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Singapore War Risks Insurance Conditions

Home > Singapore War Risks Insurance Conditions

About Singapore War Risks Insurance Conditions (SWRIC)

The Singapore War Risks Insurance Conditions (SWRIC) aims to bridge coverage gap, simplify and update existing maritime war risks insurance.

SWRIC was established with support from the Singapore Shipping Association. The Conditions was launched on 22 January 2019, by Dr. Lam Pin Min, Former Senior Minister of State, Ministry of Transport & Ministry of Health.

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Last update: v1.0, 22 January 2019

1 Perils

1-1 Perils insured against

The Association shall cover the Members losses, liabilities, costs or expenses as described in 2 below arising from an event caused by: 

1-1.1    war, civil war, revolution, rebellion, insurrection, armed conflicts and war-like conditions or any hostile act by or against a belligerent power,

1-1.2    the use of any weapon of war during military exercises or derelict mines, torpedoes, bombs or other derelict weapons of war,

1-1.3    capture at sea, seizure, arrest, restraint or detainment by any foreign state power and the consequences thereof or any attempt thereat,

1-1.4    pirates, terrorists, violent theft, barratry, or any person acting in pursuit of a political, religious or ideological objective,

1-1.5    strikers, locked out workmen, or persons taking part in labour disturbances, riots or civil commotions,

1-1.6    measures taken by state authorities to prevent or limit any threat to people, property or the environment provided that such threat was caused by an insured peril,

1-1.7    confiscation or expropriation by foreign state power;

Foreign state power means any state or supra- state power other than the state in which the insured vessel is registered or where the major ownership interests are located,

1-1.8    the use or operation, as a means of inflicting harm, of any computer, computer system, computer software program, malicious code, computer virus or computer process or any other electronic system.              

1-2 Excluded perils

The Association shall not cover the Members losses, liabilities, costs or expenses arising from an event caused by:

1-2.1    any detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter, hereinafter called a nuclear weapon of war,

1-2.2    the outbreak of war (whether there be a declaration of war or not) between any of the following countries: United Kingdom, United States of America, France, the Russian Federation, the People’s Republic of China,

1-2.3    requisition or pre-emption,

1-2.4    capture seizure arrest restraint or detainment by or under the order of the government or any public or local authority of the country in which the vessel is owned or registered,

1-2.5    arrest restraint or detainment by reason of infringement of any safety, quarantine, customs or trading regulations,

1-2.6    the operation of ordinary judicial process, failure to provide security for any debt unrelated to any claim under this insurance or to pay any fine or penalty,              

1-2.7    perils covered by the RACE II Clause, that is: 

  • ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of  nuclear fuel
  • the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear  assembly or nuclear component thereof
  • any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter
  • the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter. The exclusion in this sub-clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes
  • any chemical, biological, bio-chemical, or electromagnetic weapon.

1-3 Sanctions

This Clause shall be paramount and shall override any other clauses inconsistent therewith

1-3.1    No insurer shall be deemed to provide cover and no insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit may expose that insurer or his reinsurers to any sanction whether primary or secondary, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, the United Kingdom, the United States of America, France, the Russian Federation, the People’s Republic of China or any State where the insurer or his reinsurers have their registered office or permanent place of business.

1-3.2    In the event of the subject-matter insured having been engaged or engaging in any activity whatsoever that may expose the insurer or his reinsurers to any sanction whether primary or secondary, prohibition, restriction, law or regulation as described in sub-clause 1 above, the insurer shall be entitled to terminate the insurance by giving 14 days’ notice. Termination also applies to the rights of the mortgagee, but the insurer shall immediately notify the mortgagee of the termination.

1-4 Events deemed to be caused entirely by war perils

For the avoidance of doubt the following events and resulting losses, liabilities, costs and expenses shall always be deemed to have been caused entirely by war perils and covered by the Association without any right of recourse against any other insurer:

1-4.1    physical damage including total loss of the vessel caused by the direct impact of any weapon of war,

1-4.2    acts of pirates, mutineers, barratry and violent theft,

1-4.3    the presence on board of persons who illegally take over the command and control of the vessel’s operations from the master and crew.

