British Marine has made some changes to the expiring British Marine terms and conditions, which are reflected in the 2016 editions and in the Policy of Insurance.
General Note:
The UK Insurance Act 2015 will come into force on 12 August 2016 and will apply to contracts entered into from this date. The Act seeks to provide further protection to both consumer and non-consumer buyers of insurance and will amend the law as enshrined in the Marine Insurance Act 1906. The new act recognises that more sophisticated markets such as marine insurance might not require the largely consumer focused legislation. Accordingly certain opt outs are permitted under the new act. As our terms and conditions are subject to English law British Marine is affected by the new act. We are considering our position on the appropriateness of the opt outs and will advise shortly what our stance will be and the extent of the application of the act in our contracts when it comes into force in August. Accordingly this is notice that there may be changes to the 2016 terms and conditions in a similar manner to that already adopted by the marine insurance industry.
Protection & Indemnity
- Many Assureds will see in their trading warranties a new exclusion for trade to Cuba, Iran, North Korea, Sudan and Syria where the broader geographical range of the trading warranty would otherwise permit. The restrictions are due to the ever changing and complex sanctions that are in place. Trade can be allowed in certain circumstances but only after the exercise of a proper due diligence exercise to establish the legitimacy of the parties involved, and with prior written approval by British Marine.
- Clause 28 (Discrimination and Harassment) has been deleted and the numbering of the clauses changed. Accordingly it should be noted under the Conditions section in the Policy of Insurance it now states “Terms and Conditions 2016 Edition section A Clauses 1-32 incorporating sections B and C Clauses 40-81…” This clause has been deleted as it lacked clarity in its application, leading to uncertainty in its application and brings British Marine terms and conditions in line with the rest of the market.
Hull & Machinery
British Marine has made one change to the expiring 2011 Hull & Machinery terms and conditions, which is now reflected in the 2016 edition.
Clause 28 Sanctions Limitation and Exclusion
2011 clause
28. Sanctions Limitation and Exclusion
There shall be no cover under this policy and the Insurer shall not be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose the Insurer to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America.
2016 clause
28. Sanctions Limitation and Exclusion
There shall be no cover under this policy and the Insurer shall not be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose the Insurer or any member of the Insurer's group to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of any country.
There shall be no entitlement under any circumstances for the Assured to recover under this policy that part of any liability, cost or expense which is not recovered or recoverable by the Insurer from any reinsurer because of a shortfall in recovery or non-recovery from such reinsurer by reason of any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of any country.
The terms 'shortfall' or 'non-recovery' include, but are not limited to, any failure or delay in payment to the Insurer by such reinsurer, and/or payment to an account other than an account of, or for the benefit of, the Insurer, in compliance with a requirement imposed by any recognised authority of competent jurisdiction to enforce any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of any country.
Reason: Amendments to existing sanctions legislation and the introduction of new sanctions have clarified and increased the onus on insurers and reinsurers to avoid breaches and the revised clause reflects the obligations and restrictions under the present sanctions environment and aligns the hull & machinery terms & conditions with those already in effect for P&I.