Hull Clauses

SALIENT FEATURES OF INTERNATIONAL HULL CLAUSES (01/11/03) AND OTHER HULL FORMS
This document lists certain provisions of the I nternational Hull Clauses (01/11/03) and also certain provisions appearing in the I nstitute Time Clauses - Hull (01/10/83), the Norwegian Plan of 1996
(2003 version), the American I nstitute Hull Clauses (J une 2, 1977, the French Hull Form (2002), the Swedish Hull Conditions (2000) and the DTV Clauses (1984).

THI S DOCUMENT I S I N CONSTANT EVOLUTI ON No reliance should be placed on this document, which is prepared solely for descriptive purposes. This document does not and is not intended to
provide legal advice as to the meaning of any provision nor as to any issue of market practice. I t is not and is not intended to be used as an aid to construction or interpretation of the meaning of any
provision. I n each case, reference must be made to the precise provisions of each of the hull forms in question (and the commentary in the case of the Norwegian Plan) and the applicable law.

IHC (01/11/03) ITC-Hulls (01/10/83) Norwegian Plan of 1996 (v.
2003)
AIHC (June 2, 1977) French Hull 1/1/2002 Swedish Hull Conditions
2000
DTV Clauses
1 General
English law and practice
and exclusive English
jurisdiction

English law and practice, and
exclusive English jurisdiction
where written on MAR 91
form

Norwegian law and
exclusive Norwegian
jurisdiction (where risk led
in Norway) (para 1-4)

Silent on applicable law

Preamble French Law

The insurers may only be
sued before the Tribunal de
Commerce of the place
where the leading insurer's
insurance market is situated.

Swedish Law by Arbitration
(Clause 44)

126. German Law
Applicable
German Law shall apply to
the relations between the
parties, but Statute Law shall
apply to marine insurance
only in so far as the statutes
are binding and unalterable.
127. Jurisdiction
Difference between the
parties to an insurance
contract shall be settled
exclusively before the Court
of Underwriters' legal
domicile. If, however, the
insurance contract was
concluded by an Agent at
Underwriters' or the Agent's
branch office, and such
office is domiciled outside
the jurisdiction of the court
of Underwriters' main
domicile, then the contract
shall also come under the
jurisdiction of the Court of
the branch office.

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DTV Clauses
2 Perils
Tried and tested named
perils (perils of the sea, fire,
explosion etc), plus due
diligence perils of latent
defect, crew negligence etc.
Cover for accidents in
loading etc and contact with
satellites etc no longer
subject to due diligence
proviso.
Cover for common costs
given at 50% where
loss/damage caused by burst
boiler, broken shaft or latent
defect
Optional Additional Perils
Cover (see 41 below) gives
cover for costs of correcting
the latent defect and
repairing the burst
boiler/broken shaft and the
remaining 50% of common
costs

Named perils as IHC-03, but
cover for accidents in loading
etc and contact with satellites
etc subject to due diligence
proviso (cl 6).
No express provision for
treatment of common costs.
Adjusting practice.

Cover for all damage, less
express exceptions which
include piracy and mutiny
(paras 10-4 and 12-3 to 12-
5). Losses attributable to
contamination not
recoverable unless
preventative measures taken
within 3 months (para 12-
5(f))
Burden of proving loss and
its extent rests with Assured
(para 2-12).
Where damage caused by
error in design or faulty
material, Underwriters not
liable for costs of renewing
or repairing the parts not in
proper condition unless
they were approved by class
(para 12-4)
Common expenses
apportioned on basis of cost
of each class of work unless
time related (para 12-14).

Named perils (but piracy
excluded). Cover for
accidents in loading etc,
explosions and contact with
aircraft etc subject to due
diligence proviso (lines 70-
74).
Cover for damage caused by
burst boilers and latent
defect excludes cost and
expense of repairing or
replacing the defective part
(lines 79-80)

Cover for all damage (Art
1.1), less express exclusions
(Art 3).
.

All Risks cover (Clause 5)
less express exclusions
(Clause 7)

When the Insured claims
indemnity on account of a
casualty, he must prove that
the damage is recoverable
and also prove its extent. It
is the duty of the Insured to
provide the Insurer as soon
as possible with all the
documents and information
which may be of importance
for ascertaining the Insurer's
liability and which can
reasonably be obtained.
Furthermore, the Insurer or
the person nominated by the
Insurer shall always be
afforded access to the Vessel
in order to conduct the
supplementary inspections
and examinations that the
Insurer considers necessary
for assessment of the case.

All marine risks with some
named perils. But excluding
maritime lien and delay.
Machinery cover includes
latent defect, error or defect
in construction and breakage
of shaft.

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DTV Clauses
3 Leased equipment
Cover for equipment not
owned by the Assured, but
for which the Assured is
responsible given as
standard

No standard cover

Cover given as standard
(para 10-1)

Cover given as standard
(lines 18-19 and lines 114-
116)

Not covered as standard ?

Covered as per Clauses 1
The insurance covers the
Vessel as well as spare parts
on board. The insurance also
covers such equipment and
spare parts for the Vessel on
board which belong to the
Insured or which the Insured
has borrowed, hired or
purchased under a sale
agreement with a reservation
of title. Parts of the Vessel,
her equipment and spare
parts are covered by the
insurance also during the
period when these objects
have been temporarily
removed from the Vessel on
account of loading,
discharging, repairs or
refitting and reconstruction
provided that the objects are
to be put on board again
before sailing.

Article 4 DTV
Appurtenances and
Installations
Appurtenances are included
in the insurance even if these
are not the property of the
Assured.
4 Parts taken off
Cover for parts taken off the
vessel given as standard

No standard cover

Cover given as standard for
equipment temporarily
ashore (para 10-2)

No standard cover

Covered 1.1 & 7.2 (if owned
by the Assured).

Clause 1 The insurance also
covers parts of the Vessel,
her equipment and spare
parts which are removed
from the Vessel for repairs
on account of a casualty,
provided that the objects are
put back on board the Vessel
within a reasonable time.

