1. INTRODUCTION
1.1 For the sake of convenience and also in view of the different nature of deployment, operations and hazards encountered, for the purpose of these guidelines Marine Hulls are divided into three groups viz;
a) Oceangoing vessels and other vessels rated exclusively by the Tariff Advisory Committee.
b) Vessels insured under Builder’s Risks policies, Ship Repairer’s Liability Policies, ship Breaking Policies and Charterer’s Liability Policies.
c) All vessels and/or operations for which rates have been provided in Marine Hull Manual under specific Tariffs or otherwise and all other vessels/operations not covered by (a) and (b) above.
1.2 The types of claims, which occur in connection with Hull Insurance, are
a) Total Loss/Constructive Total Loss;
b) Particular Average/Particular charges i.e. Partial Losses/Expenses;
c) Salvage and Salvage Charges – either Salvage Awards or Salvage under contract;
d) General Average
e) Collision Liability
f) Sue & Labor Charges
g) Liability and non-liability Claims (such as wreck removal) falling under the P & I Section of the policy where such cover is granted ;
h) Personal Accident Claims for crew covered under Sailing/Fishing vessels Tariffs.
1.3 Notwithstanding the expertise available in Company, the following claims should generally be considered for reference to professional Average Adjusters
a) All Claims falling under Category 1.1 (a) unless the claim involved is straightforward and also for a nominal amount.
b) i) GA or GA/PA claims on vessels under Category 1.1 (c).
ii) Collision Liability claims requiring cross Liability adjustment in respect of risk falling under Category 1.1 (b) and (c).
Though selection of Average Adjusters is prerogative of the Hull Owners they should be advised to engage adjusters who have established offices in India as far as possible.
2. PROCEDURE
2.1 Oceangoing Vessels
In view of :
a) Nature and quantum of claims likely to arise under this category;
b) Likelihood of occurrence of loss in distant foreign waters;
c) Involvement of Laws and Practices of foreign jurisdictions, and
d) Involvement of foreign professional and/or firms like surveyors, repair yards, adjusters, solicitors, arbitrators, Courts, etc.
The current system of processing these claims in accordance with the international practices and traditions will continue except in so far as the provisions of the Indian Statutes are concerned.
2.2 Sundry Hulls (Refer 1.1(c) including Sailing vessels, Fishing vessels, Inland vessels, etc.)
a) While a Licensed Surveyor should be appointed in all cases of Partial Losses/Expenses such licensed Surveyor is to be appointed in case of TL CTL only where the vessel or its wreck, of reasonable value is available for inspection or making reasonable attempt to salvage Refer 2.2 of General Guidelines.
b) On receipt of loss intimation a letter may be written “on without prejudice” basis to the insured advising about the appointment of Surveyor and/or Investigator requesting the insured to render full co-operation to the Surveyor/Investigator appointed and also to return the claim form duly completed and signed.
c) Notice of Abandonment of the vessel/wreck in writing is a pre-requisite for a Constructive Total Loss Claim. As a matter of practice, insurers must decline, prima facie, acceptance of the Notice of Abandonment. However, Insurers’ refusal to accept Abandonment does not legally prejudice the insured’s claim for a CTL once the Notice of Abandonment has been issued by him and received by the Insurer. Notwithstanding this the Insurer must still refuse acceptance of abandonment of the wreck till the probable liabilities attaching to the wreck (Port and other dues, statutory requirement of wreck removal in case of vessel sunk in navigable channel etc.) are reasonably estimated or considered.
d) Total loss claim can be settled on the basis of the statement and documents, as also the Investigator’s /Surveyor’s report as the case may be if the circumstances are found to be reasonably acceptable. As per Marine Insurance Act, following acceptance of a claim for Total Loss of a vessel, the insurers become entitled to the wreck or the proceeds thereof, if any. However, before enforcing such entitlement, it is advisable to ascertain whether or not any liability, statutory or other wise, is reasonably likely to attach to such wreck or proceeds thereof.
e) Since Marine Hull Policy is issued for a composite sum insured, representing the aggregate values of Hull and Machinery and showing Hull or Machinery value separately in the policy being prohibited, no claim for Total or Constructive Total Loss can be considered for settlement on the basis of and on account of either Hull or Machinery value alone.
f) In case of Partial Loss, as far as possible, efforts should be made by the Surveyors to achieve assessment net of salvage, if any, because it is difficult and very often not economical for the Underwriters to get involved in salvage take-over and disposal. However, where this is not possible, arrangements should be made to take over the salvage from the insured before the settlement of the claim and it should be disposed of as early as possible as per the guidelines for disposal of salvage.
g) Claims occurring in foreign waters should be dealt with in the same manner as in the case of oceangoing vessels.
