Special offshore circular no. 2/2008: War Risks Cover and US Terrorism Risk Insurance Act ("TRIA") compliance

Special Offshore Circular No. 2/2008 January 2009

TO MEMBERS OF ASSURANCEFORENINGEN GARD - gjensidig- with the following covers: 

P&I Cover of Mobile Offshore Units.

Comprehensive General Liability Insurance for Mobile Offshore Unit Operators.

Comprehensive General  and Contractual Liability Cover for Offshore and Specialist Vessels and Operations

Dear Sirs,

War Risks Cover and US Terrorism Risk Insurance Act ("TRIA") compliance

This Circular comments on the terms and conditions for cover of war risks under the following insurances:

• P&I Cover of Mobile Offshore Units.

• Comprehensive General Liability Insurance for Mobile Offshore Unit Operators.

• Comprehensive General and Contractual Liability Cover for Offshore and Specialist Vessels and Operations.

The special war risks P&I cover afforded is subject to the Association's Statutes and the Rules for MOUs for the 2009 policy year (save that the war risks exclusion in Rule 41 in the Rules for MOUs will not apply). The special war risk P&I insurance will cover P&I risks set out in chapter 6 of the Rules for MOUs caused by war risks as defined in Rule 41 of the Rules for MOUs, including liability or loss in excess of the amounts recoverable under the Vessel's Hull and Machinery and/or Crew/ Mariners War Risk insurances and any P&I inclusion clauses applicable thereto, but subject always to any special terms of entry agreed between the Association and the individual Member and set out in the relevant vessel's Certificate of Entry.

It is a condition for this insurance that the Member has arranged marine war risk insurance for the Vessel. This cover excludes any P&I liability or loss which is recoverable under the marine war risks insurance or which is covered under any other insurance the Member may have.

The cover for P&I war risks is subject to a deductible equal to the deductible agreed in the Vessel's terms of entry for standard P&I risks or USD 25,000, whichever is the higher, per event.

The special war risks P&I cover is placed as reinsurance of the Association.

Comprehensive General Liability Cover for Mobile Offshore Unit Operators. ("MOU CGL Cover")

This additional insurance to P&I Cover of Mobile Offshore Units incorporates, by reference to Rule 41 of the Rules for P&I Cover of MOUs (and to Rule 58 of the Rules for P&I Cover of Ships in respect cover for Charterers' Liability), the war risks exclusions in the P&I Cover for MOUs (and for Ships in respect of Charterers' Liability).

The Association has arranged additional insurance for liabilities, losses costs and expenses caused by war risks and which would have been covered under the MOU CGL Cover but for the war risks exclusions incorporated therein.  This additional war risk insurance is on terms identical to those of the additional war risks P&I Cover for MOUs described above, save that the limit of cover and deductible set out in the Cover Notes for MOU CGL Cover shall apply.

Conditional Areas - MOU  P&I  and CGL War Risks

The additional war risks insurances described above may from time to time exclude certain geographical areas, or cover in certain parts of the world may be subject to special conditions and/or additional premium.

Effective 20 February 2009 the following areas are held covered for war risks  P&I and CGL Cover for MOUs on terms and/or additional premium to be agreed :

Members with MOUs within any of the above areas, or in waters adjacent to these areas, must contact the Association in order to reinstate the special war risks P&I cover.  Any request(s) for reinstatement should include the name(s) of the unit(s) involved, location, number of crew and other persons on board, information about Hull & Machinery War and other war risks insurances with underlying P&I / liabilities included, including sums insured, and information about war risks indemnities from charterers or others.

Members, who have recently provided such information, need not contact the Association unless there are changes to their previous advice.

The conditional areas and the terms for war risks cover in such areas may be altered on seven days notice to Members.

Comprehensive General and Contractual Liability Cover for Offshore and Specialist Vessels and Operations. ("CGL and Offshore Cover")

This additional insurance to the P&I Cover for Ships is not subject to exclusion of war risks.  Liabilities, losses, costs and expenses, which are covered pursuant to the Cover Note for CGL and Offshore Cover, would also be covered if caused by war risks.

The limit of cover and deductible set out in the Cover Note would apply also in respect of war risks.

Notice of Terrorism Insurance Coverage,US Terrorism Risk Insurance Act of 2002, section 103 (b) with subsequent extensions, amendments and reenactments

Members with any questions are invited to contact the P&I Underwriting Department of Gard AS. 

Yours faithfully, GARD AS As agent only for Assuranceforeningen Gard -gjensidig-

Claes Isacson Chief Executive Officer

APPENDIX TO SPECIAL OFFSHORE  CIRCULAR NO 1/2008

INSTITUTE NOTICE OF CANCELLATION, AUTOMATIC TERMINATION OF COVER AND WAR AND NUCLEAR EXCLUSIONS CLAUSE - HULLS

This clause shall be paramount and shall override anything contained in this insurance inconsistent therewith

1 Cancellation

Cover hereunder in respect of the risks of war, etc. may be cancelled by either the Underwriters or the Assured giving 7 days notice (such cancellation becoming effective on the expiry of 7 days from midnight of the day on which notice of cancellation is issued by or to the Underwriters).  The Underwriters agree however to reinstate cover subject to agreement between the Underwriters and the Assured prior to the expiry of such notice of cancellation as to new rate of premium and/or conditions and/warranties.

2 Automatic Termination of Cover

Whether or not such notice of cancellation has been given cover hereunder in respect of the risks of war, etc, shall TERMINATE AUTOMATICALLY

United Kingdom, United States of America, France, the Russian Federation, the People’s Republic of China;

3 Five Powers War and Nuclear Exclusions

This insurance excludes

the outbreak of war, whether there be a declaration of war or not between any of the following:

United Kingdom, United States of America, France, the Russian Federation, the People’s Republic of China;

4 Law and Practice

This clause is subject to English law and practice.