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1.1

The cover afforded by the Association in respect of an Entered Ship consists of the following:

1.1.1

Under Rule 2: Part A Part A (applying to British ships and other Ships to which Rule 4.A.1 applies); Part B Part B (applying to all Ships); Part C Detention or Diversion Expenses; Part D Protection and Indemnity Risks; Part E Sue and Labour; Part F Discretionary Claims.

1.1.2

Under Rule 3: Loss of freight, disbursements and/or increased value, premiums and/or other interests.

1.2

For all the purposes of Rule 2 Part A, Appendix A and the other provisions of the Rules which relate thereto, the Insured Value of an Entered Ship shall (unless the Owner or Insured Owner and the Managers agree a different Insured Value) be the total marine value, that is to say the total sum for which she is insured for total loss under marine policies, unless, and for as long as, any of the provisions of Rule 11 shall apply.

1.3

For all the purposes of Rule 2 Parts B, C, D, E and F, and the provisions of the Rules which relate thereto, the value for which an Entered Ship is insured by the Association is the amount for which she is insured for total loss in respect of her hull, machinery, materials and all other parts and equipment thereof, which is agreed between the Insured Owner and the Association and which is set out in the Certificate of Entry. Where only a part or percentage of such Insured Value is to be insured by the Association, that part or percentage shall be stated as such in the Certificate of Entry.

1.4

For all the purposes of Rule 3, Appendix C, and the other provisions of the Rules which relate thereto, the Sum Insured shall be the sum insured for the corresponding risk or risks under the Entered Ship’s marine policies, which is agreed between the Insured Owner and the Managers and which is set out in the Certificate of Entry. PROVIDED ALWAYS that:

1.4.1

The sum to be insured under each category of Rule 3 risk shall be specified in any application for insurance;

1.4.2

Unless otherwise agreed by the Managers in writing the total Sum Insured for Rule 3 risks shall not exceed 50% of the Insured Value as provided for in Rule 1.3.

1.5

Subject to Rule 1.5.1, the risks insured by the Association are only such risks as are set out in Rules 2 and 3.

1.5.1

The Managers may in any particular case agree in writing with an Insured Owner that the risks insured and/or the cover for his ship shall be modified so that the risks are and/or the cover is less or more extensive than is provided for in these Rules.

1.6

The risks specified in Rules 2 and 3 are always subject to the warranties, conditions, exceptions, limitations and other terms set out in Rule 4 and elsewhere in these Rules.

1.7

The cover afforded by the Association is subject to the provisions relating to the service of a General Premium Notice set out in Rule 5. Such Rule provides for the modification or termination of cover upon the service of a General Premium Notice. Appendix A contains provisions as regards the assessment and payment of Contributions and Q.E.R. Premiums following the service of a General Premium Notice and also provisions for the reinstatement of cover.

1.8

Rule 2 Part A (applying to British ships and other Ships to which Rule 4.A.1 applies) and Rule 2 Part B (applying to all Ships) incorporate the terms as to the measure of indemnity or otherwise affecting the recoverability of losses which are set out in Appendix B.

1.9

Rule 3 (freight, disbursements and/or increased value, premiums and/or other interests) incorporates similar terms as to the recoverability of losses which are set out in Appendix C.

1.10

An Insured Owner is only insured against losses, liabilities, costs or expenses which arise out of events occurring during the period of entry of a ship in the Association.

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