1-5 Combination of war and marine perils

If an insured event has been partly caused by marine and partly by war perils, the allocation of losses, liabilities, costs and expenses between the Association and any of the vessel’s marine risks insurances that cover the same loss, liabilities, costs or expenses shall follow the rules, law and jurisdiction of the relevant insurance against marine risks.

1-6 Events caused either by war or marine perils

If it is not possible to establish whether marine or war perils was the most likely cause of an event then the allocation of losses, liabilities, costs and expenses between the Association and any of the vessel’s marine risks insurances that cover the same loss, liabilities, costs or expenses shall follow the rules, law and jurisdiction of the relevant insurance against marine risks.

1-7 Difference in conditions guarantee

If the Member has given notice of and the Association has agreed to register the set of war conditions that applied to the insured vessel immediately prior to the date of first entry, the Association will cover losses, liabilities, costs and expenses that are covered under those conditions notwithstanding that such loss, liability, cost or expense is not covered under these conditions.

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2 Insured events, losses, liabilities, costs and expenses

2-1 Insured Events

Subject to the agreed limits, deductibles and to the exclusions in these insurance conditions the Association shall cover:

  • Loss of or physical damage to the insured vessel ­– 3 below 
  • General Average, Salvage and Sue and Labour – 4 below 
  • Liabilities arising out of any collision or contact with any other vessel or any fixed or 

floating object – 5 below

  • Loss of earnings and additional costs of deviation or delay – 6 below
  • Liabilities, costs and expenses arising in direct connection with the operation of the vessel,  P&I liabilities – 7 below 
  • Employer liabilities to crew – 8 below

2-2 Limits and sums insured

2-2.1    An amount equal to at least 80% of the vessel’s market value shall be agreed as the insured value and sum insured in respect of 3 below, Hull and Machinery insurance. 

2-2.2    In addition, the Member may insure an amount in respect of Increased Value/Freight Interest against total loss only up to an additional 30% of the market value.

2-2.3    The limit of the Association’s liability for each of the sections 4, 5 and 7 below shall be an amount equal to the insured value/sum insured under 3 below, Hull and machinery Insurance. If collision liabilities under 5 exceed this limit the excess amount may be claimed under 7 as a P&I liability. 

2-2.1    Unless stated otherwise in the insurance contract, cover for loss of earnings shall be for 180 days excess of 7 and the daily indemnity shall be calculated on an “open basis” in accordance with the rules in 6 below. If the vessel becomes a total loss any amount paid in respect of loss of earnings shall be deducted from the amount due in respect of total loss only insurance.

2-2.5    The sum insured and limit of the Association’s liability under 8, Employers liabilities, shall be agreed and stated in the insurance contract. If no limit is stated then the Associations liability shall be limited to the legal liability of the Member to each crew member on board the vessel at the time of the casualty.  

2-3 Agreed values 

2-3.1    Unless the insurance documentation clearly indicates otherwise the agreed sums insured or values stated in the insurance documentation shall be fully insured and shall be binding on the Association unless the Member or its broker has fraudulently or grossly negligently given misleading information about matters relating to the value of the vessel or its earnings.

2-3.2    General average, salvage and sue and labour are payable in full notwithstanding that the sum insured for Hull &Machinery, 3 below, is less than the market or contributory value of the vessel. 

2-4 Recovery in excess of the sums insured 

The Association shall cover amounts in excess of the sums insured that relate to:

2-4.1    costs in connection with settlement of any claim,

2-4.2    costs of measures necessary to preserve the insured vessel incurred after a casualty that gives rise to a claim for total loss in accordance with 12-2.4,

2-4.3    costs of providing security,

2-4.4    interest on claims in accordance with 11-5,

2-4.5    legal costs of establishing whether any loss, liability, cost or expense is covered by war or marine perils.

2-5 Other insurance 

Subject to the provisions in 1-4 the Association shall not cover losses, liabilities, costs or expenses that the Member is able to recover under any other insurance.  

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3 Loss of and physical damage to the insured vessel, Hull and Machinery insurance

3-1 Total loss

The Member may claim for total loss:

3-1.1    if the vessel is lost at sea without any reasonable prospect of recovery

              or

3-1.2    the vessel is missing for a period of 60 days from the date of the last reported communication. If before expiry of the time-limit is clear that the Member will not recover the vessel, he may at once claim for a total loss

              or 

3-1.3    if casualty damage after the vessel is in a position of safety is estimated to exceed 100% of the insured value for Hull and Machinery insurance. Casualty damage shall include all unrepaired damage reported to and surveyed by the Association. The cost of repairs shall include all costs of removal and other ancillary costs that can be anticipated at the time the member submits the claim for a total loss. However, this shall not include costs of salvage awards or possible compensation for depreciation for incomplete repairs.

