Transcript Marine insurance law

The Nordic Marine Insurance
Plan 2013
Why, how and what does the assured get?
Professor Trine-Lise Wilhelmsen
Scandinavian Institute of
Maritime Law
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Why?
o Background: The international picture
o Several attempts at harmonization
o No success
o Why:
o Fundamental differences in
o Legal framework
o Material contractual solutions
o Contractual tradition
o National contracts competitive advantage
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Why?
o Nordic harmonization possible due to
o Common Insurance Contract Act 1930
o Common contractual traditions
o National hull conditions, but based on the
Norwegian Marine Insurance Plan
o 1964
o 1996
o Competitive advantage limited
o Maintenance of 4 national conditions costly
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How?
o The Nordic Plan Agreement
o Basis NMIP 1996, version 2010
o Follows the procedures from the
Norwegian Plan system:
o Agreed document
o Secretariat Scandinavian Institute
o Broad Commentaries
o Systematic maintenance program
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Advantages of the agreed
approach: Flexibility
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Foreseeability
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Reasonableness
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What does the assured get
o
o
o
o
o
o
A comprehensive and total product
Jurisdiction/choice of law
Scope of cover
Duties of disclosure and due care
The settlement
But: May be departed from
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A comprehensive and total product
Hull I
17 Coastal vessels
18 Offshore units
19 Builders Risks
xx Tailor made
Freight I
H&M
LOH
Common
provisions
War
Part I Chapters 1- 9: Common Provisions
Part II Chapters 10 -13: Hull
14 Hull and Freight Interest (TLO)
15 War Package
16 Loss of Hire
Part III Chapters 17 – 19
17 Coastal vessel
18 Offshore units
19 Builders Risks
Plus Additional & tailor made covers
Jurisdiction/choice of law
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Jurisdiction/choice of law
o Nordic claims leader, 1-4 (1)
o Legal proceedings before the courts in the
venue where the claims leader is located
o Based on the law of this venue
o Non Nordic claims leader, 1-4 (2)
o No regulation of jurisdiction
o ”agreed that Norwegian law shall apply”
o The coinsurers may be sued at the
venue of the claims leader, 1-4 (3)
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Scope of cover
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Perils insured against
o Perils insured, the main distinction:
o NP Cl 2-8: all risks
o ITCH/IHC: named perils
o The difference
o New perils
o Burden of proof
o The result: More foreseeability for the
assured in case of unknown risk
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Incidence of loss
o
o
o
o
The problem
NP Cl. 2-11
Starting point: Peril has struck (1)
But:
o Unknown defect (2)
o Unknown damage (3)
o Known defect/damage (4)
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Causation
o
o
o
o
The problem
The alternatives
NP Cl. 2-13: General rule, Apportionment
Why:
o Fair division of risk
o Considerations of deterrence
o Cl. 2-14; combination of war/marine
peril
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Losses covered, hull
o Starting point: Cl. 12-1; Cost of repair
o But: Some additional cover for loss of
time
o Relevant for NP Clauses
o 12-7 Temporary repair
o 12-8 Costs to expediting repairs
o 12-11 Invitation to tender
o 12-12 Choice of repair yard
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Why cover for loss of time?
The shipowner wants:
The insurer wants:
To minimize loss of time in order
to get the ship back in
employment
Cheapest possible repair
which often takes more
time
Compromise: The insurer is required to consider the assured’s
interest in averting loss of time by paying up to 20 % of insurable
value pa calculated for the time suffered or averted.
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Losses covered, hull
o Lack of maintenance, wear and tear etc
o NP Cl. 12-3:
o The part not in proper condition is excluded
o Any consequential damage covered
o Full cover for total loss/liability
o The reason: Consequential damage similar
to a casualty
o Unpredictable
o Cover secure foreseeability
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Losses covered, hull
o
o
o
o
Error in material and design, 12-4
Consequential damage covered
But not the cost of rectifying the error
Coverage for primary damage if the
part is classed
o Why:
o Similar to a casualty
o Cover provides foreseeability
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Duty of disclosure
o NP 3-1: All material facts shall be
disclosed
o NP 3-2/3-3:Fraud/negligence: void/no
liability
o Breach without fault, 3-4:
o Covered,
o but insurer may cancel
o Why: Seems reasonable
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Duty of due care, introduction
o Main goal: To obtain safety at sea and
avoid casualties
o Legal techniques
o Warranties
o Alteration of risk
o Safety regulations
o Common: Warranty of classification
o NP: Alteration of risk/safety regulation
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Alteration of risk
o The regulation
o The concept, NP Cl. 3-8 (1)
o The sanctions, Cl. 3-9 to 3-11
o In particular applied to change of
o State of registration
o manager/ technical/maritime operator
o Classification society
o UK: Warranties
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Safety regulations
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Safety regulations, concept
o NP Cl. 3-22: A safety regulation is a rule
o concerning measures for the prevention of
loss
o given by
o Public authorities
o The Classification society
o The insurer
o And is automatically included in the
insurance contract
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Safety regulations, breach
o 3-25: The insurer is freed from liability
in case the assured breaches a safety
regulation if
o The assured has acted with negligence
o There is causation between breach and
casualty
o The assured has the burden of proving no
negligence
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The settlement
o NP ch. 5 comprehensive regulation on
o Information, 5-1
o Claims adjustment, 5-2
o Interest on compensation, 5-4
o Due date, 5-6
o Subrogation, 5-13
o Time limit and limitation, 5-23/5-24.
o Etc
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Settlement: Interest on
compensation
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Interest on compensation
o NP 5-4 (1)
o On claims: starting to run 1 month after
notification sent to insurer
o On expenses: from the date of the
disbursement
o Loss of time: 1 month after expiry of the
insured period
o Why: cover assured’s loss of profit
while waiting for payment
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Interest on compensation
o NP 5-4 (2): Delay caused by the
assured: no interest
o NP 5-4 (3): CIBOR/NIBOR/STIBOR+ 2 %
o NP 5-4 (4):
o After due date interest extended with 2 %.
o Due date = 6 weeks after the date when the
claim adjustment is or should have been issued.
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Claims leader (hovedassurandør)
o NP chapter 9
o The Norwegian concept ”claims leader”
o Wide authority to act on behalf of the
co insurers:
o Approve lay up plan, 9-3
o Notifications, 9-4
o Salvage measures, 9-5
o Removal and repairs, 9-6
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Thank you for your
attention!
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