Article 5 DTV Interests
whilst temporarily removed
ashore are covered.

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DTV Clauses
5 Pollution hazard
Covers loss and damage
caused by governmental
authority to prevent
pollution and environmental
damage/threat, consequent
upon damage to the vessel
for which Underwriters
liable

Cover does not extend to
governmental authority
action to prevent
damage/threat to
environment (cl 7)

Measures taken by a state
power to avert or minimise
damage to the vessel only
are covered, provided that
the risk of damage is caused
by an insured peril (para 2-
8).

Cover does not extend to
action to prevent
damage/threat to
environment (lines 87-91)

Not covered (Art 3-3al 3)

Not Covered (Clause 7-3

Article 18. DTV
This insurance includes loss
of or damage to the vessel
directly caused by any
acting under the sovereign
power to prevent or mitigate
a pollution hazard, or threat
thereof, resulting directly
from a peril covered under
this policy, provided such
act of governmental
authority has not resulted
from want of due diligence
by the Assured whilst
preventing or mitigating
such hazard or threat.
6 3/4
ths
RDC
Cover for 3/4
ths
of insured
value in respect of legal
liability arising on a
collision. Cover for legal
costs limited to 25% of the
insured value (save where
agreed). Pollution exclusion
does not extend to other
vessel or property on other
vessel nor to an Art 13(1)(b)
salvage award.
Optional 4/4
ths
and FFO
cover (see 37/38 below).

Cover for 3/4
ths
of insured
costs - no express limit.
Pollution exclusion does not
extend to other vessel or
property on other vessel.
Silent on Art 13(1)(b)
salvage award.
No optional 4/4
ths
and FFO
cover

4/4
ths
and FFO standard
(para 13-1)

Cover for 4/4
ths
of insured
costs where the majority of
Underwriters (in amount)
consent (agreed value).
property on other vessel.
Silent on Art 13(1)(b)
salvage award (lines 158-
184)
No optional FFO cover.

4/4
ths
and FFO standard (Art
1-2)
Cover for legal costs limited
to the Vessels insured value
property on other vessel

4/4
ths
and FFO standard
(Clause 5-d and 5-e)
Cover for legal costs limited
to the Vessels insured value

4/4
th
RDC. Plus contact with
fixed and floating objects.
Not subject to policy
deductible.

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DTV Clauses
7 Sistership
Where sister ships collide or
one salves another, liability
determined by mutually
agreed arbitrator

As IHC-03. (cl 7)

Insurer is liable as if salvage
performed by a third party
(para 10-11)

Liability to be determined by
mutually agreed arbitrator or
failing such agreement, by 3
arbitrators (lines 124-127
and 171-175)

If the insured vessel collides
with a vessel owned by the
assured or receives salvage
services from such vessel,
the indemnity payable by the
insurers shall be adjusted as
if the vessels belonged to
different shipowners.
The same applies if the
vessel comes into contact
with property or installations
belonging to the assured.
In the absence of an agreed
settlement between the
insurers and the assured,
liability for collision or
payment for salvage services
shall be determined by a sole
arbitrator in accordance with
the provisions of the
Nouveau Code de Procdure
Civile (Livre IV) or, in the
case of failure to agree on a
sole arbitrator, by the
Chambre Arbitrale Maritime
de Paris. (Article 26).

Not Available

Article 34.2 DTV With
regard to Underwriters'
indemnity payment in cases
of salvage, assistance and
third party liability claims,
vessels and other property of
the Assured will be treated
as being the property of a
third party.

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DTV Clauses
8 GA and Salvage
Cover for vessels
proportion of salvage,
salvage charges, general
average.
No reduction where the
vessel is underinsured.
Pollution exclusions do not
extend to Art 13(1)(b)
award or expenses under
Rule XI(d) of York
Antwerp Rules 1994
Optional GA Absorption
clause (BIMCO) (see 40
below)

Claims subject to reduction
for underinsurance. Silent on
pollution. (cl 11)
No optional GA Absorption
clause

Cover for contribution due
on interest insured and on
freight at risk and owned by
Assured. No reduction
where vessel is underinsured
(para 4-8).
GA Absorption provision
(para 4-8)
Losses recoverable without
application of any
deductible.

for underinsurance. Silent on
pollution. (lines 120-123 and
128-133)
No optional GA Absorption
clause

Cover for vessels
average (Art 1-3)
for underinsurance (Art 22
and 25)
GA Absorption provision
(Art 22 al 3) as standard (see
40 below)

Cover for vessels
average (Clause 5-b)
No reduction for under
insurance (same clause)

GA covered and not subject
to deductible.

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DTV Clauses
8-1 GA on ballast

10.3

When the vessel sails in
ballast, not under charter, the
provisions of the YORK
ANTWERP rules, excluding
XX and XXI shall be
applicable and the voyage,
for this purpose shall be
deemed to continue from the
port or place of departure
until the arrival of th vessel at
the 1
st
port or place thereafter
other than a port of refuge or
a port or place of call for
bunkering only. If at any
such inetrmediate port or
place there is an
abandonment of the
adventure originally
contemplated the voyage
shall thereupon be deemed to
be terminated.

4.11 Assumed GA

The insurer is liable for loss
incureed for the purpose of
saving a ship in ballast or
completing a voyage in
ballast provided that he
would have been liable for
the ships proportion of such
costs in accordance with the
GA adjustement under
YORK ANTWERP rules

However,, crews wages and
maintenance in accordance
with rule XI (b) of the
YORK ANTWERP rules are
not recoverable for the time
spent on permanent repairs.
Commission, costs and
interests are recoverable
under Paar 4-3 et 5-4.