3-2 The Member may also claim for a total loss

If the Member is deprived of the free use of the vessel for period of 6 months or if becomes clear that the Member will not recover the vessel;

3-2.1    due to a peril named in 1.1.3, 1.1.4 or 1.1.7

              or

3-2.2    because it is unable to leave any port, place or limited area due to any physical obstruction caused by an insured peril

              or

3-2.3 because it has remained in a location in accordance with instructions given by the Association.

3-3 Salvage operations 

If the vessel is in need of salvage the Association may:

3-3.1    limit its liability for future salvage operations by declaring that it will pay the sum insured under Hull & Machinery insurance and Increased Value/Freight Interest insurance if any

              or

3-3.2    attempt to salvage the vessel at its own expense and risk. If the salvage operation is not completed within six months from the date the Association was notified of the casualty, the Member may claim compensation for a total loss.

3-4 Repair of a vessel that is a total loss

Notwithstanding that the vessel is a total loss under 3-1.3 the Member may claim the cost of carrying out repairs in accordance with 3-5 below up to the sum insured under the Hull & Machinery insurance. 

3-5 Damage to the vessel

If the vessel is damaged without the conditions for claiming a total loss being satisfied the Member may carry out repairs and be indemnified by the Association in accordance with the rules in the set of insurance Hull & Machinery conditions against marine risks that have been registered and agreed with the Association or if no set of Hull &Machinery insurance conditions against war risks has been registered with the Association then in accordance with the rules in Chapter 12 of the version of the Nordic Plan 1996 in force at the time of the casualty.

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4 General Average, Salvage and Sue and Labour

4-1 Main rule

If a casualty or other event caused by an insured peril has occurred or threatens to occur the Association shall cover losses, liabilities, costs and expenses, resulting from measures taken for the purpose of preventing or mitigating claims against the Association provided such measures are of an extraordinary nature and reasonable. 

4-2 General Average

4-2.1    The Association shall cover all losses, liabilities costs and expenses arising out of an insured events that are recoverable as general average under the York Antwerp Rules 2016 in accordance with the applicable contract of affreightment.

4-2.2    The Association shall also cover the Members liability to pay any salvage award that is not recoverable in general average.

4-2.3    Assumed general average,

the Association will also cover all losses, liabilities, costs and expenses incurred for the purpose of saving a ship in ballast or completing a voyage in ballast provided that they would have been recoverable under this insurance if cargo had been on board at the time of the insured event.

4-2.4    If the object insured has been damaged or lost as a result of a general average act, the Member has the right to claim compensation for such damage or loss in accordance with the rules relating to particular average 3-5 above.

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5 Collision Liabilities

5-1 Main rule

The Association shall cover the liabilities of the Member and associated costs and expenses resulting from any collision or contact between the vessel and any other vessel or fixed and floating object. 

5-2 Exclusions

Irrespective of the terms of any charterparty or contract entered into by the Member, the Association shall not cover liability to charterers or others who have an interest in the vessel unless the party concerned has been accepted as a named co-assured under this insurance.

5-3 Cross Liabilities

If the Member has incurred liability and is entitled to make a claim against the injured party for a loss which the Member himself has arising from the same event, the settlement of the claim between the Member and the Association shall be based on the calculated gross liabilities before any set-off is effected. This applies even if one or both liabilities are limited in the settlement between the Member and the injured party. If the limitation is applied to the balance between the liabilities of the Member and the injured party, the largest calculated gross liability shall in the settlement of the claim between the Member and the Association be reduced by the same amount by which the balance has been reduced.

