Rule 2 INTRODUCTORY

1. The standard covers afforded by the Association to a Member who has entered his ship in the Association are set out in Rules 3, 4 and 5.

2. The risks specified in Rules 3, 4 and 5 are always subject to the provisos, conditions, exceptions, limitations and other terms set out in these Rules.

3. The covers set out in Rules 3, 4 and 5 may be excluded, limited, modified or otherwise altered by any special terms which have been agreed in writing between a Member and the Managers.

4. By virtue of Rules 6 and 7 a Member may be insured against risks other than those set out in Rules 3, 4 and 5 where such special terms have been agreed in writing between the Member and  the  Managers.  Unless  otherwise     expressly agreed such special insurance shall be subject to the provisos, conditions, exceptions, limitations and other terms set out in these Rules.

5. A Member is only insured against loss, damage, liability or expense incurred by him which arises:

i. out of events occurring during the period of entry of a ship in the Association;

ii. in respect of the Member’s interest in the entered ship; and

iii. in connection with the operation of the ship by or on behalf of the Member.

6. A Member who has entered his ship in the Association for insurance against any of the aforesaid risks is bound (subject to paragraph 7 below) to pay Calls to the Association in accordance with Rules 16, 18, 24, 25 and 26 (“Call Entries”).

7. By virtue of Rule 17 an Owner may be insured on the special terms that he is liable to pay a fixed premium to the Association (“Fixed Premium Entries”), provided that this has been expressly agreed in writing between the Owner and the Managers.

8. The cover provided by the Association as set out in these Rules is solely for the benefit of the Member, and any joint  Member, Group Affiliate, other association or insurer, or permitted assign, to the extent allowed by Rules 10, 11, 13 and 15.

9.  Notwithstanding the provisions of Rule 8. A, where an Member has failed to discharge a legal liability to pay damages or compensation for illness, personal injury or death of a seaman, the Association shall discharge or pay such claim on the Member's behalf directly to such seaman or dependent thereof PROVIDED ALWAYS that    

i  the seaman or dependent has no enforceable right of recovery against any other party and would otherwise be uncompensated,

ii  subject to (iii) below, the amount payable by the Association shall under no circumstances exceed the amount which the Member would otherwise have been able to recover from the Association under the Rules and the Member’s terms of entry,

iii  where the Association is under no liability to the Member in respect of such claim in accordance with Rule 26.B. ii (i) and (iv) by reason of cancellation for non-payment of amounts due to the Association,  the Association shall  nevertheless discharge or pay that claim to the extent only that it arises from an event occurring prior to the date of cancellation, but as agent only of the  Member, and the Member shall be liable to reimburse the Association for the full amount of such claim.