Section 6 Limitation of cover for passengers and seamen
The increase in passenger-carrying capacity in combination with the significantly increased levels of liability under the Athens Convention 2002 has made it necessary for the Clubs to limit the cover for passengers and seafarers. The cover for passengers and seafarers is limited to the Group excess of loss reinsurance. This Rule deals with the conditions for such a limit as set out in Appendix ll, Rule 1.
3.6.2 Mutuality in relation to ship types
A passenger ship is only one of many ship types entered with the Club. Different types of ship expose the Member and Club to different types of liabilities. To confine the differences in cover it is considered fair that no one ship type should expose the Member and the Club to greater liabilities than any other type of ship. In an effort to meet this mutual goal the Club applies additional premiums to different types of ship. To reduce the risk of a catastrophic claim following an accident with a passenger ship the cover for liability to passengers and seafarers carries a special limit as set out below.
3.6.3 Cover afforded by Appendix II, Rule 1
The Club’s aggregate liability for any and all claims arising out of any one event shall, unless otherwise limited to a lesser sum, not exceed USD 3 billion in respect of liability to passengers and seafarers with a sub-limit of USD 2 billion in respect of liability to passengers.
If a claim were to exceed these amounts and be above the limit of the Group Pool’s excess of loss contract, the excess or “overspill” would be pooled amongst the Group Clubs. The overall Group pool limit for such an overspill claim remains unchanged at 2.5 % of the property limitation funds under the 1976 Limitation Convention of all ships entered in all clubs participating in the Group Pool. Members remain ultimately liable to pay an overspill call up to a maximum of this limit for each entered ship in accordance with Rule 24.
A passenger is defined in Appendix II, Rule 1 as a person carried on board a ship under a contract of carriage or a passenger accompanying a vehicle or live animals covered by a contract for the carriage of goods. A seafarer shall mean any other person on board a ship who is not a passenger.