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6 Loss of earnings and additional costs of delays and deviations 

6-1 Main Rule

The Association shall cover the Member’s loss due to the vessel being deprived of earnings as a consequence of:

6-1.1    physical damage to the vessel other than total loss that is recoverable under section 3 above,

6-1.2    detention or detainment or the inability of the vessel to leave any port, place or limited area or freely navigate due to the operation or threat of the operation of an insured peril other than strikes, lockouts or labour disturbances,

6-1.3    any physical obstruction caused by an insured peril,

6-1.4    measures taken to salvage or remove cargo that has been damaged by an insured peril,

6-1.5    an event that gives rise any claim in general average provided such event has been caused by an insured peril,

6-1.6    compliance with the instructions of the Association or the government of the Republic of Singapore to remain in any location or to deviate from a planned voyage.

6-2 Extra costs incurred to prevent loss of income

The Association shall cover extra costs and expenses reasonably incurred by the Member to prevent loss of earnings that would have been recoverable under this insurance.  

6-3 Indemnity

6-3.1    The member’s loss shall be calculated on the basis of the daily earnings of the applicable contract of affreightment less any costs that the member has saved or ought to have saved due to the vessel being out of regular employment. If the vessel is not operating under a contract of affreightment the freight per day shall calculated on the basis of the average freight rates for vessels of the same type and size and trade during the period in which the vessel is deprived of income.

6-3.2    Time during which the vessel is unable to earn income shall be calculated in days, hours and minutes. Time during which the vessel is partly prevented from earning income shall be converted into a corresponding period of total loss of income.

6-3.3    In the event that that the vessel becomes a total loss any amount paid in respect of loss of earnings shall be deducted from any payment under any Increased Value/Freight Interest insurance ref. 2-2.2 above.  

6-4 Survey of damage

The provisions of 3-5 apply correspondingly.

6-5 Choice of repair yard 

6-5.1    The Association may require that tenders for repairs be obtained from repair yards of its choice. If the member does not obtain such tenders the insurer may do so

6-5.2    If, due to special circumstances, the Member has reasonable grounds to object to the repairs being carried out by one of the repair yards that has submitted a tender, he may require that the tender from that yard be disregarded

6-5.3    The Member shall decide which yard is to be used. However, the liability of the Association shall be limited to the loss of time under the tender that would have resulted in the least loss of time among the tenders for which the member would be able to claim full compensation under 3.5 above. If the member chooses this repair yard, the claim shall be settled on the basis of the actual time lost, even if this is greater than that specified in the tender. 

6-6 Removal to the repair yard, etc.

6-6.1    Loss of time during removal to the repair yard shall be attributed to the category of repairs that necessitated the removal

6-6.2    If removal to the repair yard was necessary for more than one category of repairs, the removal time shall be apportioned in accordance with the time that each category of work would have required if carried out separately. Removal time that falls within the deductible period shall not be apportioned

6-6.3    The rules of sub-clauses 1 and 2 shall also apply to loss of time during surveys, while obtaining tenders, during tank cleaning, while waiting to commence repairs or due to other similar measures that were necessary to carry out the repairs.

6-7 Extra costs incurred in order to save time

6-7.1    The Association shall be liable for extra costs incurred in connection with temporary repairs and in connection with extraordinary measures taken in order to avert or minimise loss of time covered by the insurance, insofar as such extra costs are not recoverable from the hull insurer.

6-7.2    The insurer shall not, however, be liable for such costs in excess of the amount he would have had to pay if such measures had not been taken.

6-7.3    The Member shall bear a share of the extra costs that is proportionate to the time saved for the member’s account.

6-8 Simultaneous repairs

6-8.1    If repairs covered under this insurance are carried out simultaneously with work which is not covered under any loss of hire insurance, but which:

  • is carried out to fulfil classification requirements, 

                  or

  • is related to the reconstruction of the vessel,

                  or

  • is necessary to enable the vessel to meet technical and operation safety requirements or perform its contractual obligations,

the Association shall pay compensation for half of the time common to both categories of repair in excess of the deductible period.

6-8.2    If repairs resulting from two casualties, both of which are covered under this insurance, are carried out simultaneously, the rule in sub-clause 1 shall apply correspondingly to the time that is within the deductible period of one casualty, but not within the deductible period of the other casualty.

6-8.3    If repairs covered under this insurance and work covered under other loss of hire insurance are carried out simultaneously, the Association shall pay compensation for half of the repair time common to both categories of work in excess of the deductible period. This also applies where repairs under the other insurance contract are carried out within the deductible period under this insurance contract. Furthermore, if work which is not covered under any loss of hire insurance but which falls within the scope of sub-clause 1 is carried out simultaneously, the Association shall only pay compensation for one fourth of the common repair time which exceeds the deductible period.

