International Hull Clauses 1/11/2002
Agenda Overview Main Points Simon Beale Peter McIntosh Questions & Answers David Taylor (Permanent Secretary to JHC) Peter McIntosh (Wellington) Simon Beale (Amlin) Tim Taylor (Hill Taylor Dickinson) Tony Kersey (Royal Sun Alliance)
Overview Simon Beale
Clauses Initiative Aims Process Result
Aims ITC 1.10.83, ITC 1.11.95 Intentions - usability, clarity and removal of uncertainty Embrace current market practice Addendum Changing world ISM compliance mandatory Greater benefit to the shipping & insurance industry Not a fundamental rewrite Promotion of London Market
JHC Wordings Initiative Structure Steering Group S Beale, P McIntosh, W Beveridge, K Golson, D Davies, T Taylor Communication S Beale, D Taylor Technical P McIntosh, T Taylor, S Beale, R Konig Liaison: Brokers Average Adjuster Lawyers Press ITC WORDINGS ADDENDUM CLAIMS HANDLING Communication: Shipowners Forums; Asia Greece Other Markets; US France Japan P Jaffe M Edmondson S Milton R Tomlin S Stonehouse A Ramage M Harvey T Kersey I Treacy Hill Taylor Dickinson Tim Taylor, Patrick Foss, Chris Zavos
Process 1 st Consultation Draft July 17 th 650+ comments from all sectors of maritime industry 2 nd Consultation Draft October 4 th 400+ comments returned Launch 31.10.02
Result Broad brush approach but key points negotiable Not all risks Supports ISM, Flag States & IACS Avoids use of warranties where possible Specific topic review ;Trading Limits, Salvage, Sue & Labour Ongoing Review - June 2003
Peter McIntosh Main Points Restructuring New Emphasis Key Changes
Main Points Formation of 3 integrated yet distinct parts: Part1 - Principal Insuring Conditions Part 2 - Additional Clauses Part 3 - Claims Provisions
Restructuring of clauses More logical order Perils now up front Clearer language Latent defect cover clarified Inclusion of frequently used clauses
New Emphasis Move away from warranties Clearer explanation of consequences Coverage changes New optional clauses More clarity on duties New undertakings on claims
Part 1 - Cover (Cl.2) Superintendents / onshore management deleted Latent defect cover amended
Latent Defect Cl. 2.2.2 Damage paid IF Damage + Defect > Defect Damage Defect
Part 1 - Cover (Cl.3-6) Leased equipment as standard Parts taken off as standard Collision legal costs limitation
Part 1 - General Average (Cl.8) General Average extended to cover» for Article 13 para 1(b) salvage awards under International Convention on Salvage 1989» and expenditure allowable under Rule XI (d) of York-Antwerp Rules 1994
Part 1 - Navigation(Cl.10-12) Navigation provisions no longer warranties» no cover for loss during period of breach» held covered provision still given» continuation still for vessels in distress
Part 1 - Management (Cl.13) Class & ISM clause now standard Automatic termination for failure to» maintain class» comply with Class seaworthiness requirements» failure to have in force valid ISM certificates
Part 1 - Management (Cl.14) Automatic termination for» change of flag, management etc» sailing for break-up No cover for loss attributable to breach of duty to comply with» Flag state requirements» Class reporting requirements
Part 1 - Deductible (Cl.15) Additional machinery deductible included if agreed at inception
Part 1- General (Cl.16-33) 80 % Constructive Total Loss (Cl. 21) Cancelling Returns Only (Cl.25) Separate insurances (Cl.26) Several liability (Cl.27) Affiliated companies (Cl.28) Revised RACE & Chem Bio (Cl. 32&33)
Part 2 - Additional Clauses Navigating limits (not warranties) Bering Sea Transit Recommissioning clause Helicopter Engagement Premium Payment - LSW 3000
Part 2 - Optional Extensions Options to include extended cover for» 4/4ths collision liability» Fixed & Floating Objects» Lay-Up returns» General Average Absorption clause» Additional Perils
Part 3 - Claims Provisions Leading underwriter clause (Cl.45)» Leader has authority to bind co-insurers» Clearer communication» Fee collection charge introduced Notice of claims within 180 days of assured becoming aware (Cl.46)
Part 3 - Claims Provisions Commonly accepted duties of Assured now set out (Cl.48) No liability for misleading or deceptive conduct Underwriters duties (Cl.49) in relation to» surveyors and confirmation of average adjusters» underwriters pay reasonable fees
Part 3 - Claims Provisions 28 day decision on claim Discretionary provision of security (Cl. 50) Co-operation in respect of recoveries (Cl 52)» Pro-rata recoveries Alternative Dispute Resolution option
Matrix For use with IHC 01/11/2002 Pro-forma quick reference Complements placement
General Review starting in 6 months of at least» Salvage» Sue & Labour» General Average» Navigation limits Annual review thereafter
General ITC 01/10/83 & 01/11/95 still available English Law & Jurisdiction Related wordings
International Hull Clauses 1/11/2002