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Section 1: General rules relating to the scope of the insurance

  • Clause 18-1. Scope of application and applicable rules

    The rules in Part One shall apply with the following amendments:

    • Insurable value/Sum insured/Ref. Cl. 2-2 and Cl. 2-3
      MOUs which can disconnect from offshore field equipment may be scheduled in the insurance contract with separate sums insured for the MOU and the disconnectable equipment.

      When the MOU is disconnected and away from the offshore field location, the insurance operates as separate insurances for each insured object with separate sums insured as scheduled in the insurance contract.

      When the MOU is within the offshore field at which it is to operate or connected to the field equipment, they collectively constitute one insured object with the combined scheduled sums insured as the insurable value.
    • Perils insured against/Ref. Cl. 2-8 and Cl. 2-9
      The insurance does not cover loss resulting from the MOU being used for the drilling of a relief well for the purpose of controlling a fire, a blow-out or cratering associated with another MOU or offshore field installation.

      For MOUs under construction or conversion, ref. Section 6 below, the insurance covers perils as defined in Cl. 2-8 and strikes and lockouts.
    • Alteration of the risk/Ref. Cl. 3-8
      The storage and use of explosives or radioactive material on board the MOU in connection with its normal operations shall not be regarded as an alteration of the risk under Cl. 3-8.

    • Loss of the main class/Ref. Cl. 3-14
      When the insurance commences the MOU shall be classed with a classification society approved by the insurer.

      The insurance terminates in the event of loss of the MOU’s main class, unless the insurer explicitly consents to a continuation of the insurance contract. If the MOU is engaged in its normal operations offshore or under way when the main class is lost, the insurance cover shall nevertheless continue until the MOU terminates the ongoing operations in accordance with applicable regulations and the field operator's consent and arrives at the nearest safe port in accordance with the insurer’s instructions.

      Loss of main class occurs where the assured, or someone on the assured's behalf, requests that the main class be cancelled, or where the class is suspended or withdrawn for reasons other than a casualty.

      Cl. 3-8, sub-clause 2, second sentence, shall apply to a change of classification society.
    • Safety regulations/Ref. Cl. 3-22 and Cl. 3-25
      1. The well(s) shall be equipped with blow-out preventers (BOPs) or other well
        pressure control equipment of standard issue, installed and tested in
        accordance with standard practice.
      2. For MOUs that are to be moved, a separate MOU move plan shall

        be approved by the claims leader when;

        • the MOU does not move by own main propulsion, or

        • the MOU moves with its riser and BOP suspended.

        The MOU move plan shall be complied with during the move.

      3. For MOUs under construction or conversion, ref. Section 6 below, a surveyor approved by the claims leader shall be appointed to review the project plans and procedures for moves and lifts and, when applicable, offshore installation of components or modules, and prepare an initial risk assessment. On the basis of the initial risk assessment the claims leader shall approve the scope of survey levels required for the identified risk levels.

        When required by the claims leader for certain operations as per the scope of survey, the surveyor shall issue a certificate of approval when it is satisfied with the preparations for the operation. The operation at issue can commence upon receipt of the surveyor’s signed certificate of approval.

      The regulations in (1) and (2) are regarded as special safety regulations in relation to Cl. 3-25, sub-clause 2, and the regulations in (3) are regarded as safety regulations in relation to Cl. 3-25, sub-clause 1.
    • Measures to avert a blow-out, etc./Ref. Cl. 4-7 to Cl. 4-12
      The insurer is not liable for loss caused by measures to avert or minimise blow-outs, cratering or fire in connection with a blow-out.

      Loss or damage to the insured MOU caused by such measures is nevertheless covered.

    • The limit of liability of the insurer/Ref. Cl. 4-18
      The Hull & Machinery (H&M) insurer is liable up to the sum insured for loss caused by any one casualty. The H&M insurer is also liable up to an equivalent amount, not exceeding USD 500,000,000 for the costs of measures taken to avert or minimise loss arising in connection with the casualty. If the costs of such measures exceed that amount, the H&M insurer is also liable to the extent that the sum insured has not been exhausted by the compensation paid for loss of or damage to the MOU.

      The H&M insurer has a separate liability in accordance with the rules contained in Cl. 18-35 to Cl. 18-37 for liability to third parties which is a result of collision or striking.

    • The area of operation/Ref. Cl. 3-15 
      The area of operation is limited in accordance with the ordinary trading area as per Cl. 3-15, sub-clause 1, unless otherwise defined in the insurance contract. Any operation in the excluded or conditional trading areas is subject to Cl. 3-15. The maximum deduction in Cl. 3-15, sub-clause 3, shall be USD 1,000,000. The provision in Cl. 18-34 shall apply correspondingly. 

      If the MOU is to change the area of operation defined in the insurance contract, the insurer shall be notified promptly. Both parties may in that event demand adjustments of the premium. Notice of any increase in premium shall be given to the person effecting the insurance within fourteen days of receipt of notification.

    • Waiver of subrogation and co-insurance of third parties/ Ref. Cl. 8-1
      The insurer does not have any right of subrogation against a person if it has been granted contractual protection against recourse, provided that such contractual regulation is regarded as customary in the activities in which the MOU is involved.

      The insurance is effected for the benefit of anyone who is contractually entitled to be co-insured under the insurance, provided that such contractual regulation is regarded as customary in the activities in which the MOU is involved. If the co-insured’s claim is covered by other insurance it has effected, cover under this provision is subsidiary to that other insurance.

      Under no circumstances shall the waiver of subrogation and/or co-insurance granted under this clause exceed the person or parties’ rights or indemnities under the contract.
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    Clause 18-1. Scope of application and applicable rules

    This provision was amended in 2016. The first sentence establishes that the rules in Part One shall apply unless specifically amended under this Clause. It is no longer deemed necessary to state in cl. 18-1 that Chapter 18 only applies to the extent it is set out in the insurance contract. The 19...