6-8.4    When applying the rules set out in sub-clauses 1-3, each category of work shall be deemed to have lasted for the number of days the work would have required if each category of work had been carried out separately, reckoned from the time the work started. Unless the circumstances clearly indicate another point in time, all categories of work shall be deemed to have started on the vessel’s arrival at the yard. Any delay which might occur due to several categories of work being carried out simultaneously shall be attributed to all categories in proportion to the number of days each category would have required if carried out separately, reckoned from the time the work started. However, the insurer’s liability shall not exceed the amount that would have been payable if the category of work for which he is liable had been carried out separately.

6-9 Loss of time after completion of repairs

6-9.1    After repairs have been completed, the insurer shall only be liable for loss of time:

  • until the vessel can resume the voyage or activity that it was engaged in under the contract of affreightment that was in force at the time of the casualty,
  • until vessels which are employed in liner trade or in another way follow a fixed route or operate in a defined geographical area can resume their activity,
  • while the vessel sails to the first port of loading under a contract of affreightment that was entered into with binding effect prior to the casualty,
  • until passenger vessels can resume their activity, but for a period not exceeding fourteen days.

6-9.2    Removal to the repair yard, 6-6 above shall apply correspondingly to loss of time after completion of repairs.

6-10 Repairs carried out after expiry of the insurance period

The insurer shall not be liable for loss of time resulting from a stay at a repair yard that commences more than one year after expiry of the insurance period.

6-11 Liability of the insurer when the vessel is transferred to a new owner

6-11.1 When damage to the vessel is repaired in connection with a transfer of ownership, the insurer shall not be liable for time that would in any event have been lost in connection with the said transfer. If the transfer has to be postponed due to repairs covered by this insurance, the insurer shall be liable for the Member’s loss of interest in accordance with the rules in 11-5 even though the vessel would not have earned income during the postponement.

6-11.2 The insurer’s liability pursuant to sub-clause 1 shall not exceed the compensation calculated on the basis of the sum insured per day and the period of time by which the transfer was postponed, the time it must be estimated that the buyer will take to repair the vessel, less the agreed deductible period for this insurance. The deductible period is calculated in consecutive days even if the loss of interest differs from the sum insured per day. No compensation may be claimed under 6-9 in these cases.

6-11.3 The Member ‘s claim against the insurer may not be transferred to a new owner.

6-12 Relationship to other insurances and general average

The rules in 12-1 of this insurance as to subrogation shall apply correspondingly to:

  • the Member’s right to claim compensation for loss of time and operating costs during removal to a repair yard in accordance with the rules in the vessel’s Hull & Machinery insurance

                  and

  • any right the Member might otherwise have to claim compensation for the loss from another insurer or in general average.

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7 P&I liabilities

7-1 The Association shall cover loss, liabilities, costs and expenses that are covered by the vessel’s P&I entry with a P&I club that is a member of the International Group of P&I clubs provided that such loss, liability, cost or expense has been caused by:

  • a peril in 1-1 above 

                  or

  • a peril that is defined as a war peril in Appendix IV to the Pooling Agreement of the International Group of P&I clubs, as it reads at the time this insurance contract was entered into

7-2 If the vessel’s P&I insurance against marine perils has not been taken out with one of the members of the International Group of P&I clubs the Associations obligations to the Member in accordance with 7-1 above shall be determined as if the vessel had been entered for P&I risks with the Standard P&I club.

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8 Employers liabilities

8-1 In accordance with law or collective bargaining agreement

If the Member is required by applicable law or collective bargaining agreement to effect insurance against death or disablement of crew the Association shall cover the Members liabilities in accordance with the terms of the applicable law or collective agreement.

8-2 Additional benefits

The Association will also cover additional crew benefits to the extent that the rules governing such benefits have been registered with and agreed by the Association. 

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9 Period of insurance, automatic termination of cover, notice of cancellation, constitution of additional premium areas

9-1 Inception and expiry of the insurance

The time for inception and expiry of the insurance shall be stated in the insurance documentation issued or approved by the Association.  

