
Section 13A of the Act is excluded. As a result the Rules and the contract of insurance between the Association and the Member and any party afforded the benefit of cover by the Association shall not be subject to nor shall the Association or the Managers be in breach of any implied term that they will pay any sums due in respect of a claim within a reasonable time save where the breach is deliberate or reckless and Section 13A of the Act is excluded to this extent.
3.5.6 Section 14
Section 14 of the Act is excluded. As a result the contract of insurance between the Association, the Member and any party afforded the benefit of cover by the Association shall be deemed to be a contract of the utmost good faith, and any breach of the duty of the utmost good faith shall entitle the Association to avoid the contract of insurance.