Marine Insurance Volume 3: Hull Practice, 2nd Edition

This publication relates to English law and has been revised to reflect the changes in insurance practice that took place when the SG form of policy was replaced by the MAR form and associated new Institute clauses. However, it retains material from the first edition that is of value to markets where the SG form of policy, and relevant hull insurance conditions, are still in use.

This second edition also examines the structural and procedural changes effected since publication of the first edition, including the introduction of LIMNET (London Insurance Market Network), the restructure of Lloyd’s into a ‘single’ market and changes in placing and claims procedures.

Author’s Preface to the Second Edition

Marine insurance practice is constantly changing to keep pace with the demands of the trading markets it exists to serve. The first edition of this book sold out at a time when the London marine insurance market was entering a phase of transition and it seemed advisable not to reprint the book until things had settled down, so to speak. This proved to be a wise decision because the first edition examined the hull insurance contract as one based on the SG form of policy and considered practice in relation to Institute clauses designed for attachment to the SG form of policy; whereas the London market, in fact, replaced the SG form of policy with a simpler form of document known as the MAR form. The new form was adopted by the London hull insurance market in October 1983; and new Institute clauses were published for use with the new policy form. It follows that the first edition needed a complete revision to embrace the new form of contract used in the London hull insurance market. On the face of it such a revision would present no major problem if this book were designed for use solely in the London market. However, sales indicate that the book is used on a worldwide basis and research has shown that there are many markets outside the UK where the SG form of policy continues to be used. In order to provide a practical reference work which is suitable for insurance practitioners worldwide I decided to rewrite Volume 3; introducing the new hull insurance conditions whilst retaining such material from the first edition as is of value to markets where the SG form of policy, and relevant hull insurance conditions, are still in use. It would be confusing if one attempted to compare UK law regarding the marine insurance contract, and the responsibilities of parties connected therewith, with the laws of every other country in the world; so, except where stated otherwise, all comments herein relate to English law and practice.

During the five years it has taken to research and rewrite Hull Practice the London insurance market has seen dramatic structural and procedural changes. These include the introduction of LIMNET (London Insurance Market Network), restructure of Lloyd’s into a ‘single’ market and changes in placing and claims procedures. The new edition incorporates comment on these changes insofar as they affect marine hull insurance.

Chapter I – Introduction to Merchant Ships

Chapter II – Insurable Interest in Hull Practice

Chapter III – Effecting the Hull Insurance Contract

Chapter IV – Premiums, Premium Settlement and Return Premiums

Chapter V – Hull Policies and Marine Policy Construction

Chapter VI – Franchises and Deductibles

Chapter VII – Cover for Loss of or Damage to Ship

Chapter VIII – Marine Perils and the SG Form of Policy

Chapter IX – Marine Perils and the MAR Form of Policy

Chapter X – Perils Excluded from a Marine Policy

Chapter XI – Minimising Loss — Sue & Labour

Chapter XII – General Average and Salvage

Chapter XIII – Marine Insurance Warranties and Navigation

Chapter XIV – Duration of Cover in Hull Voyage Policies and Other Matters Concerning Hull Voyage Policies

Chapter XV – Duration of Cover in Hull Time Policies

Chapter XVI – Shipowner’s Liability Insurance

Chapter XVII – Hull & Machinery — Limited Terms Insurance

Chapter XVIII – Hull Interest Insurances

Chapter XIX – Insurance of Hull War and Strikes Risks

Chapter XX – Hull & Machinery — Port Risks and Builders’ Risks

Chapter XXI – Freight at Risk Insurance

Chapter XXII – Analysis of American Hull Clauses and Clauses Related Thereto

Chapter XXIII – Analysis of Institute Hull Clauses

Chapter XXIV – Yacht Insurance

Chapter XXV – Hull Claims (Part One) Underlying Principles and Practice

Chapter XXVI – Hull Claims (Part Two) Personnel and Procedures

Chapter XXVII – Hull Claims (Part Three) General Matters Concerning Hull Claims

Chapter XXVIII – Hull Claims (Part Four) Basic Claim Calculations (Repair Costs, etc)

Chapter XXIX – Hull Claims (Part Five) Basic Claim Calculations (Liabilities)

Appendix A – Marine Insurance Act, 1906

Appendix B – York-Antwerp Rules, 1974

Appendix C – Rules of Practice, 1986 (amended 1992)

Appendix D – Carriage of Goods by Sea Act, 1971

Appendix E– Hamburg Rules, 1978

Appendix F – Carriage of Goods by Sea Act, 1992

Robert H Brown, FInstAM, ACII

Chartered Insurance Practitioner

Principal Partner of Marine Insurance Training Services

Lecturer at the City of London Polytechnic (1955–1983)

Examiner for the Institute of Chartered Shipbrokers (1957–1983)