Transcript jgb agm 2000

Marine Builders’ Risks – 08.11.13
Knut M. Finckenhagen
Vice President, Gard AS
The Nordic Association of Marine Insurers
Imaging waking up in the morning, putting
on your slippers and walking out in the
kitchen to put on the kettle ...
... then you look out the window to see what
the weather is like ...
The Nordic Association of Marine Insurers
The Nordic Association of Marine Insurers
Today’s topics
A brief look at the international shipbuilding market
The need for buying Builders’ risks insurance
Builders’ risks insurance
◦ Cover
◦ NMIP, Chapter 19
Case study – Westland Shipyard vs. SMIL
The Nordic Association of Marine Insurers
A brief look at the shipbuilding market
Asia on the move
Global orderbook by cgt – 2013
(Sept. 2013)
40 %
35 %
30 %
25 %
20 %
15 %
10 %
5%
0%
Europe
Japan
South Korea
The Nordic Association of Marine Insurers
China
Other Asia
Others
World shipbuilding supply & demand
The Nordic Association of Marine Insurers
The need for buying Builders Risks insurance
The Nordic Association of Marine Insurers
Builders’ Risks Insurance
o
Builders’ risks insurance which covers newbuildings,
from “keel laying” to delivery, including sea trials.
o
Insurance coverage of conversions and rebuilding
The Nordic Association of Marine Insurers
Wordings
Standard wordings on “all risk” basis
ICBR 1/6/88 - Institute Clauses for Builders’ Risks
The Nordic Marine Insurance Plan of 2013, Ch. 19
Local wordings:
− Dutch Bourse Policy for Construction Risks 1947 (1995)
− German Marine Insurance Conditions for Shipbuilding
Risks 1998 (amended 2004)
− American Institute Builder’s Risk Clauses
Marcar 1/9/07 – “New” English builders risks clauses
We have a Plan!! Providing cover……….
Place of insurance (19 – 5)
o
In the builder’s yard
o
Other premises?
o
What about transports?
The Nordic Association of Marine Insurers
What is included in the coverage (19 – 9)
o
The ”subject matter insured” itself
o
The cost of planning and drawings
o
Components, equipment and materials delivered and
while at the yard’s premises
o
Buyers equipment/material delivered and while at the
yard’s premises (OFE)
o
Bunkers and lubricating oil on board (sea trials)
o
Bunkers Blue Card (BBC)
The Nordic Association of Marine Insurers
Insurable value (19 – 10)
FCV – Final Contract Value
o
Construction work
o
Additional work (changes)
o
Owner Furnished Equipment (OFE)
o
Yard profit
The Nordic Association of Marine Insurers
Insurance period (19 – 2)
When does the insurance really starts?
o
Keel laying
o
Signing of the contract
o
‘First cutting of steel’
o
Value exposure at the yard
o
Start of engineering work
o
At launching
The Nordic Association of Marine Insurers
Insurance period (19 – 2) cont.
When does the insurance stops?
o Time of delivery as per the Shipbuilding Contract
o Delivery to buyer at a specific agreed location
What about extensions?
o Automatic extension at additional premium
The Nordic Association of Marine Insurers
The cover – Nordic Plan
Perils covered (all risk basis)
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
◦
Physical loss & damage
Faulty design
Launching
Removal of wreck
Collision liability
Protection & Indemnity
Total loss
Sea trials
Escalation
Towage
War risk
The Nordic Association of Marine Insurers
(19 - 14)-(ch. 12)
(19 – 15)
(19 – 18)
(19 – 19)
(19 – 20)
(19 – 20)
(19 – 11)
(19 – 5)
(19 – 7)
(19 – 27)
(19 – 30)
Additional premium creators
Value increase/decrease
Period extensions/early delivery
Tows
Delay insurance
Guarantee periods
Delivery voyages
War insurance (from waterborne)
Let us hope the insurance will be a success!!!!
Launching at Niestern Sander - 2008
The Nordic Association of Marine Insurers
…….a success for whom???
The Nordic Association of Marine Insurers
Case study – Westland Shipyard vs. SMIL
Situation
o Westland subcontract paintwork of potable water tanks
to Goodpaint AS
o Goodpaint AS is adding thinner to the paint
o Remove paint and repaint the potable water tanks
o Westland have builders risk policy in force with SMIL
o Newbuilding insured under NMIP 1996 (version 2010)
o Claim submitted: NOK 5mill.
Evaluation
o Claim recoverable (fully or partially) or not?
o Refer to clauses in NMIP to support your answer
The Nordic Association of Marine Insurers
Main issues to consider
o
Damage?
o
Peril - causation?
o
Loss recoverable?
The Nordic Association of Marine Insurers
The Nordic Association of Marine Insurers