9-2 Termination and cancellation of the insurance

  • The insurance shall automatically terminate in the event of:
  • war or war-like conditions breaking out between any of the United Kingdom, the United States of America, France, the Russian Federation, the People’s Republic of China, the insurance against war perils shall automatically terminate

              or

  • any use of nuclear arms for war purposes.

9.2.2    The Association may give notice of cancelation of this insurance by giving a minimum of 7days notice to Members, such notice to commence at midnight of the day on which notice was given. Cover will however be reinstated subject to agreement between the Association and the Member prior to the expiry of the notice as to new premium/contribution rates, new conditional or excluded areas or any other revised terms and conditions.

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10 Claims handling and settlement – duties of the Member

10-1 Duty of the Member to give notice and time bar

10-1.1 Notice of claims

The Member shall give prompt notice of any circumstance that is likely to give rise to a claim under this insurance. 

10-1.2 Time limit for giving notice

Subject to the Board’s discretion the Member shall lose the right to compensation for any claim that has not bee notified to the Association within one year from the time that the member was aware of the circumstances that form the basis of the claim or in the case of any claim for reimbursement of losses, liabilities, costs or expenses within one year from the date of discharge or settlement of the same.  

10-1.3  Six (6) year time bar

The Member’s claim shall be time barred 6 years after the occurrence of the events that gave rise to the claim against the Association. Under a liability insurance, the insurer’s liability nevertheless does not become time-barred before the time prescribed by the rules that apply to the assured’s liability.

10-2 Duty of the Member to document claims and enable the Association to defend claims against the Member or pursue claims by the Member against third parties

10-2.1 Information and documents

The Member shall as soon as reasonably possible provide all information and documents necessary to enable the Association to determine whether the claim is covered by the terms of this insurance and the correct amount due to the Member. 

10-2.2 Defence of claims against the Member

In the case of liability claims the Member shall take all steps necessary to enable the Association to manage the claim on behalf of the Member. If litigation has been commenced against the Member, the Member shall fully inform, consult and cooperate with the Association in all matters relating to the litigation. 

10-2.3 Recourse against third parties

The Member shall provide all necessary information and documentation and take all necessary steps to enable the Association to pursue claims against any third party that might be liable to the Member for losses liabilities costs or expenses that have been covered by the Association.  

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11 Claims handling and settlement – duties of the Association 

11-1 Emergency response

The Association shall ensure that the Member has access to 24/7 emergency response capabilities manned by capable personnel with ability to communicate directly with the Member’s office and with any insured vessel at any time. 

11-2 On receipt of notice

On receipt of notice of a claim the Association shall within 5 working days acknowledge receipt of the notice and shall inform the Member as far as possible about the following matters: 

  • the persons responsible for dealing with the claim including anyone dealing with any recovery against any third party,
  • what further information is likely to be needed,
  • whether it intends to appoint any surveyor, other technical expert, lawyer or adjuster,
  • what further steps if any that the Association will need to take to determine whether the claim is covered by this insurance and the correct amount to be paid to the Member.

11-3 Liability of the Association for costs incurred to establish a claim

The Association shall cover the costs of:

  • establishing the claim and calculating the compensation,
  • superintendents attending on behalf of the Member at a casualty or during repairs, ref. 3-5 above,
  • litigation and other costs associated with claims against the Member,
  • pursuing claims against third parties that might be liable to the Member for losses liabilities costs or expenses that have been covered by the Association,
  • providing security for claims against the Member arising in connection with a casualty or other insured event,

provided always that the Board in its discretion may refuse to cover costs that it regards as clearly unnecessary or unreasonable.

11-4 Interest on claims 

11-4.1     Interest on claim amounts due from the Association to the member shall accrue from the date that:

  • the Member has made any payment that the Association is liable to reimburse,
  • in the case of total loss, from the date that the member gave notice to the Association of the events that gave rise to the total loss,
  • in the case of any claim for loss of earnings, from the expiry of the period of detention or delay that forms the basis of the Members claim.

11-4.2     Interest shall not run if final settlement of the claim is delayed because the Member fails to provide information or documents or refuses to accept a valid partial or total settlement.  

11-4.3     The rate for calculating interest accruing during each calendar year shall be the 12-month ICE LIBOR for the currency in which the adjustment is prepared, as announced on the first banking day of that calendar year, increased by two percentage points. If the adjustment is prepared in a currency for which no ICE LIBOR is announced, the rate shall be the 12-month US Dollar ICE LIBOR, increased by two percentage points. In no case shall the interest rate be less than 2%.