Principe Jurisprudentiel
nest pas expressment
indiqu sur limprim.
POTTER v/ OCEAN INS
Co :
Le terme avarie commune
soppose celui davarie
particulire et signifie
sacrifice volontaire pour le
bnfice commun de
lexpdition et non pas
perte involontairement
prouve.
Il faut prendre en compte le
fait que lacte est fait pour le
bnfice de tous les intrts
concerns par le voyage,
sans considrer qui
contribuera lindemnit.
On peut par ailleurs
considrer que les assureurs
corps sont un intrt qui
bnficie du sacrifice et
doivent donc y contribuer.
La lgislation US prend
donc en compte la nature de
lacte et non pas la pluralit
dintrts dans lexpdition.
Attention cependant :
lorsquune police American
Institute Time clause est
souscrite en prvoyant que
ses clauses doivent tre
interprte selon la loi
Anglaise , il n y a pas de
possibilits de rglements
davaries communes dans ce
cas prcis car la loi Anglaise
exige quil y ait plusieurs
intrts pour le rglement
davarie commune.

ARTICLE 23 - Sailing in
ballast

When the vessel sails in
ballast and there is no other
contributory interest the
provisions of article 2 apply
to expenses and sacrifice
which would have had the
nature of general average if
the vessel has been carrying
cargo.

Loss incurred for the
purpose of completing a
voyage in ballast or for
saving the ship when
carrying no cargo to the
extent that the loss should
have been made good in GA
had the ship carried cargo ;
however, wages and
maintenance during the time
for permanent repairs are not
recoverable nor are expenses
in substitution for such
disbursements (Clause 5-c)

35.3 DTV
If the vessel sails without
cargo or with owners
cargos only, the policy
conditions in respect of the
GA as well as the YORK
ANTWERP rules 1974 with
the exception of rules XX
and XXI (interests et
commission special ) shall
apply accordingly.

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DTV Clauses
9 Sue and labour
Duty of Assured to sue and
labour and cover for charges
properly and reasonably
incurred.
No reduction where the
vessel is underinsured

where underinsurance (cl 13)

No reduction where vessel
underinsured (para 4-8)
Losses recoverable without
application of any
deductible.

where underinsurance (lines
144-157)

The assured must take all
reasonable care to ensure the
safety of the vessel. He must
take all reasonable measures
to safeguard the vessel from
an insured peril or to
minimise the consequences
of such peril (Article 11 et
12)
Assured covered for
expenses reasonably
incurred to save the vessel
from an insured peril or to
minimise such a peril
(Article 1-3)
Amount covered limited to
the agreed value

Covered under Clause 5-f
and Clause 6

32. Sue and Labour Charges,
Particular Charges
(1) Underwriters are liable
for :
1. such expenses
incurred by the Assured at
the time of the occurrence
for the purpose of averting
or minimizing loss or
damage as he could deem
imperative;
2. such expenses as
the Assured made at the time
of the occurrence upon the
request of Underwriters;
3. the cost of
ascertaining and assessing
loss or damage for which
Underwriters are liable,
provided and in so far as
these could be deemed
imperative in the
circumstances; Underwriters
are not liable, however, for
fees paid to experts and
advisers or to other persons
unless the employment of
such persons was agreed in
the insurance contract or
requested by Underwriters.
10/11 Navigation
Navigating provisions no
longer expressed as
warranties. Rather,
Underwriters not liable
during period of breach.
Cover resumes post breach.

Navigating provisions
expressed as warranties and
Underwriters possibly off
risk from the moment of
breach, even if breach
corrected (cl 1)

A deduction of one-fourth of
the claim applies when
damage sustained in a
conditional trading area
(beyond ordinary limits) and
no notice has been given
(para 3-15).

Navigating provisions (lines
59-69)

The vessel is covered
everywhere within the
geographical limits of the
policy whether in use,
moored, laid up or under
repair, and whether floating
or in dry dock. Article 4 et 5
(forbidden areas)

Clause 8 Vessel covered
within the limits mentioned
in the insurance contract
with exception mentioned in
this clause (Clause 8-a to 8-
f).

Subject to European or
World-wide Trading Area
limitations (Article 7 DTV)

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DTV Clauses
12 - Continuation
Cover to next port in good
safety at pro rata monthly
premium continues where
vessel in distress/missing (at
sea) or in distress (in port)
and where notice given as
soon as possible

Cover to port of destination
at pro rata monthly premium
continues where vessel at sea
or in distress or at a port of
refuge or call and where
previous notice given to
Underwriters (cl 2)

Where, upon expiry, insured
damage necessitates repair,
insurance is extended to
mooring at first place where
permanent repairs can be
effected and during repairs
carried out there (para 10-
10).

Cover to port of destination
at pro rata monthly premium
continues where vessel at
sea or in distress or at a port
of refuge or of call and
where previous notice given
to Underwriters (lines 23-24)

if at expiry of the policy the
vessel is under repair for
damage covered by the
policy or is on a voyage and
suffering from such damage,
cover under this policy is
extended at a pro rata daily
additional premium until
either the repair or the
voyage is completed
(whichever shall first occur).
Article 6

Clause 3
The commencement and
termination of the insurance
contract is determined in
accordance with the date and
the time that the parties have
agreed. All times stated are
computed according to UTC.
If no points in time have
been stated in the contract,
the commencement date is
computed to start at UTC
00.00 on the commencement
date stated in the contract
and ends UTC 24.00 on the
date when the contract
terminates.
In the event of such a
disappearance as is referred
to in Clause 24.2, where the
insurance period expires
before the right to indemnity
arises, the insurance is
extended to apply until the
point in time at which such
right arises. The right to an
additional premium is
governed by Clause 14.

Article 67. DTV
Continuation of Cover under
a Voyage Policy
(1) In the event of the vessel
arriving at destination in a
damaged condition, and
Underwriters being liable for
the damage, the cover shall
remain in force until the
completion of the repair. If
repair is unduly delayed by
the Assured the cover shall
terminate at the time when
the repair would have been
completed without such
delay (.) Underwriters are
entitled to an additional
premium in consideration of
the longer duration of the
cover (.)
68. Continuation of Cover
under a Time Policy
Where under a time policy
the vessel on the stipulated
expiry of the insurance is at
sea the cover shall continue
until the time when the cover
would end, in accordance
with sections 66 and 67, at
the next port of destination
() . If the cover is
continued Underwriters are
premium in consideration of
the longer duration of the
voyage; if the vessel is
missing, they are entitled to
the premium until the vessel
is presumed lost according
to section 72 below.

