Commentary

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Section 6-3: Supplementary covers

  • Clause 18-94. Applicable rules

    Sub-clause 1 expressly provides that Sections 6-1 and 6-2 shall apply also to any supplementary covers agreed according to Cl. 18-95 to Cl. 18-99 unless otherwise provided in Section 6-3. As explained in the introductory overview of the Commentary to Chapter 18, Section 1 applies to all sections of Chapter 18 including Section 6. Thus Part One of the Plan also applies to Section 6-3 unless deviated from in Section 1.

    Sub-clause 2 states what ought to be obvious, namely that none of the supplementary covers apply unless the parties have agreed a separate sum insured, deductible and premium for each supplementary cover. 

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    Clause 18-94. Applicable rules

    If supplementary cover has been agreed according to Cl. 18-95 to Cl. 18-99, the rules in Sections 6-1 and 6-2 shall apply unless otherwise provided in Section 6-3. Coverage in respect of each of the interests insured hereunder is conditional upon the parties having agreed separate sum insured,...

  • Clause 18-95. Additional costs arising from unsuccessful launching

    This Clause corresponds to Cl. 19-18, and reference is made to the Commentary to Cl. 19-18. However, the wording of Cl. 18-95 states that “the insurer will indemnify the assured’s liability for any additional costs incurred to complete launching”. The cover is therefore limited to additional costs of repair etc. necessary to complete the launching, and does not comprise any and all costs in connection with the damage to the dock, slip way, cranes and/or other property caused by the unsuccessful launching.

    The assured who carries the risk for successful launching is under his contractnormally liable to complete the launching. If it is sufficient to carry out minor or temporary repairs to the dock or other facilities used for launching in order to complete the launching, the cover under this Clause is limited to such cost. Any costs in excess of this in order to repair such facilities are not covered by the construction risks insurance, but may be covered under the assured’s or co-insured facility owner’s property insurance. Alternatively, it will be for their own retention in the absence of such insurance cover.

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    Clause 18-95. Additional costs arising from unsuccessful launching

    In the event of an unsuccessful launching of the MOU, the insurer will indemnify the assured’s liability for any additional costs incurred to complete launching.

  • Clause 18-96. Costs of removal of wreck and debris

    This Clause was new in 2016. It provides cover for the assured’s legal or contractual liability for the costs of removal of wreckage or debris of property insured under this Section which is lost as a result of a casualty. Compared with the cover under Cl. 19-19, which covers “necessary removal of wrecks”, Cl. 18-96 covers “the assured’s liability for costs of removal of wreck and debris”. The cover under Cl. 18-96 is both narrower and wider than the cover under Cl. 19-19.

    It is narrower in the sense that it does not cover removal costs that is only necessary in order to clear the assured’s own property, but for which the assured has no liability towards any third party. In the same way as presupposed in Cl. 18-95, the assured may have a liability towards his contracting party to complete the Project. If removal of wreck and debris is necessary in order to comply with contract obligations to complete the Project, then there is a liability covered under Cl. 18-96. The same will apply if the assured is obliged to remove wreck and debris in order to complete other projects or contracts entered into. But if the wreck or debris removal is only necessary to be able to enter into new contracts, there will be no legal liability involved but certainly a commercial need to incur the costs in order to continue the business. The latter would have been covered under Cl. 19-19 as expressly explained in the Commentary to this Clause. 

    Cl. 18-96 is on the other hand wider than the cover under Cl. 19-19 in the sense that liability towards third parties to remove the wreck and debris will be comprised by Cl. 18-96. The Commentary to Cl. 19-19 mention as an example a situation where the wreck and debris causes obstruction to traffic. Any liability to remove the wreck and debris will be covered under Cl. 18-96, while such third party wreck removal liability falls outside the scope of cover under Cl. 19-19. Such liability is expressly covered if imposed by authorities under Cl. 19-20, but is not comprised by Cl. 18-98.

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    Clause 18-96. Costs of removal of wreck and debris

    The insurer will indemnify the assured’s liability for costs of removal of wreck and debris of the MOU or parts thereof following a loss covered under Section 6-2.

  • Clause 18-97. Liability of the assured arising from collision or striking

    This Clause makes it expressly clear that Section 2-4 shall apply correspondingly and reference is made to the Commentary to Clauses 18-35 to 18-38.

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    Clause 18-97. Liability of the assured arising from collision or striking

    Section 2-4 shall apply correspondingly.

  • Clause 18-98. Liability insurance

    Clause 18-98 is verbatim identical with Cl. 19-20 and Cl. 19-21 as they were amended in 2016. The limitations of the liability insurance pursuant to Cl. 19-21 are included in Cl. 18-98 as sub-clauses 5 and 6. Reference is made to the Commentary to Cl. 19-20 and Cl. 19-21.

    However, wreck removal liability is not comprised by Cl. 18-98, as opposed to Cl. 19-20, but covered under Cl. 18-96, cf. Cl. 18-98, sub-clause 5, letter (c).

    The same goes for liability towards third parties for collision and striking, which is covered by Cl. 18-97. The “sister ship” collision and striking cover pursuant to Cl. 18-98, sub-clause 2, is maintained under the general liability cover in Cl. 18-98, cf. Cl. 19-20, sub-clause 2, and the Commentary thereto.

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    Clause 18-98. Liability insurance

    The insurer will indemnify the assured’s liability resulting from personal injury or loss of life and loss of or damage to an object belonging to a third party in direct connection with the performance of the Project. Cl. 4-16 shall apply similarly after the MOU has been launched, provided that t...

  • Clause 18-99. Delay in delivery

    Section 4 shall apply correspondingly to delay in delivery of the Project caused by damage recoverable under Section 6-2. As provided in Cl. 18-94, a separate sum insured must be agreed as well as deductible and premium. For delay in delivery this means that the daily amount must be agreed, cf. Cl. 18-47 or Cl. 18-48, and the number of days of indemnity per casualty and in all, cf. Cl. 18-43, sub-clause 3. The sum insured is the amount arrived at by multiplying the daily amount with the number of days insured in all for the insurance period. Deductible must be given as a period, i.e. a number of days, cf. Cl. 18-49.

    If one casualty results in a delay recoverable under Cl. 18-99 and a second casualty occurs which does not extend the period of delay, meaning that repairs are carried out simultaneously, Cl. 18-54 on simultaneous works applies correspondingly. Reference is made to the Commentary to Clauses 18-43 to 18-58.

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    Clause 18-99. Delay in delivery

    The rules of Section 4 shall apply correspondingly to delay in delivery due to damage which is recoverable under Section 6-2.

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