1. Hull Insurance Underwriting
1.1. 1. valuation of vessel
1.2. 2. Management and ownership of the vessel
1.3. 3. Type of vessel
1.4. 4. Trading activity
1.5. 5. Age of vessel
1.6. 6. Size/tonnage of the vessel
1.7. 7. Classification society
1.8. 8. Condition of insurance and policy deductible
1.9. 9. Insurer's underwriting experience of similar vessel
2. Deductible is the first amount of loss the insured agreed to bear himself, insurer will only liable for loss exceeding the deductible.
3. 1. Types of vessel -Liners -Tramp 2. Vessel Currently used for trade -Container ships -Roll on roll off ship -Break bulk or conventional ships -Bulk carrier -Harbour and offshore vessel -Fishing vessel
4. Institute Time Clause (ITC) Hull1.10.83
4.1. Hull insurance provides comprehensive : -coverage for material damage to ships insured and -coverage for legal liability of ship owner arising from collision with another vessel
4.2. two (2) types of policy usually being underwrite:
4.2.1. - Time policy : duration of cover usually for specified period; 12 months - Voyage policy: duration of cover depends on specified journey.
4.3. ITC Hull contains 26 clauses and only following clauses will be discussed:
4.3.1. - Perils covered (clause 6) - Exclusions - Duration of cover: Termination of cover (clause 4) - Collision liability (clause 8) - Constructive total loss - Policy deductible (clause 12)
4.4. Peril Covered (Clause 6)
4.4.1. This policy will cover loss or damage to the ship insured caused by:
4.4.1.1. -perils of the sea, rivers lakes and other navigable water, -fire & explosion, -violent theft by person outside the vessel, -jettison -piracy -breakdown of machinery installed in the ship as part of propulsion mechanism -contact with land conveyance, dock or harbour equipment installation -earthquake, volcanic eruption or lightning
4.4.2. This policy will also cover loss or damage to the subject matter insured (other than vessel, such as machinery/crane on the vessel) , provided that such loss or damage has not resulted from want of due diligence by the assured, owner or their managers.
4.4.2.1. -accidents in loading, discharging or shifting cargo or fuel -bursting of boilers, breakage of shafts or any latent defect in the machinery or hull -negligent of repairers or charterers provided such repairer and charterers are not an assured of the policy -negligent of master officers or crew
4.5. Exclusions
4.5.1. This policy will not cover war, strike, malicious act and nuclear related risks.
4.6. Duration of cover
4.6.1. -Voyage policy: Policy terminate once the vessel arrived at port of destination of the said voyage. -Time policy: cover for a fixed period of time, usually 12-month subject to variation provided by the continuance and termination clause.
4.7. Termination Clause (Clause 4)
4.7.1. This insurance policy will terminate automatically on the occurrence of following events:
4.7.1.1. -Change, suspension or expiry of classification by classification society. If the vessel at the time of event, still at the sea, the termination should take place after the vessel arrive at her next port. -Any change in the ownership or flag (represent country in which the vessel being registered).
4.8. Collision Liability (Clause 8)
4.8.1. Insurer will only pay ¾ of insured’s liability arising from collision of insured’s vessel with another vessel and must arise due to tort and not from a contract. Maximum indemnity payable shall not exceed ¾ of insured values.
4.9. Constructive Total Loss
4.9.1. In order to consider for constructive total loss (CTL), the insured value shall be compared to repair value. There is a valid CTL where cost of recovery and cost of repair of the vessel exceed the insured value.