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DTV Clauses
13 Class/ISM
Vessel must be classed (and
comply with class
recommendations as to
seaworthiness) with an
agreed society and must
hold valid DOC and SMC.
Automatic termination, save
where the vessel at sea or
loss of class etc results from
insured loss/damage

Automatic termination on
change/loss of class save
where the vessel at sea etc or
loss of class etc results from
insured loss/damage (cl 4)

where the vessel at sea (para
3-14). Underwriters not
liable where loss has
resulted from breach of a
safety regulation and the
assured responsible for the
infringement (para 3-25)

where the vessel at sea etc
(lines 196-209)

The assured must
immediately disclose .any
change in the vessel's flag or
classification society and
any alteration, cancellation
or withdrawal of her class
(Art 8-3).
The assured undertakes to
comply, by the dates
required by the vessel's
classification society, with
any recommendations,
requirements or restrictions
imposed by that society,
which relate to vessel's
seaworthiness (article 9-1)
Non-compliance with the
duties listed above may lead,
according to the particular
circumstances to
cancellation of the policy at
three days' notice or
proportionate reduction of
the indemnity.

Vessel must be classed and
must comply both with
regulations issued by
supervisory authorities and
the Classification Society
(Clause 11-1).

No standard class
requirement but subject to
Alteration of risk wording
and requirement that the ship
not put to the sea in an
unseaworthy state

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DTV Clauses
14 - Management
change of ownership,
sailing on scrap voyages.
Duty to comply with
statutory requirements,
failing which Underwriters
not liable for causative
failures.

change of ownership etc.
Cover on scrap voyages
reduced to scrap value,
although claims for RDC/GA
at original insured value (cl
4, cl 1)

change of ownership (para
3-21)

change of ownership etc
(lines 196-209)

Article 17-7 to 17-9 If the
vessel is subject to public
sale or bareboat charter, the
policy terminates
automatically with effect
from the date of sale or
charter.
If the vessel or at least half
the interest insured is sold
the policy is terminated from
the date of sale unless there
is prior agreement to the
contrary.
If the vessel is chartered
other than on a bareboat
basis, this policy continues
unless otherwise agreed and
subject to an additional
premium if required.

Not Found

Termination in case of
change of management, sale
of ship (Article 12 DTV)
15 - Deductibles
Deductibles apply to all
claims except for a total loss
and sighting the bottom in
certain circumstances.
Aggregating provision for
heavy weather, ice damage
and cargo lightening (where
permitted).
Optional AMD.
No deductible for claims
under optional GA
Absorption clause.

As IHC-03, but no lightening
provision (cl 12)

No lightening clause.
AMD (para 12-16)

As IHC-03, but no
lightening provision (lines
29-35)

Settlement is made without
deductible in case of total
loss or abandonment. All
other indemnities due in
respect of a single event are
settled after deduction of the
amount indicated in the
schedule attached to the
policy. Article ?
Surveyors' and average
agents' fees and expenses, as
provided in article 18, are
fully recoverable from the
insurers (Article 19).

Optional AMD as per
particular condition.

No lightening clause.

Deductible as agreed by the
parties (Clauses 38).
Ice Damage Deduction
(Clause 34) and Machinery
Damage Deduction (Clause
35) are possible. Non
cumulation of deduction as
per Clause 36;

Deductible negotiated on
basis of an agreed flat
monetary figure. No
deductible for total loss.

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DTV Clauses
16 New for old
Claims payable without
deduction on the basis of
new for old

As IHC-03 (cl 14)

Restoration to condition
prior to occurrence of
damage (para 12-1), not
necessarily new for old in
all circumstances (see
Commentary)

As IHC-03 (line 111)

Restoration to condition
prior to occurrence of
damage (Art 20-1), not
necessarily new for old in
all circumstances

Not Found

No deduction (Article 28
DTV)
Deductions in respect of loss
or damage specified in
Article 75, Section 3,
Subsection 1 and Article 76,
Sections 1-8, ADS, will not
apply.

17 Bottom treatment
No cover for scraping,
gritblasting, painting the
vessels bottom, save for
damaged/disturbed areas.
Cover extended to anti-
fouling coating

As IHC, but no cover for
anti-fouling coatings (cl 15)

Cover for bottom painting to
damaged areas only (see
Commentary)

No claim allowed in respect
of painting or scraping the
vessels bottom (line 113)

Article 20-8 :
For special expenses in
respect of the ship's bottom,
shall only by payable by
insurers, as proved by
receipted invoices, the
expenses incurred for
supplying and applying
anticorrosion layer, first
coats of primer, top anti-
fouling paints and self-
polishing coats to the
underwater surfaces of the
vessel, when such repairs are
allowed as partial average.
When as a consequence of a
particular average, the vessel
must stay in dry-dock for so
long a period that the above-
mentioned layers lose their
efficiency, half of those
special expenses incurred in
respect of the vessel's
bottom should be allowable
in particular average for half
of their amount.

Clause 7.7 The Insurer is not
liable for:
a) expenses for painting
bottom outside an area
affected by a casualty;
e) damage to zinc anodes,
magnesium anodes etc. fitted
for protection against
corrosion, unless the objects
were torn away through
external force;

Article 29 DTV. Bottom
Painting
Underwriters will indemnify
the costs of painting caused
by the insured damage. The
costs of scraping and toxic
painting shall be paid in
proportion to the time, which
corresponds to the remaining
period of the paint's
durability.