11-4.4     After the due date ref. 11-4.1 the rate of interest shall be a further 2% above the rate in 11-4.3 above.  

11-5 Duty of the Association to make payments on account

11-5.1 Reimbursement of covered costs and expenses 

Unless it has reasonable grounds to believe that a claim is not covered under this insurance the Association shall make a payment on account if the member has incurred or will incur expenses that are covered under this insurance. The Association will either reimburse such expenses after payment or if they have not been paid by the Member may pay the third party concerned directly. 

11-5.2 Loss of earnings 

In the case of claims for loss of earnings the Association will make payments on account for an amount equal to 80% of an indemnity for 30 days payable within 5 working days of the expiry of each insured period that generates a claim for 30 times the daily indemnity. 

11-5.3 A payment on account is not binding on the Association

A payment on account by the insurer in no way affects the question of his liability to the assured.

11-5.4 Disputes as to which insurer is liable

 If it is clear that a claim for loss of or damage to the vessel is either covered under this insurance or under the vessel’s H&M insurance against marine perils the Association shall make a payment on account that is proportionate to the relationship between the amount payable under this insurance and the insurance against marine risks. Before such payment is made the Association may require that the Member provides appropriate security to the Association in the member’s claim against the marine H&M insurers.    

11-6 Disputes about the adjustment of a claim

If the Member does not agree with the final adjustment of a claim it may require that the claim be submitted to an independent average adjuster to be agreed with the Association. If the Association and the Member cannot agree the parties will refer the choice of adjuster to the Chairman of the Association of Average Adjusters UK.

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12 Claims handling and settlement – rights of the Association on payment of a claim 

12-1 Subrogation against third parties 

Upon payment of any claim to the Member the Association shall be subrogated to any right that the Member might have to claim the loss, liability, cost or expense covered by the Association from any third party 

12-1.1 If the Association is only partly liable for the member’s loss, liability, cost or expense the claim against the third party shall be divided proportionately between the Association and the Member. The same applies if compensation for the full loss, liability cost or expense would be a higher amount if paid by the third party than under this insurance, but the third party is only liable for part of the loss, or the entire amount of loss is not recoverable. 

12-1.2 If the Associations claim against the third party produces a higher net amount than it has paid to the Member with the addition of interest, the excess amount shall accrue to the Member.

12-1.3 The Association’s liability under this insurance shall be reduced by an amount equal to that  which it is prevented from collecting because the Member has waived it’s right to claim damages from a third party, unless the waiver may be considered customary in the trade in question, or was given in accordance with directions issued by the Association. See also 10-2.2 and 10-2.3.

12-2 Right of the Association to the insured vessel after payment of a claim 

12-2.1 The Association is entitled to deduct from any settlement any residual value in the vessel or any part thereof that has been or will be realised by the Member. If no such deduction has been made, the Association upon payment of compensation for damage or total loss shall be subrogated to the Member’s rights in the object insured or such parts of the object insured as it has indemnified, unless the Association no later than the time of payment waives this right.

12-2.2 Upon payment of a total loss if the Association so requires the Member shall furnish the Association with title to the object insured and hand over all documents that are material to Association as owner. Costs incurred in this connection shall be borne by the Association 

12-2.3 In the event of damage, if the Association is only partly liable for the damage to the part the residual value of the damaged part shall be apportioned between the Association and the Member in proportion to the amount of loss each has carried 

12-2.4 After making a claim for total loss and until such time as the Association has given notice of whether it intends to take over ownership of the vessel the Member shall continue to take all reasonable measures to preserve the insured vessel. The Association shall reimburse the costs involved. The Association shall give notice without undue delay. 

12-2.5 If the Member, for the purpose of limiting liability to third parties, has to abandon the vessel, this may be done irrespective of the Associations rights.

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13 Duty of the Member to pay sums due to the Association

13-1 Advanced, additional premium areas and supplementary contributions (premiums)

The Member shall pay the advance contribution (premium) that has been fixed by the Board and agreed prior to the inception or renewal of the insurance. The Member shall also pay supplementary calls, additional premiums for trading or transits in additional premium areas (currently Association Rules 16, 18 and 26) or any other payment as determined by the Board in accordance with the Association Rules. 

