Rule 2 A-F

2.A.1

An Insured Owner who has entered his ship for insurance under Rule 2 is insured against the losses, liabilities, costs and expenses caused by any of the following risks (hereunder called “the Queen’s Enemy Risks”) which are specified in Rules 2.A.2 to 2.A.7. PROVIDED ALWAYS that:

2.A.1.1

The losses, liabilities, costs or expenses caused by the risks specified in Rules 2.A.2 to 2.A.7 must have arisen out of war or other hostilities involving the United Kingdom; and

2.A.1.1

The Queen’s Enemy Risks shall not extend to cover any risks which are not war risks as defined by Section 10(1) of the Marine and Aviation Insurance (War Risks) Act 1952.

2.A.2

Loss of or damage to an Entered Ship Loss, whether partial or total, of the Entered Ship’s hull, materials, machinery and all other parts and equipment thereof when caused by any of the following risks:

2.A.2.1

War or any hostile act by or against a belligerent power;

2.A.2.2

Capture, seizure, arrest, restraint or detainment and the consequences thereof or any attempt thereat;

2.A.2.3

Mines, torpedoes, bombs or other weapons of war, including derelict mines, torpedoes, bombs or other derelict weapons of war.

2.A.3

Detention following Capture, Seizure, Arrest, Restraint or Detainment In the event of the Entered Ship being captured, seized, arrested, restrained or detained, the Insured Owner shall be entitled to recover from the Association:

2.A.3.1

The daily running expenses of the Entered Ship during the period of the detention, save for the first seven days thereof;

2.A.3.2

The expenses, other than the expenses insured by Rule 2.A.3.1, incurred in respect of the capture, seizure, arrest, restraint or detainment and the recapture, release and restoration of the Entered Ship, including claims for damage to property arising in respect of the Entered Ship during the period of capture, seizure, arrest, restraint or detainment which are recoverable in law from the Insured Owner;

2.A.3.3

If the detention of the Entered Ship should last for a continuous period exceeding 90 days, in addition to any sums recoverable under Rules 2.A.3.1 and 2.A.3.2, a sum calculated at the rate of ten per cent per annum of the Insured Value of the Entered Ship as specified in the Certificate of Entry and applied pro rata to the whole of the detention; PROVIDED ALWAYS that: unless the Directors in their discretion otherwise determine, the Insured Owner shall give credit against the said amount payable under Rule 2.A.3.3 for any claim paid or payable by the Association for damage received by the Entered Ship during such period.

2.A.4

The sums recoverable under Rule 2.A.3 shall be limited as follows:

2.A.4.1

No sum shall be recoverable, in an Insured Owner’s claim for detention of an Entered Ship, in respect of any period during which that Entered Ship is:

2.A.4.1.1

Delayed solely because a decision on the part of the Insured Owner, his servants or agents, is awaited on the disposal, repair or movement of the Entered Ship, or

2.A.1.2

awaiting repairs or being repaired, irrespective of whether the need for such decision or repairs has been created by damage caused to the Entered Ship by any of the risks specified in Rule 2 Part A or otherwise howsoever.

2.A.4.2

If the Insured Owner shall have received any hire or other contractual reward payable on a time basis (whether under a demise or time charter party or otherwise howsoever) for the period in respect of which a claim is made hereunder, he shall give credit for such hire or other reward in making his claim under Rules 2.A.3.1 and 2.A.3.3 and if he shall have any right to receive such hire or other reward but shall not have received the same he shall assign his rights therein to the Association.

2.A.4.3

Unless the Directors in their discretion otherwise determine, no sum shall be recoverable from the Association in respect of any period after the Entered Ship has become or been accepted as an actual or constructive total loss (whether under the terms of a policy or contract against marine risks or under the cover specified in these Rules), or after the Association has accepted notice of abandonment or after the Association has notified the Insured Owner in writing, whether or not he has given any notice of abandonment, that the Association has decided to treat the Entered Ship as a constructive total loss.

