Marine insurer and International Group member Skuld has noted that, although war risks are excluded from standard P&I cover (Rule 30.4.1), Assuranceforeningen Skuld (Gjensidig), in conjunction with other P&I Clubs in the International Group, continued to provide War Risks P&I Excess Cover on the same basis as in the 2020/21 policy year for Members entered on a full mutual basis.
The limit of cover will remain at $500m. The cover is subject to an excess of the proper value of the entered vessel, or whatever sums are recoverable from other war risks covers. Skuld reminded members of the change introduced in the 2020 policy year in respect of the minimum excess of the policy which has increased from the proper value of the entered ship (as agreed by the relevant Association) or $100m, whichever is the less, to the proper value of the entered ship (as agreed by the relevant Association) or $500m, whichever is the less.
“This policy to pay claims excess of amounts recoverable under vessels’ war or crew war risks P&I policies subject to a minimum excess of the proper value of the entered ship (as agreed by the relevant Association) or $500m, whichever is the less (applicable to owners’ entries and not to Charterers’ entries), and further subject to a minimum excess of $50,000 any one event.”
Skuld said that Members should note that they are deemed to have underlying cover with conditions equivalent to the cover above equal to at least the proper value of the ship. Furthermore, this cover is excess of any cover which the Member has actually taken out which covers the risk, unless the cover is a corporate general liability umbrella cover.
Members who have ships valued individually at more than $100m and who do not purchase primary war risks insurance will have a larger gap in their cover from the 2020 policy year (to fund for their own account). Skuld members were therefore recommended to review their war risks arrangements to ensure they were aware of their exposures in respect of any ship valued at more than $100m.
The cover is subject to a deductible of $50,000 any one event each vessel.
• Since this is an excess cover only, Members must maintain their primary war risks P&I cover with a minimum limit of the value of the entered vessel or $500m, whichever is the less. Members should ensure that this cover is maintained at a level which accurately reflects the proper value of their vessels in the prevailing market.
• If Members choose to insure for amounts in excess of the value of the vessel, the cover provided by the Association will apply in excess of the total amounts recoverable under all other P&I war risks policies.
• The limit of $500m is subject to aggregation.
• The cover is subject to cancellation, automatic termination and nuclear and bio-chem exclusions. Liabilities which Members may incur under TOPIA 2006 (as amended in 2017) are excluded.
• Members are reminded that where payment by the Club under a guarantee or a certificate is in respect of war risks, Members shall indemnify the Club to the extent such payment is recovered or would have been recoverable under a standard P&I war risk policy.
The War Risks P&I Excess Cover is subject to the bio-chem exclusion.
In order to provide a degree of cover to Members, the P&I Clubs in the International Group agreed in 2004 to cover bio-chem risks relating to crew claims and for legal costs relating to other P&I liabilities. This arrangement will continue in the 2021/22 policy year. Cover is provided through a special pooling arrangement and is subject to a limit of $30m in the aggregate.