Clause 15-5. War between the major powers
The Clause was edited in Version 2016. It is intended to have the same effect as the Automatic Termination of Cover used for war risk insurance in the English market and regularly included in all war risks reinsurance contracts.
The provision means that if war or war-like conditions arise between two or more of the superpowers, the insurance terminates immediately. The expression “war-like conditions” is used to indicate that a formal declaration of war is not necessary for the provision to apply; it is sufficient that a state of war exists in reality.
View Clause Hide Clause
Clause 15-5. War between the major powers
In the event of war or war-like conditions breaking out between any of the following States:
The United Kingdom, the United States of America, France, the Russian Federation, the People’s Republic of China, the insurance against war perils shall automatically terminate.
Clause 15-6. Use of nuclear arms for war purposes
The Clause is intended to have the same effect as the nuclear arms clause used in the English market.
It follows from the first sentence that the insurance terminates immediately if nuclear arms are used for war purposes. The vessel need not be involved in the use of the nuclear arms for the provision to apply; nor need it be in an area which is excluded or subject to an additional premium under the insurance.
View Clause Hide Clause
Clause 15-6. Use of nuclear arms for war purposes
In the event of any use of nuclear arms for war purposes, the insurance shall automatically terminate.
Clause 15-7. Bareboat chartering
The Clause was edited in Version 2016 by inserting “automatically” instead of “immediately” in order to bring the wording in line with Cl. 15-6.
Firstly, the insurance will automatically terminate – and not just be suspended – if the vessel is chartered out under a bareboat charterparty. Secondly, the provision applies to all forms of bareboat chartering, not just bareboat chartering to foreign charterers. If the insurer has in advance agreed to co-insure a group of companies, of which one or more are bareboat charterers, the insurance will only terminate if the vessel without the insurer’s consent is bareboat chartered to a bareboat charterer outside the originally assured group of companies, cf. the Commentary to Cl. 18-65.
View Clause Hide Clause
Clause 15-7. Bareboat chartering
If the vessel is bareboat chartered, the insurance shall automatically terminate.
Clause 15-8. Cancellation
The Clause was amended in the 2027 Version.
Sub-clause 1 gives both the person effecting the insurance and the insurer the right to cancel the insurance of war risks when the risk has changed after the insurance contract was entered into. The cancellation relieves the insurer from its obligations under the contract. The parties are of course free to negotiate continued or new insurance on new terms and conditions. If the cancellation is given for the sole purpose of amending the Listed areas in Cl. 15-9, the insurance is, however, automatically reinstated upon expiry of the notice period with the Listed areas being amended, cf. sub-clause 3.
The cancellation is subject to seven days’ notice, but where the circumstances involve one of the States listed in Cl. 15-5, the notice period shall be 72 hours.
Sub-clause 2 sets out that the notice period shall commence one work day from midnight on the day of issue. Which days to be considered as “work day” shall be decided based on the location of the head office of the claims leader. Cancellations and terminations as per Chapter 15, Section 2, also applies to the rights of the mortgagee, cf. Cl. 7-2. However, sub-clause 2, second sentence, imposes a duty on the insurer to immediately notify the mortgagee of the cancellation, regardless of whether it was initiated by the person effecting the insurance or by the insurer.
Sub-clause 3 supplements sub-clause 1 stating that if “the notice of cancellation is given for the sole purpose of amending the Listed areas in Cl. 15-9, the war risks insurance will be automatically reinstated upon expiry of the notice period with the Listed areas being amended in line with the changes outlined in the notice”.
View Clause Hide Clause
Clause 15-8. Cancellation
In the event of a change of risk, the person effecting the insurance as well as the insurer is entitled to cancel the insurance of war risks by giving seven days’ notice, but where the circumstances involve one of the States in Cl. 15-5, the notice shall be 72 hours.