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DTV Clauses
18 Wages and
maintenance
No cover for wages and
maintenance, other than in
GA or whilst vessel
underway to repair port or
on trial trips

As IHC-03 (cl 16)

No cover for
wages/maintenance during
period of repair, unless
specially agreed (para 12-
5(a)). Cover during period of
removing vessel for repair
(para 12-13)

As IHC-03 (lines 107-110)

Crew wages and
maintenance are note not for
insurers' account except as
specified below. (Art 20-2)
When the vessel stays-.at a
port of refuge waiting for
spare parts essential to
enable the voyage to
continue, crew wages and
maintenance are for insurers'
account while such spare
parts are in transit.(Art 20-
5).
Cover during period of
removing vessel for repair
(Art 20-6).

Insurers are not liable of
wages and maintenance of
crew and similar expenses
connected with the running
of the Vessel except when
allowed in General Average
and the cases referred in
Clause 30 (Clause 7.5-a).

19 Agency commission
No cover for time and
trouble to supply
information or documents

As IHC-03 (cl 17)

Silent

Silent

Silent

14

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DTV Clauses
20 Unrepaired damage
Measure of indemnity is the
lesser of depreciation in
market value or costs of
repair

As IHC-03 (cl 18)

Claims only recoverable
where damage unrepaired at
time of sale and limited to
reduction in proceeds
attributable to damage (para
12-2)

Diminution in actual market
value demonstrated by
Assured at date of expiry of
policy (lines 117-119)

Not covered (Art 20-1).
Insurers are liable only for
the cost as proved by
receipted invoices

Indemnity for unrepaired
damage is not payable,
unless the Insurer has agreed
that repair is not to be
effected or unless the
Insured proves that on the
sale of the Vessel he has
suffered a loss on account of
the damage. However, the
indemnity is limited to such
repair, which is requested by
the Vessel's Classification
Society. Thus indemnity for
unrepaired damage is not
payable if the Vessel is sold
for breaking up or for other
purpose for which the
damage is of no
consequence (Clause 32).

Article 75(5) ADS If the
Assured has a legitimate
interest, and if there are
important reasons for which
he cannot be called to
account, he may declare
immediately after his claim
has been ascertained that he
will not have his vessel
repaired. He must disclose
his reasons. The sale of the
vessel before the beginning
of the repair is to be deemed
an important reason unless
the insurance contract has
been assigned to the buyer.
The liability of Underwriters
in such case is governed by
the ascertained amount of
damage. From such amount
the deduction "new for old"
and "salvage" shall be made
(vide para (3)).

15

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DTV Clauses
21 Constructive total
loss
CTL payable where costs of
repair/recovery exceed 80%
of the insured value

of the insured value (cl 19)

CTL payable where there is
condemnation and costs of
repair exceed the higher of
80% of the insured value or
the value of the ship post
repair, to be assessed on the
basis of market value, when
the assured makes request
for condemnation (para 11-
3)

of the insured value (lines
134-143)

of the insured value (Article
21-2).

Clause 26. The Insured is
entitled to indemnity as for
total loss (constructive total
loss), when the Vessel has so
extensive damage due to
casualty that the repair costs
amount to at least 80 per
cent of the agreed insured
value of the Vessel. When
determining whether the
Insured is entitled to
indemnity for constructive
total loss, such unrepaired
casualty damage is also to be
taken into consideration, as
have occurred and have been
reported to the Insurers
concerned and surveyed by
them in the course of the last
three years prior to the
casualty giving rise to the
request for indemnity.
Costs of repairs includes all
costs of removal to the place
of repair and of repair,
though not salvage
remuneration.
Clause 26-2 and 26-3 to
follow.

CTL judged on basis of
unfitness for repair based
on 100 % of the hull value.
22 Freight waiver
If Underwriters admit a total
loss, they shall make no
claim to freight, whether
NoA given or not

As IHC-03 (cl 20)

Silent


Silent

16

2003)
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DTV Clauses
23 Assignment
Underwriters will recognise
an assignment of or interest
in the insurance or in any
monies payable under it, in
certain circumstances

As IHC-03 (cl 5)

Where there is a change of
ownership, the assured may
transfer claims for known
damage to the new owner
(para 12-2)

No specific provision, but
anyone other than the Owner
claiming under the policy
cannot recover more than if
the Owner had claimed as
assured (lines 4-5)

?
Clause 43 Where the insured
Vessel is mortgaged to a
third party, the insurance is
valid also for the benefit of
the Mortgagee but does not
in relation to the Insurer
provide more extensive
rights for the Mortgagee
than for the Insured.

24 Disbursements
warranty
Certain additional
insurances are permitted by
Underwriters

Sets out additional insurances
permitted (cl 21)

Hull Interest Insurance
(Disbursements) permitted
up to 25% of Insurable value
(para 14-9).

Sets out additional
insurances permitted (lines
210-238)

Sets out additional
insurances permitted (Article
7-3) with Insurers consent.

17

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DTV Clauses
25 Cancelling returns
If the insurance is cancelled
by agreement, Underwriters
will pay pro-rata monthly
net premium, provided there
has not been a total loss.
Lay-up returns are optional
under clause 39

Cancelling and lay-up returns
given (cl 22)

Lay-up returns subject to
negotiation (para 6-6)

Cancelling and lay-up
returns given (lines 40-54)

Cancelling and lay-up
returns given (Article 17-10
to 17-12) and 16 (lay-up
returns).

Premium for the whole
period of cover is due in
case of total loss or
abandonment recoverable
under the policy. If total loss
or abandonment is not so
recoverable, the premium is
due proportionately to the
time on risk until total loss
or notice of abandonment,
but subject to a minimum
payment of three months'
premium.
Premium is refunded in case
of total loss, sale or bareboat
charter of the vessel before
attachment; if the contract is
broken before such
attachment by the assured
for any other reason, insurers
are entitled to payment of
half the agreed premium up
to a maximum of 0,50 % of
the sum insured. (Article 15-
5 and 15-6)

Lay-up returns allowable for
ships in safe port subject to a
14 day franchise. Differing
returns for ships under
repair, without cargo and
those with cargo and under
repair.
26 Separate insurances
Where more than one vessel
insured, each vessel deemed
to be separately insured

No standard provision

Silent


Silent, except for collision.
And salvage (Article 26).

