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Section 10
Claim and Indemnity
A. Total Loss
i. Where the entered ship is completely destroyed or so seriously damaged as to cease to be a thing of the kind insured or where the Member is irretrievably deprived of the ship, there is an actual total loss, the full insured amount shall be indemnified.
ii. Where no news has been received of the whereabouts of the entered ship over a period of 2 (two) months after the date on which she is expected to arrive at the port of destination, it shall be presumed an actual total loss and the full insured amount shall be indemnified.
iii. Where an actual total loss of the entered ship appears to be unavoidable or the cost of recovery, repair and/or salvage or the aggregate thereof will exceed the insured value of the entered ship, it may be deemed a constructive total loss and the full insured amount shall be indemnified after notice of abandonment of the ship is given to the Association irrespective of whether the Association accepts the abandonment. Once the Association accepts the abandonment, that ship shall belong to the Association.
iv. In the event of total loss of the entered ship, the insurance in respect of that ship under Rule 5 shall terminate automatically. However, the Member shall still be bound to pay the Association the Calls/Premiums in full for the policy year in which the termination occurs. The Member shall only be entitled to recovery from the Association in respect of total loss when he has paid in full the sums (including but not limited to the Calls/Premiums and the sums payable under Rules 25 and 26) due to the Association.
B. Partial Loss
Any loss other than an actual total loss or a constructive total loss is a partial loss.
i. Claims under this insurance shall be payable without deduction new for old.
ii. In no case shall a claim be admitted in respect of scraping, derusting or painting of the entered ship's bottom unless it directly relates to the repairs of plating damaged by an insured peril.
iii. Where repairs in drydock for Member's account necessary to make the entered ship seaworthy and/or a routine drydocking are carried out concurrently with repairs covered by the Association, then the costs of entering and leaving dock and the dock dues for the time spent in dock shall be borne equally by the Member and the Association.
Where it is necessary to place the entered ship in drydock for repair of the damage covered by the Association, the Association shall be liable for the cost of drydocking in full without any reduction, should the Member have survey or other work carried out while the entered ship is in dock provided the time for the survey or the work for the Member's account is not prolonged in dock or the cost of dock is not in any way increased.
iv. In no case shall any sum be allowed by this insurance either by way of remuneration of the Member for time and trouble taken to obtain and supply information or documents or in respect of the commission or charges of any manager, agent, managing or agency company or the like, appointed by or on behalf of the Member to perform such services, unless and to the extent that they have been incurred with the prior agreement of the Managers.
v. Where the insured amount of the entered ship is less than the agreed value or the contributory value in respect of general average or salvage, then the Association shall only be liable to pay such proportion of any loss or expense covered under this insurance as the amount insured bears to the agreed or contributory value.
vi. Where the entered ship comes into collision with or receives salvage services from another ship owned by the Member or under the same management, the Association shall have the same liability under this insurance as it would have were the other ship entirely the property of a third party.
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