2.A.5

Collision Liability Any losses, liabilities, costs and expenses incurred by an Insured Owner by way of damages for:

2.A.5.1

Loss of or damage to any other ship or property thereon;

2.A.5.2

Delay to or loss of use of any such other ship or property thereon;

2.A.5.3

Salvage of, or salvage under contract of, any such other ship or property thereon and general average expenditure incurred by such other ship.

2.A.5.4

PROVIDED ALWAYS that:

2.A.5.4.1

Such losses, liabilities, costs or expenses arose in consequence of the Entered Ship coming into collision with any other ship; and

2.A.5.4.2

Such losses, liabilities, costs or expenses arose from one or more of the risks referred to in Rule 2.A.2.

2.A.6

Wreck Liability Any losses, liabilities, costs and expenses incurred by an Insured Owner:

2.A.6.1

Relating to the raising, removal, destruction, lighting or marking of an Entered Ship, when such raising, removal, destruction, lighting or marking is compulsory by law or the costs thereof are legally recoverable from the Insured Owner;

2.A.6.2

Arising as the result of any such raising, removal, destruction, lighting or marking of the wreck of an Entered Ship as is referred to in Rule 2.A.6.1 or any attempt thereat;

2.A.6.3

Arising as the result of the presence or involuntary shifting of the wreck of the Entered Ship or as the result of the Insured Owner’s failure to raise, remove, destroy, light or mark such wreck, including liability arising from the discharge or escape from such wreck of oil or any other substance.

2.A.6.4

PROVIDED ALWAYS that: such losses, liabilities, costs or expenses arose in consequence of the Entered Ship becoming a wreck as the result of a casualty or event occurring during the period of that ship’s entry in the Association and the Entered Ship became a wreck as the result of one or more of the risks referred to in Rule 2.A.2.

2.A.7

Requisitioned and Chartered Ships

2.A.7.1

If the Secretary of State and the Insured Owner so desire an Entered Ship which is requisitioned or chartered on behalf of the Government of the United Kingdom shall be insured against the losses, liabilities, costs and expenses caused by the following risks:

2.A.7.1.1

The risks specified in Rules 2.A.2 to 2.A.6;

2.A.7.1.2

Civil war, revolution, rebellion, or civil strife arising therefrom;

2.A.7.1.3

Piracy;

2.A.7.1.4

Any liability to pay a contribution in general average or salvage on the net hire or freight at risk receivable by the Insured Owner under any charterparty under which the Entered Ship is running whilst on requisition and/or charter but only where the liability to contribute in general average or salvage arises out of one or more of the risks listed or referred to in Rules 2.A.7.1.1 to 2.A.7.1.3.

2.A.7.2

PROVIDED ALWAYS that:

2.A.7.2.1

If the Entered Ship is a British Ship, the provisions of Rule 2.A.1.1 shall not apply to any insurance provided under Rule 2.A.7;

2.A.7.2.2

If the Entered Ship is not a British Ship, the provisions of Rule 2.A.1.1 shall not apply during the continuance of any war or other hostilities involving the United Kingdom to any insurance provided under Rule 2.A.7;

2.A.7.2.3

No sum shall be recoverable under Rule 2.A.7 to the extent that the losses, liabilities, costs or expenses incurred thereunder are recoverable from the government of the United Kingdom under the terms of the requisition or the charterparty by which the Entered Ship is engaged, or by the terms of any statute.

2.A.8 Sue and Labour

2.A.8.1

Extraordinary costs and expenses reasonably incurred on or after the occurrence of any casualty, event or matter liable to give rise to a claim upon the Association within any of Rules 2.A.2 to 2.A.7 and incurred solely for the purpose of avoiding or minimising any losses, liabilities, costs or expenses against which the Insured Owner is insured under any such Rule. PROVIDED ALWAYS that: the following costs or expenses shall not be recoverable whether as sue and labour expenses or otherwise howsoever:

2.A.8.1.1

Any fines, penalties or other impositions such as are specified in Rule 4.E.4;

2.A.8.1.2

Any other sum of money paid in consideration of the release of an Entered Ship from any capture, seizure, arrest, detainment, confiscation or expropriation.