18

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DTV Clauses
27 Several liability
Underwriters obligation
several, not joint


Customary for each
Underwriter to issue a
separate policy to the
Assured.


Insurers are liable only for
their own respective
proportion of the sum
insured and have no joint
liability with any other
insurers (Article 28).

Article 9.1 DTV : For
insurances written by more
than one Underwriter, each
individual Underwriter is
always liable only for his
own proportion and not
jointly.

28 Affiliated companies
Underwriters waive rights
of subrogation against
affiliated companies in
certain circumstances


Silent

Underwriters waive rights of
subrogation against affiliated
companies in certain
circumstances (lines 6-8)

Silent

29 War and Strikes
Exclusions for war and
strikes losses

strikes losses (cl 23-24)

War perils (which include
piracy and mutiny) insured
separately (paras 2-8 and 2-
9)

strikes losses (and piracy)
(lines 239-246 and lines
249-253)

War, strikes, lockouts and
other similar events
excluded (art 3-1-9 to 3-1-
12)

Excluded as per Clause 7-1-
b to 7-1-f

Not covered but
conventional War & Strikes
cover can be added.
Basic cover includes piracy.
30 Terrorists, political
motive and malicious acts
Exclusions for loss by
terrorists, political motive
and malicious acts (any
weapon)

terrorists, political motive
and malicious acts (any
weapon of war) (cl 24-25)

Separately insured as war
perils (para 2-9)

Malicious acts exclusion
(lines 247-248)

terrorists, political motive,
etc (art 3-1-9 to 3-1-12)

31 RACE, Chem/Bio
Exclusion for loss by certain
radioactivity, nuclear
weapons and
chemical/biological
weapons

Nuclear exclusion (cl 26), but
RACE CL 356 and
Chem/Bio CL 365 frequently
incorporated.

Release of nuclear energy
excluded (para 2-9).

Nuclear exclusion (line 244),
but Extended Radioactive
Contamination Exclusion
clause (March 1, 2003) and
Chemical, Biological, Bio-
chemical, and
Electromagnetic Exclusion
clause (March 1, 2003)
frequently incorporated

Exclusion for loss by certain
radioactivity, nuclear
weapons.
General exclusion for
weapons includes
chemical/biological
weapons.
Article 3-1 8 et 3-1 13

19

2003)
2000
DTV Clauses
32/33 Navigating limits
The vessel shall not enter,
navigate or remain in
certain areas, between
certain times. Not expressed
as warranties. Bering Sea
Transit cover free.

No standard provision, but
Institute Warranties
(01/07/76) frequently
incorporated. Expressed as
warranties. Bering Sea
Transit has to be specifically
agreed

Trading limits as per the
Appendix. Insurance ceases
when vessel enters an
excluded area and resumes
when vessel leaves excluded
area (para 3-15)

American Institute Trade
Warranties (July 1, 1972)
frequently incorporated.
Expressed as warranties.
Bering Sea Transit has to be
specifically agreed.

navigate or remain in certain
areas, between certain times
(Article 5)

navigate or remain in certain
areas, between certain times
(Clause 8)

See navigation above 10/11
34 Recommissioning
As a condition precedent to
Underwriters liability,
survey required and
conditions to be complied
with where vessel laid up
for 6 months

Silent

Silent

Silent

Silent

20

2003)
2000
DTV Clauses
35 Premium payment
Premium must be paid
within 45 days of inception
(or by instalment),
otherwise Underwriters may
cancel on 15 days notice to
the Assured, via the broker

LSW 3000 frequently
incorporated

within 14 days, otherwise
Underwriters may cancel
(para 6-2). Interest due on
late payment.

Premium due on and must be
paid within 30 days of
attachment, otherwise
Underwriters may cancel on
10 days notice to the
Assured or broker (line 37
and lines 55-58)

within 30 days of inception
(or by instalment), otherwise
Underwriters may cancel on
8 days notice to the Assured
The Assured can pay the
premium in four quarters (if
required before the
attachment of the policy.
Articles 15-1 to 15-3

Clause 14
Premium shall be paid
quarterly in advance.
In the event of delay with
payments of the premium,
the Insurer is entitled to
debit interest for delay
Additional premium if the
insurance is prolonged after
termination of the insurance
period
Where there is an increase of
the risk during the insurance
period for which the Insurer
accepts responsibility, he is
premium.
Where the Insurer pays
indemnity for total loss or
pays the amount insured in
accordance with Clause 6,2,
he is entitled to credit the
whole premium agreed.

8 Premium Payment
8.1 The premium is to
be paid in advance for each 3
months' period.
8.2 Additional
premiums shall be paid
together with the following
quarterly instalment.
8.3 The discount is 7.5
%.
The premium must be
received by Underwriters
within 10 days after
commencement of the 3
months' period. If the
payment is effected through
a broker, the premium must
be received by him within
the above mentioned period
and must be passed on
immediately, but it must be
received by Underwriters
within further sever, days at
the latest.
.
36 Contracts (Rights of
Third Parties) Act 1999
Subject contrary provision,
only the assured may
enforce benefits under the
policy


Insurance may be effected
for the specific benefit of a
named third party (para 8-1)

see 23 above

?

37 Optional FFO cover
Fixed and floating cover
given as optional


Standard provision


Standard provision

Standard Provision

21

2003)
2000
DTV Clauses
38 Optional 4/4
ths
cover
4/4
ths
RDC given as optional


Standard provision

See 6 above

Standard provision

Standard Provision

39 Optional lay-up
returns
Lay-up returns given as
optional

See 25 above

Lay-up returns are subject to
negotiation (para 6-6)

See 25 above

See 25 above

40 Optional GA
Absorption
GA Absorption clauses
(based on BIMCO) given as
optional. Includes cover for
special charges and claims
payable without deductible


Standard cover up to an
agreed amount but does not
include special charges (para
4-8)


Standard cover up to an
agreed amount (1 % of the
Insured value with a
maximum of EUR 60 000)

No standard Absorption
clause.
41 Optional Additional
Perils
Additional perils cover
given as optional, to include
the common costs not
covered for burst boilers or
latent defect, where
loss/damage caused. Cover
also included for costs of
repairing burst boiler and
correcting the latent defect,
where loss/damage caused.
Cover also given for loss or
damage caused by any
accident or by negligence,
incompetence or error of
judgment of any person.
Cover subject to due
diligence proviso.

