Ana sayfa Yazarlar Aret Taşcıyan Trading in conditional areas in Nordic Plan

Trading in conditional areas in Nordic Plan

When Norwegian Marine Insurance Plan 1996 (NMIP) was being revised in 2007 THE Clause 3-22 named Safety Regulations was amended to include a sub paragraph 3 which states;
“The rules prescribed by the classification society regarding Ice Class constitute a safety regulation under sub paragraph 1”. This paragraph stayed as in 2010 version and incorporated in the main paragraph in Nordic Plan 2013. Sub paragraph 1 on the other hand defines safety regulations as “ rules concerning measures to prevent loss”.  Also the safety regulations are fully applicable throughout the policy period, particular focus is given when a vessel is about to trade within Conditional Trading Areas.
Conditional Trading Areas are regulated in NMIP under Clause 3-15. Owners are required to notify the insurer(s) when a vessel is about to enter a Conditional Area. Clause 3-15 of NMIP 2007 version stipulates that, the insurer may require an additional premium and may also enforce other conditions and it further continues in sub paragraph 2 saying “If the ship proceeds into an excluded trading area, the insurance ceases to be in effect, unless the insurer has given permission in advance”.
Most owners and their brokers assume that by notifying the insurer and even agreeing upon the additional conditions and premium in accordance with NMIP 3-15, the vessel during her voyage in Conditional Areas, would have full coverage including damages caused by ice.
My recent experience with some Scandinavian Underwriters has revealed that the above understanding is unfortunately not correct in accordance with NMIP 3-22.
Underwriters comments were as follows;
“Voyages to conditional trading areas, as defined under the Norwegian Plan, are considered on a case-by-case basis but it is always highlighted that owners should be aware of §3-22, Safety Regulations. This provision in the Plan always applies whether in ordinary or conditional trading areas but when it comes to voyages where ice may be present it effectively means that the vessel shall not trade in worse ice conditions than those for which it is built and classed. It is highlighted that sending a vessel without ice class to an area where there is a risk of encountering ice could potentially prejudice the insurance cover should the vessel suffer ice damage. The requirement under the insurance conditions should therefore apply as a matter of good practice”.
I have also been informed that this particular issue, by coincidence, has just been reviewed by CEFOR ( The Nordic Association of Marine Insurers) where all members present at the meeting explicitly agreed that they wanted to maintain the current position under the Plan and against this background they are not prepared to grant a waiver of §3-22 . The position therefore remains that each voyage should be assessed on a case-by-case basis but §3-22, Safety Regulations, will always apply.
According to the above assessments, If a vessel is not Classed as an Ice Classed vessel by the classification society and enters in an area where there is ice, this may be considered as a breach of safety regulation furthermore, if the vessel sustains ice damage during manoeuvring in ice conditions there is a casual relationship between entering into the conditional area and the damages sustained. If on the other hand the vessel is ice classed and the ice conditions in the area are not heavier than those stipulated for the said vessel, there is of course no breach of safety regulations. This means that Clause 3-22 is applicable for those vessels with or without ice notation, depending on the ice conditions in a given area.
Consequence of a breach of safety regulations is stipulated in Clause 3-25 which stipulates that “ if a safety regulation is breached, the insurer shall only be liable to the extent that the loss is not a consequence of the breach, or that the assured has not breached the safety regulations through negligence”.
In the light of recent interpretations of the application of sub paragraph 3 of Clause 3-22, we can argue that despite having notified and, on certain occasions,  paid the additional premium to the underwriters in accordance with Clause 3-15, owners may find themselves without cover for damages sustained by ice in the so called conditional trading areas.
There is therefore a great deal of contrast and contradiction between the owners their brokers and the underwriters regarding the coverage issues when trading in conditional waters and a high degree of uncertainty regarding what risks are actually covered by the additional premium charged by the underwriters.