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Provisions applicable to insurance afforded by the Association Under Rule 3
Terms as to the measure of indemnity or otherwise affecting the recoverability of loss
C.1 Maximum Liability and Measure of Loss
The maximum liability of the Association in respect of any claim for loss of freight, disbursements and/or increased value, premiums and/or other interests shall be an amount equivalent to the Sum Insured.
In relation to a claim which does not result from the total loss (either actual or constructive) of the Entered Ship, the liability of the Association shall, subject to the provisions of paragraph C.1.1, be limited to the amount of the freight which, as a result of the incident giving rise to the claim, is not recoverable by the Insured Owner under a contract existing at the date of such incident.
C.2 Total Loss
If the Entered Ship becomes a total loss (either actual or constructive) the Sum Insured under Rule 3 shall be paid in full, whether the Entered Ship be fully or partly loaded or in ballast and whether she be chartered or un-chartered. If however the Entered Ship becomes a constructive total loss, but the Insured Owner’s claim against the Association under Rule 2 Part B shall be settled as a claim for partial loss only, this provision shall not apply
In ascertaining whether the Entered Ship is a constructive total loss, the Insured Value for which she is insured under Rule 2 Part B shall be taken as the repaired value and nothing in respect of the damaged or break-up value of the Entered Ship or the wreck shall be taken into account.
C.3 General Average and Salvage
The insurance under Rule 3 covers, on the terms set out below the proportion of salvage, salvage charges and/or general average attaching to:
The freight at risk;
The Entered Ship, to the extent that such proportion is not recoverable under Rule 2 Part B by reason of the Insured Value of the Entered Ship under Rule 2 Part B being less than her full contributory value; and in the case of general average sacrifice of the Entered Ship, the Insured Owner may recover the whole of the loss without first enforcing his rights of contribution from other parties.
General average and salvage shall be adjusted according to the law and practice obtaining at the place where the adventure ends, as if the contract of affreightment contained no special terms upon the subject; but where the contract of affreightment so provides the adjustment shall be according to the York-Antwerp Rules 1974.
When the Entered Ship sails in ballast, not under charter, the provisions of the York-Antwerp Rules 1974 (excluding Rules XX and XXI) shall be applicable, and the voyage for this purpose shall be deemed to continue from the port or place of departure until the arrival of the Entered Ship at the first port or place thereafter, other than a port or place of refuge or port or place of call for bunkering only. If at any such intermediate port or place there is an abandonment of the adventure originally contemplated, the voyage shall thereupon be deemed to be terminated.
No claim in respect of salvage, salvage charges or general average shall be recoverable from the Association unless the loss arose from a risk insured by the Association under Rule 3 or the loss was incurred to avoid such a risk.
Claims for salvage, salvage charges and general average, when recoverable hereunder, are payable in full if the Sum Insured in respect of freight is not less than the full contributory value of such freight. If the Sum Insured is less than the full contributory value of such freight, the sum recoverable from the Association shall be reduced in proportion to the under insurance. PROVIDED ALWAYS that: the Directors shall have the power to admit a claim without reduction, or to direct that it shall only be reduced to some lesser extent, if the Directors in their discretion shall see fit.
C.4 Sister Ship
Should the Entered Ship come into collision with or receive salvage services from another ship belonging wholly or in part to the same Insured Owner, or under the same management, the Insured Owner shall have the same rights of recovery from the Association as if the other ship had been entirely the property of owners not interested in the Entered Ship. In case a dispute shall arise between the Insured Owner and the Association either on the liability for the collision or on the amount payable for the services rendered it shall be referred to arbitration by a sole arbitrator to be agreed upon between the Association and the Insured Owners.