Part B (Applying To All Ships)

2.B.1

Loss, whether partial or total, of the Entered Ship’s hull, materials, machinery and all other parts and equipment thereof (including cash for wages or disbursements, up to such limit as the Directors may from time to time determine) when caused by any of the following risks:

2.B.1.1

War, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power;

2.B.1.2

Capture, seizure, arrest, restraint or detainment, and the consequences thereof or any attempt thereat;

2.B.1.3

Mines, torpedoes, bombs or other weapons of war, including derelict mines, torpedoes, bombs or other derelict weapons of war;

2.B.1.4

Strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions;

2.B.1.5

Any terrorist or any person acting maliciously or from a political motive;

2.B.1.4

Strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions;

2.B.1.5

Any terrorist or any person acting maliciously or from a political motive;

2.B.1.6

Piracy, barratry or violent theft by persons coming from outside the Entered Ship;

2.B.1.7

Confiscation or expropriation.

2.B.2

PROVIDED ALWAYS that: there shall be no insurance under Rule 2 Part B for any losses, liabilities, costs or expenses for which an Insured Owner is insured by Rule 2 Part A.

Part C( Detention or Diversion Expense)

2.C.1

This Part of the cover insures an Insured Owner against loss sustained through the detention or diversion of an Entered Ship caused:

2.C.1.1

By war, civil war, warlike operations, revolution, rebellion, insurrection, civil strife, any hostile act by or against a belligerent power or by conditions brought about as a result of any of the foregoing;

2.C.1.2

As a result of compliance with orders, prohibitions or directions by the Directors or by any Department of the Government of the United Kingdom or any other Government having the right to give such orders or any British Military or Naval Authority given in order to avoid loss of or damage to the Entered Ship by any of the risks referred to in Rule 2 Part A or Part B;

2.C.1.3

By any Government or department or agency thereof or by the armed forces of any Government or by any persons acting or purporting to act on behalf of any Government or any department or agency thereof where the detention or diversion is considered by the Directors in their discretion to have been caused, instigated, incited or encouraged by such government or department or agency in furtherance of its political aims;

2.C.1.4

By any group of persons which in pursuit of its political aims maintains an armed force;

2.C.1.5

By terrorists, pirates, bandits or rioters;

2.C.1.6

In order to avoid loss of or damage to the Entered Ship by any of the risks insured under Rule 2 Part A or Part B but only where and to the extent that the Directors in their discretion determine that the loss should be recoverable from the Association.

2.C.2

PROVIDED ALWAYS that:

2.C.2.1

A loss caused by strikers, locked-out workmen or persons taking part in labour disturbances, or as a result of strikes, lock-outs or labour disturbances, or in order to avoid loss of or damage to the Entered Ship by any of the said risks, shall not be insured under this Rule 2 Part C;

2.C.2.2

There shall be no recovery under Rule 2 Part C if the Insured Owner intended to detain or divert the Entered Ship before the commencement of loading cargo or passengers for, or clearing in ballast on, the voyage during which the detention or diversion shall have occurred;

2.C.2.3

In the case of Rule 2.C.1.2 the orders, prohibitions or directions were given after the commencement of the voyage.

2.C.3

The sums recoverable from the Association in respect of a loss specified in Rule 2.C.1 shall be as set out in Rules 2.C.4 to 2.C.6.

2.C.4

In the event of the detention or diversion of an Entered Ship in any of the cases referred to in Rule 2.C.1, the Insured Owner shall be entitled, subject to Rule 2.C.6, to recover:

2.C.4.1

In the case of the detention of the Entered Ship, the daily running expenses of the Entered Ship during the period of the detention;

2.C.4.2

In the case of the diversion of the Entered Ship, the net extra running expenses of the Entered Ship incurred by the Insured Owner in consequence of the diversion over and above those which would have been incurred but for the same.