13-2 Interest on overdue payments

If any payment is not made on the due date the Association may charge interest on the outstanding amount at the rate that has been fixed by the Board.

13-3 No set off against amounts payable by the Association

The Member shall not be entitled to make any set off or to delay payment of any advance or supplementary contributions against any amount due to be paid by the Association to the Member.  

13-4 Cancellation for non-payment

If the Member has not paid any amount due to the Association on the due date the Association may cancel the insurance by giving 10 working days notice. 

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14 Other duties of the Member 

14-1 Disclosure and fair presentation

Notwithstanding 15-3 or whether any other law and jurisdiction has been agreed the duty of the Member to disclose material facts and make a fair presentation of the risk to the Association shall be governed by the terms of the United Kingdom Insurance Act of 2015 in so far as that act applies to non-consumer contracts and nothing in these conditions or the Rules of the Association shall be taken to vary or contract out of the provisions of the Act.                

14-2 Change of risk

14-2.1 Duty to inform the Association 

The member has a duty to inform the Association within 10 working days when it has become aware that there has been a change in circumstances that have been agreed in the insurance documentation as forming the basis for the Association’s acceptance of the risk.

14-2.2 Rights of the Association on receiving notice 

On receipt of such notice the Association may give 10 working days notice that it will withdraw cover or charge an additional premium from the time of the change or impose other conditions for maintaining cover.

14-2.3 Breach of the member’s duty 

If the Member fails to give notice of a change of risk as required by 14-2.1 the Association may require that it be put in the same position as it would have been in if timely notice had been given but the Association may not reject liability for any loss that has not been caused by the change of risk. 

14-3 Safety regulations

14-3.1 Definition

 A safety regulation refers to written contractual provisions agreed been the Association and the Member whereby the Member undertakes to carry out measures that are intended to reduce the risk of losses that would be covered by the Association.

14-3.2 Consequences of breach

The Association shall not be liable for any loss, liability cost or expense which has been caused by a Member’s negligent breach of a safety regulation.   

14-4 Duty to avert or mitigate loss 

Whenever circumstances arise that threaten to cause or have caused any loss, liability cost or expense that would be recoverable from the Association under the terms of this insurance the Member shall take all reasonable measures to avert or mitigate the consequences for the Association. The member shall inform and consult with the Association as soon as practically possible.     

14-5 Deliberate or reckless conduct  

The Association shall not be liable if for loss, liability, costs or expenses that arise from actions of the Member taken with the deliberate intention to cause or reckless disregard for, the consequences for the Association.

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15 Contract administration – the Association and its members

15-1 Parties to the contract

The parties to this insurance contract are the Singapore War Risks Mutual Association as Insurer and its Members as assured. It is entered into on the basis that the assured has become a Member of the Association by entering vessels for insurance and that the Member has agreed to be bound by the Articles of the Association and any decision of the Board made in accordance with those Articles. 

15-2 Omnibus

The Association may in its absolute discretion and in accordance with the rules and procedures set out in the Association’s Articles of Association, accept any claim that is or may be excluded under the terms of these conditions, or waive any breach of duty by the member or any other grounds for denying a claim.  

15-3 Arbitration, law and jurisdiction 

15-3.1 Singapore arbitration, law and jurisdiction

Subject to 1-5 and 1-6 any dispute between the Association and a Member shall be subject to arbitration in Singapore and to the law and exclusive jurisdiction of the State of Singapore. 

15-3.2 Exclusion of the Marine Insurance Act 1906

Irrespective 15-3.1 above or of the law and jurisdiction agreed in the insurance documentation the United Kingdom Marine Insurance Act 1906 shall not apply as background law to this insurance except for the following.

Ss. 1-16 Definition of marine insurance and Insurable Interest

S. 32 and 80 Double Insurance

S. 55 Included and excluded losses

S. 77 Successive losses

S. 81 Effect of under insurance

S. 84 Return for failure of consideration 

15-3.3 Background law for the application of terms and conditions incorporated by reference into this insurance

Any part of the United Kingdom Marine Insurance Act 1906 may be taken into account as background law whenever this is necessary for the application of any conditions that have been incorporated by reference for the purposes of 1-6, 1-7 or 3-5 of these conditions.   

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