3. PROCESSING OF CLAIM AND DOCUMENTATION
3.1 The documents required for settlement of Sundry Hull claims are:
1) A final Survey Report inter-alia incorporating the following:
a) Name of the registered owner of the vessel
b) Identity of the vessel including registration details. License particulars including validity thereof wherever applicable.
c) The details of loss suffered;
d) The Surveyor’s observation on the alleged circumstances of the loss;
e) The reasonable probability of the alleged circumstances giving rise to the losses noticed and/or claimed;
f) Quantification of repairs/replacement cost, Salvage, Sue and Labor etc. where applicable.
g) Cause of loss as per the Perils Clause of the policy.
h) Confirmation of class if applicable.
i) Confirmation on compliance with Conditions and Warranties relating to Trading, Weather, Lay up. Watch and Ward etc. and also the provisions of the applicable statutes.
j) Adequacy of sum insured for G.A. Salvage, Sue & Labor, Collision liability claims etc.
k) In case of total loss claims, specific recommendations of the surveyors whether the claim is actual total loss or constructive total loss with reasons.
l) Comments as to the direction, speed and angle of blow in respect of collision claim together with opinion on degree of blame attaching to each vessel.
m) Photographs of the wreck, salvage operations, Sue and Labor etc. wherever practicable.
2) Copy of Certificate of Registration and License, if any, issued by the concerned authorities;
3) Original of the Certificate/Letter of Cancellation of Registration of vessel in respect of Total Loss claims.
4) Whether Report for the relevant place, date and time from the competent authority in case Adverse Weather Warranty is involved;
5) Affidavits and/or statements by the Owner, Tindal and all members of the crew separately of the insured vessel and/or rescuing vessel, if any, made to any authority such as Police, Magistrate, Notary Public, Port Office, Indian Consulate etc.
6) Marine Casualty Form issued by Mercantile Marine Department where applicable.
N.B.- Marine Casualty form is available only if any member of the crew including Tindal has survived the casualty. If all the crewmembers including the Tindal employed in the particular adventure die due to the casualty or are missing beyond trace, the Marine Casualty Form is not issued by Mercantile Marine Department, as the Department can record no statement from any of the crew regarding the casualty. However, in such cases, the Mercantile Marine Department issues a certificate confirming that the casualty has been reported to them.
7) Police Report for claims within the territorial waters and for SRCC claims.
8) The loss should be reported to the Port Authorities if occurring within the port area.
9) In view of the localized and small scale operation, ‘Salvage Charges’ covered under the Fishing Vessels’ policy is to be seen differently from that under Ocean-going Vessels’ Policy in as much as neither the Lloyd’s Open Form for salvage agreement nor any international professional salvager is ever likely to be involved in salvaging such vessels. Therefore, in most of the cases the salvage services rendered to fishing vessels will be contracted salvage and, for the purpose of eliminating unnecessary complications, it is advisable to treat such ‘Salvage Charges’ as ‘Sue and Labor’ costs for all practical purposes. It is, however, to be ascertained that the amounts claimed for such costs are both actually incurred and judiciously and reasonably incurred as also incurred to avoid or minimize a loss that would otherwise be admissible under the policy.
10) In the event of a Total and/or Constructive Total Loss claim being considered for admission, the original insurance policy duly discharged by the insured is to be collected. However, where the original policy is reported to be lost, an appropriate Letter of Indemnity in lieu thereof should be obtained from the insured.
11) In the event of a claim for Partial Loss/Expenses, Salvage, Salvage Charges or Sue and Labor Charges, original repair bills, cash memos and similar documents duly verified and certified by the Surveyor as also Salvager’s/diver’s Report where applicable, are to be furnished. Claims for Sue & Labor Charges may have to be considered for settlement over and above the TL/CTL claim settlement. For these also original bills/cash memos in support of expenses incurred are required.
12) For claims other than TL / CTL, the applicable deductible should be first deducted from the total claim amount as provided for in the clauses attached to and forming part of the policy.
3.2 In addition to the above, the following documents have to be collected for sailing vessel claims.
a) Certificate of Inspection
b) Free Board Certificate before commencement of the voyage;
c) Cargo Manifest
d) Load Line Certificate
e) Port Clearance Certificate;
3.3 In case of Fishing Vessels, wherever the provisions of the Merchant Shipping (Amendment) Act 1983 Part XVA, Section 435A to X are applicable, the Surveyors should be directed to report on the compliance thereof.
4. FIXED JETTIES AND PONTOONS
Since these are fixed structures and are included in the Hull Department more as an extension of the principles of Hull Insurance than for any other reason, in the event of losses it is advisable to process such claims as ‘Engineering’ claims and proceed accordingly.
However, since some losses may be found to be appropriate to be dealt with in accordance with the practices of Hull Department, like in the event of fixed Pontoon getting un-moored accidentally, going adrift and ultimately sustaining damage or getting stranded/grounded, such claims should be processed in line with practices of the Hull Department.
Situations, which are not explicitly provided for here, should be handled in consultation with the competent authority/Head Office.