Section J: Period of Insurance

16.1 - Policy year

Unless otherwise agreed at the time of entry or set out in the rules, the insurance provided by the club begins at the time stated in the member’s certificate of entry, and continues until noon GMT on the following 20 February, and thereafter, unless terminated in accordance with the rules, from policy year to policy year

16.2

If a member does not wish to continue the insurance in respect of the ship, he must give notice in writing to the managers not later than 30 days before the expiry of the period of insurance.

16.3

The ship may not be withdrawn at any other time or in any other manner except with the consent of the managers.

16.4 - Managers’ notice

The managers may, in respect of the ship, at any time and without giving any reason: 

1. give to a member seven days’ notice that he is not entitled to any recovery in respect of any claim arising during the period from expiry of that notice until such further time as the managers specify; or
2. terminate the entry on 30 days’ notice in writing given not later than 30 days before the expiry of the period of insurance.

16.5 - Pro-rata premium

Subject to rules 18.8 and 21.1 to 21.8, a member is only liable for premiums in respect of the ship for the current policy year pro-rata for the period from the time stated in the member’s certificate of entry until noon GMT:

1. on the day ownership was legally transferred; or 
2. on the day the ship became an actual or constructive total loss or such later date as the managers may determine; or
3. on the date of cessation of insurance.

17.1 - Cessation of insurance

A member shall cease to be insured by the club in respect of any and all ships entered by him if:

1. being an individual, he dies, becomes of unsound mind or bankrupt, or makes any arrangement with his creditors generally; or
2. being a company, a resolution is passed for its voluntary winding-up or an order is made for its compulsory winding-up or it is dissolved or seeks protection from its creditors under any applicable bankruptcy or insolvency laws or any similar event occurs in any applicable jurisdiction.

17.2

A member shall cease to be insured by the club in respect of any ship entered by him if:

1. he sells or assigns the whole or any part of his interest in the ship, unless the managers have agreed to such assignment and to an assignment of the relevant insurance by the club pursuant to rule 14.1; or
2. the ship becomes, or is accepted by hull underwriters as, an actual or constructive total loss, or there is a compromise reached with hull underwriters, or the managers decide that the ship can be considered or deemed to be an actual or constructive total loss, except as regards liabilities flowing directly from the casualty which gave rise to the actual or constructive loss of the ship, or such later date as the managers may determine; the managers may, however, agree to extend the period of insurance on such terms as they think fit; or 
3. notice is given under rules 16.2 to 16.4 and is not withdrawn by agreement before the expiry of the period of insurance; or
4. the entry is terminated or ceases in accordance with rules 15 or 16.4; or 
5. the ship is employed by the member in a carriage, trade, voyage or operation which will thereby in any way howsoever expose the club to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state or international organisation, or if the provision of insurance for a carriage, trade, voyage or operation is or becomes unlawful, prohibited or sanctionable, unless the managers shall otherwise determine.

17.3 - Cancellation of insurance

If a member fails to pay when due and demanded by the managers any sum owing from him to the club including any sum for which he is liable under rule 13.16:

1. unless and to the extent the board otherwise decides, a member will not be entitled to any recovery in respect of any claim arising from the date of such failure until the date such sum owing to the club is paid in full; and
2. his insurance will be cancelled, whether or not it may already have ceased for some other reason, if after service on him of a notice stating that there are sums owing and requiring payment by a specific date he fails to pay any sum in full on or before such date.

17.4

The managers may, but are not obliged to, specify the amount outstanding; any inaccuracy in the demand as to the amount stated to be owing shall not invalidate the notice unless there is no sum owing at all.

17.5 - Effect of cessation of insurance

When a member ceases to be insured in respect of any ship or at all (‘the date of cessation’) then:

1. such member and his successors are, and remain, liable for all premium in respect of that part of the policy year for which the ship was on risk, and previous policy years, unless otherwise agreed pursuant to rule 19; and
2. the club remains liable for all claims arising out of any event occurring before the date of cessation, but is under no liability for anything occurring after the date of cessation.

17.6

When a member ceases to be insured under rule 16.4, he remains liable for premium for the policy year in which the cessation occurs pro-rata only for the period beginning with the date of entry and ending with the date of termination.

17.7

When a member ceases to be insured by virtue of rule 17.2(2), he continues to be insured by the club in respect of wreck liabilities in accordance with rules 3.8.6 and 3.11, and on such other terms as may be agreed by the managers.

17.8 - Effect of cancellation of insurance

When a member’s insurance is cancelled under rule 17.3 then: 

1. subject to rules 21.1 to 21.8, if the cancellation occurs while the member is, but for the cancellation, insured, such member and his successors are, and remain, liable for all premium in respect of the policy year during which the date specified in the notice (‘the date of cancellation’) occurs pro-rata only for the period beginning with the date of entry and ending with the date of cancellation and in respect of previous policy years irrespective of whether or not notice has been given under rule 17.3; 
2. if the cancellation occurs after the member has ceased to be insured for some other reason, such member and his successors remain liable for all premium as provided for in rule 17.5(1);
3. the club ceases to be liable for any claims in respect of any ships entered by such member:

• a which may arise by reason of any event occurring after the date of cancellation; or
• b which have accrued or arisen during a policy year for which sums remained owing but unpaid by the member in full or in part at the date of cancellation; or
• c which may have accrued or arisen in any year other than one referred to in (3)b above, whether or not the club may have admitted liability for such claims or may have known, at the date of cancellation, that a claim was likely to accrue.