safer ships – what’s the marine underwriters’ role? francesco siccardi siccardi bregante &...

SAFER SHIPS – WHAT’S THE MARINE UNDERWRITERS’ ROLE?

Francesco Siccardi

Siccardi Bregante & C. 1

THE ROLE OF MARINE UNDERWRITERS IN SUPPORT OF THE SHIPPING INDUSTRY

- Protecting the Owner’s asset (vessel) against partial/total loss/collision and salvage liabilities through Hull & Machinery insurance;

- Protecting the Owner’s corporate assets, against liabilities arising from vessel’s trading through P&I insurance;

- Facilitating the ship financing through mortgage of the insured vessel and assignment of insurance proceeds to lending Banks.

- Contributing to safety at sea through implementation of safety rules as Cover warranties and conditions


HOW CAN MARINE UNDERWRITERS HELP PROMOTING SAFETY AT SEA

• PREVENTION OF CLAIMS

• - Condition surveys (no substandard ships)

• - Prudent underwriting policy

• - Taking part to safety rules implementation process


HOW CAN MARINE UNDERWRITERS HELP PROMOTING SAFETY AT SEA

SETTLEMENT OF CLAIMS

Compliance by the Assured of

1. Rules of Conduct (exclusions of cover)

2. International safety standards (certification) (warranties)


1. COVER EXCLUSIONS

ASSURED’S RULES OF CONDUCT

The DUAL THRESHOLD

A. Assured conduct in general

B. Assured conduct interfering with the employment or navigation


1.A ASSURED CONDUCT IN GENERAL


1.WILLFUL MISCONDUCT NOT COVEREDSect 55 M.I.A. (Marine Insurance Act)Club’s RulesSect 1900 It. Civil Code (Dolo)Norwegian Marine Insurance Plan (intentionally/gross negligence)French Hull Policy (Faute intentionelle)

2. NEGLIGENCE COVEREDThames & Mersey Marine Co Ltd.Sect 1900 It. Civil Code (Colpa)

WHAT IS WILLFUL MISCONDUCT: an act intentionally done, or a deliberate omission by the Assured, with knowledge that the performance or omission will probably result in injury, or an act done or omitted in such a way as to allow an inference of a reckless disregard of the probable consequences).

1.B ASSURED CONDUCT INTERFERING WITH THE SHIP’S EMPLOYMENT OR NAVIGATION

1.LOSS ATTRIBUTABLE TO SHIP SENT TO SEA IN UNSEAWORTY CONDITIONS WITH THE PRIVITY OF THE ASSURED

Privity: Assured’s knowledge and consent (the Eurysthenes 1976)

2. DUE DILIGENCEITCH 1983Negligence of Master etc. covered provided such loss or damage has not resulted from want of due diligence by the Assured Owners or Managers.

Due Diligence: lack of reasonable care equal to privity?

Sect 524 it Code Navigation: loss caused by negligence of Master covered provided Assured has taken no part (“privy?”).


2. COMPLIANCE WITH INTERNATIONAL SAFETY STANDARDS (WARRANTIES)

CLASS (ITCH 1.10.1983)

Vessel MUST BE CLASSED

NO CHANGE, SUSPENSION OR WITHDRAWAL OF CLASS

Non compliance: TERMINATION OF COVER


1.C HOW HAVE COVER CONDITIONS CHANGED

Privity: blind eye knowledge insufficient: need to have suspicion or belief in the vessel unseaworthiness and deliberately refraining from making enquiries

(the “Star Sea”, 2003)

ITCH 1983

… Due Diligence by the Assured, Owners or Managers

ITCH 1.10.95

…. Due Diligence by the Assured, Owners, Managers or any of their onshore management

I.H.C. 2003

Or any of their onshore management deleted


2.B. HOW HAVE WARRANTIES CHANGED

CLASS (IHC 2003) Recommendations imposed by class as to vessel’s seaworthiness to be complied with at the due date[Club Rules][French Hull Policy][NMIP]Owners to hold DOC - vessel to hold SMC [Club Rules]

MANAGEMENT (IHC 2003)

Duty of Assured/Owners Managers to comply with all

statutory requirements of vessel’s flag relating to construction,

adaptation,condition,fitment, equipment, operation or

manning

[Club Rules]

[German DTV]

BUT Non compliance: loss caused thereby not covered


CONCLUDING REMARKS

Are Underwriters reluctant to apply too strictly the rules?

Is Market not prepared to accept restriction of cover ?

How effective is the role of Marine Underwriters in promoting safety?


safer ships – what’s the marine underwriters’ role? francesco siccardi siccardi bregante &...

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