The provision is, strictly speaking, unnecessary, but it does provide an appropriate bridge between the general loss-of-hire rules in Chapter 16 and the rules in Section 6. The provision shows that the general rules on loss-of-hire apply to both the "actual" loss-of-hire cover and to the extensions afforded under Cl. 15-17 and Cl. 15-18. Thus, if a loss of time has occurred as a result of a peril covered by the war risk insurance, the rules in Chapter 16 determine whether and to what extent the assured will be entitled to cover from the war risk insurer.
On one point, however, the loss-of-hire cover under the war risk insurance goes further than the loss-of-hire insurance under marine perils insurance: with respect to loss of time due to blocking and trapping. Under Cl. 16-1, sub-clause 2 (b), for the insurer to be liable for a marine peril, the obstruction must be "physical". The loss-of-hire cover under war risk insurance also includes blocking and trapping due to intervention by a foreign State power, cf. sub-clause 2, which corresponds to Cl. 15-12.
Both Cl. 15-16 and Cl. 15-12 apply only to blocking and trapping in ports or similarly limited areas. In an arbitration award rendered on 8 May 2009 between Dolphin Drilling and the Norwegian Shipowners’ Mutual War Risks Insurance Association (Bulford Dolphin), the court found that a rig anchored off the coast is not in a port or similar limited area. The court also stated that Cl. 15-16 only applies to blocking or trapping due to interventions by a State power, cf. in that respect the remark above, and that blocking or trapping due to threats of attack by terrorists or pirates is not recoverable under loss-of-hire insurance. This statement is an obiter dictum and concerns the construction of an issue that is highly controversial. However, as long as piracy was limited under Cl. 2-9 (d) to the “open sea”, the statement had little practical significance in relation to piracy because it is unlikely that the geographical area specified in Cl. 15-12 and Cl. 15-16 would at the same time be in the “open sea”. In view of the expansion that has now been made in the geographical aspect of the concept of piracy, however, piracy could conceivably take place within “a similar limited area”, cf. the Commentary on Cl. 2-9 (d). To avoid this expansion of the concept of piracy having an unintended effect on loss-of-hire cover, the Committee agrees that it is natural to limit the scope of Cl. 15-16 to only cover interventions by foreign State powers. With regard to shipowners’ overall need for loss-of-hire insurance in the event of attacks by pirates and terrorists, the cover provided under Cl. 15-16 will in any event be totally marginal.
In addition, the insurer will cover loss of time for the assured in those situations referred to in the subsequent sub-clauses, although the scope of the cover in those cases will be set according to the rules in Chapter 16. The provision in Cl. 15-19 is not really an "addition" to Chapter 16; instead, it replaces one provision from that Chapter by another. The reality of the circumstances should be unproblematic, however.
The rules on deductibles and number of days of indemnity are to be indicated in the insurance contract, see Cl. 16-7, and it is, therefore, not necessary to have a separate provision on these matters in this Section. Insofar as the general rules are not appropriate, the parties must make sure to agree separately on which deductibles and compensation days/days of indemnity are to apply, see the Commentary on Cl. 15-17 below.
Cefor - The Nordic Association of Marine Insurers