Institute Additional Perils
Clause (01/10/83)

See 2 above

AHIS Liner Negligence
clause (June 2, 1977).
Excludes costs of repairing
or renewing any part
condemned solely as a result
of latent defect, wear and
tear, gradual deterioration or
fault or error in design or
construction.

Additional perils cover given
as optional in additional
clauses (I to XI)

22

2003)
2000
DTV Clauses
42 Leading
Underwriters
Leading Underwriters
authorised to agree claims
on behalf of slip followers


Claims leader named on slip
may bind co-insurers (para
9-1) provided settlements in
accordance with insurance
conditions (para 9-9)


Claims leader named on slip
may bind co-insurers
(Article 28-2)

Article 9 DTV Agreements
between the leading
Underwriter and the Assured
are binding upon the co-
insurers. The same applies to
the settlement of claims and
recovery actions.
The leading Underwriter is
also authorized, on behalf of
the co-insurers, to sign
mortgage clauses and
pledging notices as well as
to issue guarantee
declarations in accordance
with Clause 24.
Notifications any
declarations of legal intent
received by the leading
Underwriter shall be deemed
to have also been received
by the co-insurers.
The leading Underwriter is
authorised by co-insurers to
conduct legal proceedings on
their behalf.

43 Notice of Claims
Must be given within 180
days of the Assured,
Owners or Managers
becoming aware of loss,
damage, liability or expense
which may result in a claim,
failing which Underwriters
not liable (unless agreed to
the contrary)

Notice to be given prior to
survey and to the nearest
Lloyds Agent (cl 10)

Notice must be given within
6 months of Assured,
master, chief engineer
becoming aware of a
casualty and within 2 years
of the casualty other than for
underwater damage (para 5-
23)

Prompt notice (and where
possible prior to survey) to
be given in the event of any
accident or occurrence
which could give rise to a
claim (lines 92-94)

Prompt notice (and where
possible prior to survey) to
be given in the event of any
accident or occurrence
which could give rise to a
claim (Article 13)
the assured must proceed
with a joint survey of
damage with insurers'
representatives within sixty
days of the accident at the
latest, if damage occurs at a
port this period is reduced to
fifteen days.

Notice of claim to be
submitted within 15 months
of the termination of the
insurance (excluding GA).

23

2003)
2000
DTV Clauses
44 Tender Provision
Underwriters may take
tenders or require tenders to
be taken, plus allowance pro
rata of 30% per annum of
insured value given for
delays caused by
Underwriters requirements

As IHC-03 (cl 10)

Assured has choice of repair
yard, but Underwriters
liability reduced to amount
of lowest adjusted tender
plus 20% of the insured
value per annum (para 12-
12)


Assured has choice of repair
yard but Underwriters may
require tenders to be taken.
In case of failure, the
indemnity can be reduced of
25 % (Article 20-3)

28.2 Insurer may request
tenders to be invited from
those shipyards that he
considers suitable. If the
procurement of repair
tenders involves loss of time
exceeding ten days
computed from the receipt to
acceptance of tenders, the
Insured will compensate for
the loss of time during the
excess period up to 20% per
annum computed on the
insured value of the Vessel.
When comparing tenders
received, the expenses for
moving the Vessel, where
such expenses come into
question, shall be added to
the tender sums. The Insured
is entitled to limit its liability
to an amount comprising the
lowest tender received
together with any moving
expenses with a supplement
of 20% per annum computed
on the insured value of the
Vessel, for the period, that is
saved for the Insured by
acceptance of another tender.
If the Insured has reasonable
cause to object to repair
being conducted at a
particular shipyard that has
submitted a tender, he is
entitled to request that the
tender in question should not
be taken into account.

Insurers retain the right in
veto Insureds choice of
repairer. Allowance of 30 %
per annum of hull value
given for delays caused by
Insurers insistence on
alternative tenders. Non co-
operation by insured to 15
% settlement penalty.

24

2003)
2000
DTV Clauses
45 Duties of the Assured
Sets out the duties of the
Assured in relation to
claims and the
consequences of any
attempt to mislead the
Underwriters


Assured to provide
information required by the
Underwriters. Underwriters
not liable where the Assured
has acted fraudulently (para
5-1)


Article 8 : The assured must
disclose, on concluding the
contract of insurance, all
circumstances of which he is
aware that would influence
the insurers in assessing the
risks to be covered, and
must disclose to the insurers,
as soon as he is himself
aware of them,
circumstances affecting the
risk which occur during the
time of the insurance.
Article 11 : The assured
must take all reasonable care
to ensure the safety of the
vessel. He must take all
reasonable measures to
safeguard the vessel from an
insured peril or to minimize
the consequences of such
peril +Article 12.

Clause 23 regarding the
duties of the Assured in
relation with measures to be
taken in case of Casualty.

Clause 9 regarding the duty
of disclosure of the
conclusion of the insurance
contract.

Clause 10 regarding the duty
of disclosure during the
insurance period.

Shipowner expected to take
action to protect the ship
from further loss or damage
following a casualty.
Recovery subject to
deductible.
46 Duties of the
Underwriters
Sets out the duties of the
Underwriters in relation to
claims, to include the
agreement of adjusters and
undertakings to give prompt
consideration to payments
on account and to respond
within 28 days of a final
adjustment


Underwriters to issue an
adjustment as promptly as
possible (para 5-2) and to
make payments on account
unless they have reasonable
doubts as to liability (para 5-
7)
Adjustment issued by
Underwriters but Assured
may demand consideration
of claim by a Norwegian
average adjuster (para 5-5)


Article 27-1 All loss or
damage for insurers' account
are payable thirty days after
presentation of all relevant
evidence to the bearer of
such evidence and of this
policy, without power of
attorney being required.