2.C.4.3

PROVIDED ALWAYS that:

2.C.4.3.1

No sum shall be recoverable from the Association under Rule 2 Part C in respect of loss of profit or in respect of the amortization of the capital cost of the Entered Ship or in respect of the depreciation thereof, or in respect of any payments or principal or interest made under any mortgage or other financial arrangements concluded in connection with the Entered Ship;

2.C.4.3.2

From each claim there shall be deducted a sum equivalent to seven days’ daily running expenses of the Entered Ship or, in the case of a claim for net extra expenses only, a sum equivalent to the net extra expenses for seven days; and

2.C.4.3.3

No expenses shall be recoverable under Rule 2 Part C to the extent that they have either been paid or are recoverable under Rule 2.A.3.

2.C.5

In the event of the detention of an entered Ship by any of the causes referred to in Rules 2.C.1.1, 2.C.1.3, 2.C.1.4 or 2.C.1.5 and lasting for a continuous period exceeding 90 days, the Insured Owner shall be entitled, subject to Rule 2.C.6, to recover from the Association in respect of such detention, in addition to any sums recoverable under Rule 2.C.4, a sum calculated at the rate of ten per cent per annum of the Insured Value of the Entered Ship as specified in the Certificate of Entry and applied pro rata to the whole of the detention. PROVIDED ALWAYS that:

2.C.5.1

Unless the Directors in their discretion otherwise determine, the Insured Owner shall give credit against the said amount for any claim paid or payable by the Association for damage received by the Entered Ship during such period;

2.C..5.2

The Insured Owner shall give credit for any sum recoverable under Rule 2.A.3.3.

2.C.6

The sums recoverable by an Insured Owner under Rules 2.C.4 and 2.C.5 shall be limited as follows:

2.C.6.1

No sum shall be recoverable, in an Insured Owner’s claim for detention of an Entered Ship, in respect of any period during which that ship is:

2.C.6.1.1

Delayed solely because a decision on the part of the Insured Owner, his servants or agents, is awaited on the disposal, repair or movement of the Entered Ship, or

2.C.6.1.2

Awaiting repairs or being repaired, irrespective of whether the need for such decision or repairs has been created by damage caused to the Entered Ship by any of the risks specified in Rule 2 Part B or otherwise howsoever.

2.C.6.2

If the Insured Owner shall have received any hire or other contractual reward payable on a time basis (whether under a demise or time charterparty or otherwise howsoever) for the period in respect of which a claim is made under Rule 2.C.4 and Rule 2.C.5, he shall give credit for such hire or other reward in making his claim under Rule 2.C.4.1 and 2.C.5 and if he shall have any right to receive such hire or other reward but shall not have received the same he shall assign his rights therein to the Association.

2.C.6.3

Unless the Directors in their discretion otherwise determine, no sum shall be recoverable from the Association in respect of any period after the Entered Ship has become or been accepted as an actual or constructive total loss (whether under the terms of a policy or contract against marine risks or under the cover specified in these Rules), or after the Association has accepted notice of abandonment or after the Association has notified the Insured Owner in writing, whether or not he has given any notice of abandonment, that the Association has decided to treat the Entered Ship as a constructive total loss.

Part D (Protection and Indemnity Risks)

2.D.1

An Insured Owner who has entered his ship for insurance under Rule 2 is insured against the Protection and Indemnity liabilities, costs and expenses specified in Appendix D paragraphs D.1 to D.12. PROVIDED ALWAYS that: the liabilities, costs or expenses referred to in each paragraph (save in paragraphs D.4.2, D.5 and D.10) must, irrespective of whether a contributory cause of the same being incurred was any neglect on the part of the Insured Owner or on the part of the Insured Owner’s servants or agents, have arisen or been incurred in respect of loss or damage, injury, illness or death or accident caused by:

2.D.1.1

War, civil war, revolution, rebellion, insurrection or civil strife arising therefrom, or any hostile act by or against a belligerent power, or any act of terrorism,

2.D.1.2

Capture, seizure, arrest, restraint or detainment (barratry and piracy excepted) and the consequences thereof or any attempt thereat;

2.D.1.3

Mines, torpedoes, bombs, rockets, shells, explosives or other similar weapons of war, save for those liabilities, costs and expenses which arise solely by reason of:

2.D.1.3.1

The transport of any such weapons whether on board the Entered Ship or not; or

2.D.1.3.2

The use of any such weapons either as a result of government order or through compliance with directions given by, or with the written agreement of, any other insurers where the reason for such use was the avoidance or mitigation of liabilities, costs or expenses which would otherwise fall within the cover of those other insurers.

2.D.2

Except as provided in paragraph 2.D.3 there shall be no recovery of the liabilities, costs or expenses referred to in Appendix D paragraphs D.1 to D.8 and D.10 to D.12 inclusive which arise solely out of the terms of any agreement, contract or indemnity unless the terms of such agreement, contract or indemnity have been approved by the Managers in writing. In giving such approval the Managers may impose any terms or conditions as they may think fit, including the imposition of a premium.

2.D.3

There shall be no recovery of the liabilities, costs or expenses referred to in Appendix D paragraphs D.1, D.2, D.3 and D.4.1, which arise out of the terms of any crew agreement, save agreements approved by the Department of Transport of the United Kingdom or any other successor department or body, or other contract of service or employment unless the terms of such crew agreement or contract of service or employment have been approved by the Managers in accordance with the provisions of Rule 2.D.2.

2.D.4

The maximum recovery from the Association for claims under Rule 2 Part D in respect of any one accident shall be limited to whichever is the higher of the following:

2.D.4.1

Such limit of liability as may have been specified in or endorsed on the Certificate of Entry; or

2.D.4.2

Such limit of liability as shall have been determined by the Directors before or at the beginning of any policy year and notified by the Managers to the Insured Owner.

2.D.5

Different limits of liability may be specified for different classes or types of risk whether by the Certificate of Entry or by the Directors.

2.D.6

If no other limit shall have been so fixed, the limit of liability for the purposes of Rule 2 Part D shall be the sum or sums for which the Association is reinsured in respect of the relevant claim otherwise than by virtue of a pooling agreement made with other like Associations.

2.D.7

Such limit or limits shall be independent of and in addition to the sums insured for the purposes of the risks specified in Rule 2 Parts A and B.

2.D.8

Unless the Directors otherwise determine, it shall be a condition precedent of an Insured Owner’s right of recovery from the Association in respect of each of the liabilities and expenses enumerated in Rule 2 Part D that the Insured Owner shall first have paid the same.

Part E (Sue and Labour)

2.E.1

Rule 2 Part E does not apply to the Queen’s Enemy Risks.

2.E.2

Extraordinary costs and expenses (not being the running expenses of the Entered Ship referred to in Rule 2.C.4 or the liabilities and expenses referred to in Appendix D paragraphs D.1 to D.12) reasonably incurred on or after the occurrence of any casualty, event or matter liable to give rise to a claim upon the Association and incurred solely for the purpose of avoiding or minimising any losses, liabilities, costs or expenses against which the Insured Owner is insured by the Association. PROVIDED ALWAYS that: unless the Directors in their discretion shall otherwise determine, the following shall not be recoverable whether as sue and labour expenses or otherwise howsoever:

2.E.2.1

Any fines, penalties or other impositions such as are specified in Rule 4.E.4;

2.E.2.2

Any other sum of money paid in consideration of the release of an Entered Ship from any capture, seizure, arrest, detainment, confiscation or expropriation.

Part F (Discretionary Claims)

2.F.1

Losses, liabilities, costs and expenses not otherwise recoverable under these Rules which the Directors may decide to be within the scope of the Association. Claims under Rule 2 Part F shall be recoverable to such extent only as the Directors may determine.