The provision concerns all objects insured under the catch and equipment insurance, i.e. both the catch and the accessories, cf. the introductory words of the provision.
Sub-clause 1 defines when a total loss has occurred, and is taken from the Norwegian Cargo Clauses Cl. 35, sub-clause 1. Under sub-clause (a), a total loss has occurred if the objects insured have been destroyed. The objects have been “destroyed” where they are totally burnt up, dissolved, evaporated or have leaked out, or where they are in some other way physically totally destroyed. In principle, all objects insured, including the entire catch, must be affected in order for it to constitute a total loss. The rules relating to loss in weight, cf. Cl. 17-25, however, make sub-clause 1 of Cl. 17-24 similarly applicable where part of the objects insured/catch are totally lost. The condemnation rules in sub-clauses (c) and (d) do not call for a more precise definition of the term “destroyed”. On the other hand, the distinction between condemnation and partial damage may be difficult to make. Reference is made to the Commentary on Cl. 17-26.
Under sub-clause 1 (b) a total loss has also occurred where the objects insured (including the catch) “have been removed from the assured without any possibility of his recovering them”. The objects have been “removed from” the assured if he does not have physical disposal of them. They have sunk, been washed overboard, stolen, impounded or handed over to a wrongful recipient. There is, however, no requirement that the objects shall be physically damaged or impaired. The actual removal must be complete. The objects must have been removed from the assured “without any possibility of his recovering them”.
If the objects have disappeared without there being any basis or information to indicate how this happened, the assured has the burden of proving that the total loss was caused by a peril covered by the insurance.
Rules relating to condemnation are contained in sub-clause 1 (c) and (d). The provision in (c) sets the condemnation limit at 100% for fishing gear and accessories. For other objects, however, the condemnation limit is 90% in line with the solution in the Norwegian Cargo Clauses § 35, sub-clause 1, no. 4. The reason for the difference is that catch, packaging and supplies may be considered equivalent to goods, while the insurance of fishing gear is more similar to an ordinary property insurance.
The condemnation rules apply when the objects insured are so extensively damaged that at least 100% or 90% of their value must be considered lost. When deciding whether the objects are condemnable, damage must be assessed under Cl. 17-25 and Cl. 17-26 and be seen in relation to the insurable value. In the assessment, only loss of value resulting from damage covered by the insurance shall be taken into account. If several insured incidents occurred during the transport, it is the aggregate damage which must have resulted in a loss of value of 100% or 90% respectively.
Sub-clause 2 regulates the further content of a total-loss settlement. The provision corresponds to the Norwegian Cargo Clauses § 35, sub-clause 2. In the conditions for fishing insurance there was no such rule. The fundamental principle is that the assured is entitled to payment of the sum insured for the object insured, limited, however, to its insurable value, cf. first sentence.
If the objects, before becoming a total loss, sustain damage, it follows from the second sentence that no deduction shall be made for such damage in the total-loss claim. It is, however, a condition that the damage occurred during the insurance period. For pre-existing damage prior to the inception of the insurance, deductions shall be made, given that such damage will reduce the insurable value of the object correspondingly.
Cefor - The Nordic Association of Marine Insurers