Clause 5-9. Duties of the assured when a claim for damages covered by the insurance is brought against the assured
If a claim in respect of which liability is covered by the insurance is brought against the assured, the insurer shall be notified by the assured forthwith. The assured shall safeguard the insurer’s interests in the best manner possible, and, if necessary, make use of expert technical and legal assistance. The insurer is entitled to immediate access to all documents and other evidence.
If the assured, intentionally or through gross negligence, fails to fulfil the assured’s duties under the preceding sub-clause, the insurer shall only cover such losses as would have fallen on the insurer if these duties had been fulfilled.
Clause 5-10. Right of the insurer to take over the handling of the claim
The insurer may, subject to the consent of the assured, take over the handling of a claim brought against the assured and, if appropriate, institute legal proceedings in this respect in the name of the assured. This does not constitute an acknowledgement by the insurer of any obligation to cover any liability that might be imposed upon the assured.
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Clause 5-10. Right of the insurer to take over the handling of the claim
The first sentence states that the insurer may, subject to the consent of the assured, take over the handling of a claim brought against him. From the insurer’s point of view, it will always be desirable to be able to take over the handling of the assured’s disputes with third parties. In this ar…
Go to full Commentary pageClause 5-11. Decisions concerning legal proceedings or appeals
If there is disagreement between the insurer and the assured concerning the institution of legal proceedings or the lodging of appeals, the matter shall be finally decided by an umpire appointed jointly by the Nordic average adjusters.
The umpire shall choose the solution which, in its discretion, is likely to result in the smallest overall loss for the assured and its insurers. The umpire shall not take into account any advantage that the assured or an insurer may retain or obtain by the assured accepting, or attempting to have awarded against it, a higher degree of blame in a collision case.
If the assured does not comply with the umpire’s decision, the insurer whose standpoint has been upheld by the umpire shall in no case have to cover any liability beyond what the insurer had agreed to accept when the dispute was submitted to the umpire. If the assured institutes legal proceedings or appeals against a judgment contrary to the umpire’s decision, and if the proceedings or the appeal result in the insurer’s liability being less than what it had agreed to accept, the insurer shall, within the limit of what has been saved, pay its proportionate share of the litigation costs.
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Clause 5-11. Decisions concerning legal proceedings or appeals
Sub-clause 1 was amended in the 2013 Plan. Difficult questions may arise where the assured and his liability insurer disagree as to how to handle a dispute with a third party, for instance, whether to accept an offer of an out-of-court settlement, or whether to accept or appeal against a court…
Go to full Commentary pageClause 5-12. Provision of security
The insurer has no obligation to provide security for the assured’s liability to third parties.
The provision of such security by the insurer in no way affects the question of its liability to the assured.
If the insurer has provided security for a liability which is proved not to concern it, the assured shall refund the insurer its expenses in connection with the provision of such security.
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Clause 5-12. Provision of security
Under sub-clause 1 , the insurer has no legal obligation to provide security. Such an obligation could result in liability for him vis-à-vis the assured in cases where the security is provided too late, or where no security is provided at all due to unforeseen difficulties. However, in practice t…
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Clause 5-9. Duties of the assured when a claim for damages covered by the insurance is brought against the assured
The provision is closely bound up with Cl. 3-29 concerning the duty of the assured to notify the insurer of a casualty. Sub-clause 1 applies first and foremost where the assured is held liable for a loss which he has caused a third party, but it may also become applicable where a third party make…
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