25

2003)
2000
DTV Clauses
47 Provision of security
Underwriters will give due
consideration to providing
security in an appropriate
form.


Underwriters not obliged to
provide security (para 5-12)



Clause 46
The Insurer is only liable to
provide security to release or
prevent arrest of the Vessel,
property or assets of the
Insured if the Insured can
show that the claim causing
the arrest is covered by the
liability of the Insurer under
the insurance. When such
liability has been shown to
exist, the Insurer has a
reasonable time at his
disposal to provide
satisfactory security.
The obligation of the Insurer
to provide guarantees is
limited to an amount
corresponding with the
proportion that has been
insured under this insurance.
When the Insurer provides
security, without any
obligation to do so, the
Insured shall reimburse any
cost or loss arising
therefrom.
The main Insurer is entitled
to charge 1 % in commission
on the amount of any
guarantee issued.

Article 24 DTV. Bail

If the Assured is under
obligation to provide
security for an insured loss,
or if the provision of security
for such a loss is necessary
in order to prevent
impending arrest,
Underwriters will undertake
to issue a guarantee in
accordance with the
conditions of the policy or to
pay the required amount to
be deposited.

26

2003)
2000
DTV Clauses
48 Payment of claims
Claims payable to the loss
payee or the Assured

Silent

Claims payable 6 weeks
after adjustment is or should
have been issued (para 5-6).
Provision for interest.

Claims payable to loss payee
or order or to opposing
vessel in a collision or to
those who provided security
in salvage cases (lines 9-13)

All loss or damage for
insurers' account are payable
thirty days after presentation
of all relevant. Article 27-1

Clause 42
When the Insurer has
received the required
documents and information,
he must submit his
calculation of the indemnity
to the Insured within
fourteen days if the
indemnity is for total loss,
and otherwise within three
months thereafter.
If a dispute arises that is
referred to an Average
Adjuster in accordance with
Clause 44, indemnity is paid
within fourteen days after
the average statement has
acquired legal force or, if it
is appealed against, within
one month after the court's
judgment has acquired legal
force.
The Insurer is entitled to set
off any claim due from the
Insured against such advance
payment, indemnity or
refund of premium as the
Insured is entitled to receive
from the Insurer.

27

2003)
2000
DTV Clauses
49 Recoveries
The Assured shall assess
recoveries and keep
Underwriters advised.
Underwriters will contribute
to costs. Recoveries split
pro-rata insured/uninsured
losses.

No standard provision, save
that recoveries credited first
to Underwriters (cl 12).

Recoveries split between
underwriters and assured
pro-rata (para 5-13).


Not specifically mentioned.

Clause 47 Where the Insurer
pays indemnity to the
Insured or to the injured
party, he is subrogated to the
Insured's rights against third
parties. The Insurer is also
entitled to collect the
recovery amount arising
from such recourse claim
and also pursue such
subrogation action in its own
name at court. Where the
Insurer recovers from a third
party a net amount in excess
of the indemnity paid by him
to the Insured with addition
of interest, the Insured is
entitled to the surplus.
Where the Insured by an
agreement which cannot be
considered as customary in
the particular case, has
relinquished wholly or partly
his rights against a third
party, the Insurer is released
from liability to a
corresponding extent.
The Insurer has a right of
subrogation against the
Insurer for reasonable
payments made by the
Insurer on behalf of the
Insured outside the scope of
the insurance.

Not specifically mentioned.
50 Dispute Resolution
Optional reference of
disputes to ADR/mediation


Assured has right to demand
that claim submitted to a
Norwegian average adjuster
(para 5-5)


Article 28-3 + mediation
clause.

Swedish Law by Arbitration
(Clause 44)


28

2003)
2000
DTV Clauses
51 Time Bar
Claims under a contract of
Insurance are founded on
simple contract and have a
limitation period of six
years. The Unfair Contract
Term Acts 1977 does not
extend to insurance
contract.

Claims under a contract of
Insurance are founded on
simple contract and have a
limitation period of six years.
The Unfair Contract Term
Acts 1977 does not extend to
insurance contract.

5-24. Limitation
The assureds claim for
compensation becomes time-
barred after three years. The
limitation period commences
at the end of the calendar
year during which the
assured acquired the
necessary knowledge of the
facts on which the claim is
based. The claim becomes
time-barred in any event at
the latest ten years after the
end of the calendar year
during which the casualty
took place.
Under a liability insurance,
the insurers liability
nevertheless does not
become time-barred before
the time when the claim
against the assured becomes
time-barred.
In all other respects the rules
contained in the Limitations
Act of 18 May 1979 no. 18
shall apply. The limitation
period stipulated in the first
sub-paragraph, third
sentence, may not be
extended under section 10 of
the said Act.

A marine insurance Contract
is maritime and laches
applies. The period
commences to run from the
date of the breach of the
contract.

Art 28-4 Any actions
under this insurance
policy shall be barred at
the end of two years

To avoid losing his rights, an
Insured who intends to claim
indemnity must notify the
Insurer of his claim in
writing within six months
after becoming aware that a
claim can be made. All
rights to indemnity lapse
after ten years from the date
when the claim arose,
whether or not the Insured
had by then become aware
of his claim.
Where the Insurer has
requested the Insured in
writing to submit his claim
to an Average Adjuster for
decision within a certain
time not less than six months
from receipt of the request,
and the Insured has not
complied with the request,
he loses all rights to
indemnity.

Chapter XI 48 ADS
Prescription

All claims under an
insurance contract become
timebarred after 5 years. The
period of prescription begins
at the end of the year in
which the insurance expired
or during which the loss of
an overdue vessel is
presumed in accordance with
section 72.

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SALIENT FEATURES OF INTERNATIONAL HULL CLAUSES (01/11/03) AND OTHER HULL FORMS

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