Rule 10 Conditions

Section 1  Member’s obligations with regard to classification and requirements by Classification Society, flag State or otherwise

Unless otherwise agreed the following conditions are terms of the insurance of the entered ship.

1. With regard to the classification of ships

(a) The ship must be and remain throughout the period of insurance classed with a Classification Society approved by the Association.

(b) The Member must promptly call to the attention of that Classification Society or the Society’s surveyors any incident or condition which has given or might have given rise to damage in respect of which the Classification Society might make recommendations as to repairs or other action to be taken by the Member.

(c) The Member must comply with all the Rules, recommendations and requirements of that Classification Society relating to the entered ship within the time or times specified by the Society.

(d) The Member must authorise the Association, for whatever purpose it may consider necessary, to receive information and to inspect and obtain documents relating to the class of the entered ship from a Classification Society with which the ship is or has been classed.

(e) Where the Member is in breach of Section 1 (a) above of this Rule, the Member shall cease to be insured by the Association in accordance with Rule 27 (f). Where the Member is in breach of Section 1 (b)-(d) above of this Rule, the Association may reject any claim or reduce any sum payable under these Rules.

2. With regard to statutory requirements

The Member must comply with the flag State’s or other competent authorities’ requirements relating to the entered ship’s design, construction, adaptation, fitment, condition, equipment, manning, safe operation, management and maritime security.

Valid certificates covering such requirements, including ISM Code certificates and ISPS Code certificates, must at all times be maintained. If the Member fails to fulfil his obligations under this point, the Association may reject to compensate liabilities, costs or expenses caused by such failure.

Section 2 Standard terms of contracts

The following applies to standard terms of contracts or agreements entered into by or on behalf of the Member.

(a) Contracts for carriage of goods
Such contracts shall not impose upon the Member a higher liability than would follow from the Hague Rules or the Hague-Visby Rules.

(b) Contracts for through transport of goods
Such contracts shall not impose upon the Member a higher liability than would follow from any mandatory provisions applicable to any separate part of such through transport.

(c) Crew agreements and contracts of service and employment
Such contracts or amendments thereto must be submitted to and approved by the Association.

(d) Contracts for carriage of passengers
Such contracts must be submitted to and approved by the Association.

(e) Other contracts
Such contracts must be submitted to and approved by the Association.

There shall be no recovery from the Association for liabilities, costs or expenses which would not have arisen had the Member complied with the conditions set out above.

Upon application by the Member the Association may agree to provide insurance cover for contracts containing terms less favourable than required under a-b above.

Notwithstanding what has been said above, the Association may reject to compensate the Member for liabilities, costs or expenses arising from the Member having entered contracts or agreements on unusually burdensome terms without the approval of the Association.

Section 3 Regulations

The Association may issue general or particular regulations in writing.

The Association may reject any claim or reduce any sum payable in respect of claims arising as a consequence of the Member not complying with such regulations.

Section 4 Obligations with regard to casualties and claims

The Member must take all reasonable steps to avert or minimise liabilities, costs or expenses in respect of any casualty or event which may give rise to a claim upon the Association.

The Member must promptly notify the Association of any such casualty or event and of any related formal enquiry or legal proceedings involving the entered ship. The Member must also promptly notify the Association when a claim has been made against the Member which may give rise to a claim upon the Association.

The Member must promptly provide the Association with all documents and evidence which may be relevant to the case and must produce any person for interview or to give evidence.

The Member shall not settle or admit liability for any claim for which he may be insured by the Association without the prior consent of the Association.

Where the Member commits any breach of these obligations, the Association may reject any claim by the Member against the Association or reduce any sum payable by the Association arising out of the casualty.

Where the Member does not accept a settlement of a claim recommended by the Association, the Association’s liability in respect of such claim shall be limited to the amount so recommended.

Section 5 Survey

The Association must at any time be allowed admittance to the ship to conduct any surveys and investigations which the Association considers necessary.

Section 6 Disclosure and alteration of risk

The Member shall make full disclosure to the Association before the contract of insurance is concluded of every circumstance which would influence the Association in deciding whether and on what terms and conditions to provide cover.

The Member shall promptly disclose to the Association every change in circumstance, occurring after the conclusion of the contract of insurance, which may alter the insured risk. Where there is an alteration of risk intentionally caused or agreed to by the Member, the Association may reassess the terms and conditions of the cover provided.

Where the Member commits any breach of these obligations, the Association may reject any claim against the Association if the Association would not have concluded the contract of insurance at all or on the same terms and/or conditions had the Association known about the circumstance, or reduce any sum payable to the extent the circumstance has had relevance for the claim.

Commentary: Rule 10 Conditions