constellation marine surveyors dubai presentation on warranty and marine

MARINE INSURANCE / WARRANTY

The Act Principles Warranties Common Findings

By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)

Call : +971 50 8979103www.marinesurveyordubai.com www.constellationms.com

http://www.marinesurveyordubai.com/

http://www.constellationms.com/

The Policy

By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : Website: www.marinesurveyordubai.com

The Marine Insurance Act, 1906

This act came into force on 1st January 1907.

It did’nt make any new additions law but only codified the existing legal decisions which had been recorded up to that time.

Marine insurance contracts are based on the principles laid down in this Act.

By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : WWW.marinesurveyordubai.com

THE PRINCIPLES OF MARINE INSURANCE

Five basic principles of Marine Insurance

Insurable interest Utmost Good Faith * Proximate Cause ** Indemnity SubrogationBy : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,

National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : Website: www.marinesurveyordubai.com


Utmost Good Faith: All contracts of marine insurance are

contracts ‘Uberrimae fidei’ i.e. of the utmost good faith’.

…. and if the utmost good faith be not observed by either party, the contract may be voided by the other party.

Marine Insurance Act 1906



Proximate Cause (or ‘causa proxima’ )is derived from the legal dictum ‘ causa proxima non remota spectatur’. This means that ‘the proximate and not the remote cause to be considered’. The Act provides that the insurer is liable for any loss proximately caused by a peril insured against.


Policy terms….

By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : www.marinesurveyordubai.com

Ie: More than 50% crew out on shore leave and fire breaks on board. - Or -Master intoxicated and its proven negligence of Command

Failure of an insured to comply with a warranty, for whatever reason, may result in the underwriter avoiding claims under the contract, which means the vessel is,in effect, uninsured as from the moment of the breach of warranty. As an example ,a term of a standard hull policy is that the insured must exercise due diligence in looking after his vessel. If a claim is made for, say, damage to the vessel whilst laid up,and it was shown that he neglected the vessel and did not maintain her, dependent on the circumstances,t he policy may be avoided and no claim paid.

Warranties

A warranty is a promise made by the assured that a particular condition shall be fulfilled, or a particular thing shall be done or otherwise, or confirm / negates that existence of a particular state of facts.

A warranty must be taken literally and must be exactly complied with by the assured. Any non compliance will lead to a breach of warranty and the insurer will be discharged from all liabilities under the policy from the date of such breach.


Warranties


THE WARRANTY CLAUSES AND THEIR MEANINGSWARRANTIES IN MARINE INSURANCE POLICIES

A warranty is the same as a “condition” on any other type of insurance policy. It is an express or implied contractual undertaking by the assured (the individual taking out the policy) that something will or will not be done.

The assured undertakes that some particular thing shall or shall not be done or that some condition shall be fulfilled or he affirms or negates the existence of a particular state of facts.

A warranty must be literally complied with, whether material to the risk or not.

An express warranty is written into the policy or contained in some document incorporated in the policy by reference to it.

Implied warranties are not written in the policy but are implied by law to exist in the contract of insurance. They must be strictly complied with as express warranties.

www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East

THE WARRANTY CLAUSES….

They may have reference specialised procedures or guidelines to be followed by the assured.

They may stipulate that the operation of the covered risk is always to be within the context of an approved operations manual.

They may require that the operation be overseen by a named third party whose professional competence and judgment is accepted by the underwriter as proof that it was carried out or will be carried out to agreed standards.

They may require that the competent third party issue a CERTIFICATE OF APPROVAL prior to the commencement of the operation in order for the insurance policy to become valid.

In addition the failure of the assured to abide by-the conditions of the CERTIFICATE OF APPROVAL may invalidate the contract of insurance.



THE ROLE OF A WARRANTY SURVEY COMPANY

These companies provide consultancy services to the marine and offshore

industries as third parties (Constellation Marine being one of them) giving

professional advice for fees. Their business success relies on their

unquestioned integrity, high professional standards and expertise.

Their business activities span both the insurance and marine industries and

they vary in size from quite small to very large and diverse companies.


OVERVIEW OF TYPICAL PRECAUTIONERY WORK

On-Site Evaluation at Departure Port

Tug Approval Survey Barge Survey Cargo Securing Inspection Operational Survey

Jack-up Rig Move

The example is a three-leg jack-up drilling unit (barge). It is presently located at position A where it is completing a workover on a platform and is to proceed to position B, a distance of about 150 nautical miles, where it is to perform an exploration drilling operation in an “open” location.. The client is the owner of the barge.


TUGS AND TOWING GEAR

Practical knowledge required Towing Vessel Requirement and Selection

Criteria – Minimum Towing Force – A well known warranty survey company requires that:

Sufficient towing power is available to hold the vessel being towed at zero speed against the following conditions:

Wind speed 44 knots Current speed 4 knots Significant wave height 25 feet Determining the power of oilfield

tugs


SURVEYOR’S INSPECTION OF A TOWING VESSEL

Inspection of the Vessel

The Towing Gear Ancilliary Gear Towing Machinery Working Deck Area At the Bow Mooring Ropes Machinery Spares Bridge Area


Following faults are grounds for outright rejection of OSVs/tugs for service:

1. Insufficient fuel, food, water, lubricating oil.2. Main engine broken down, steering gear broken down, tow winch broken down.3. Main or spare tow wire unserviceable due to being outside standard criteria for use

either due to damage or under size or length.4. Any main certificates out of date (including survey range dates).5. Damaged/in-sufficient life saving firefighting equipment.Boat under-powered for service required. Does not meet bollard pull criteria. 8. Damaged and inoperative power generation machinery leaving only one generator.9. Hull damage to boat such that stability criteria is impaired.10. Contaminated fuel such that engine reliability is doubtful.11. Tow Pennants, Towing Shackles, Towing Sprigs insufficient in number, insufficient in strength terms or damaged so as to be unserviceable.12. Navigational equipment outfit including radar, gyro compass etc, inoperative or damaged or insufficient such that accurate position fixing and navigation is unreasonably difficult.13. Incompetence of the master and officers such that lack of knowledge of towing and ship handling would imperil the operation.

SURVEYOR’S INSPECTION OF A TOWING VESSEL -PRECAUTIONS-


SURVEYOR’S INSPECTION OF A TOWING VESSEL

The following areas are those where experience and judgement count “more than” rigid guidelines or meeting precise criteria:

1. The true condition of tow wires, pennants, stretchers and all other towing running gear.2. The true condition of main engines and towing winches and steering gear.3. The amounts of spare parts and tools/equipment for the repair of main engines and auxiliary machinery. Class society spares are the minimum required.4. The knowledge and skill of the master, officers and crew.5. Defects which are borderline cases can be judged on deciding how they affect the operation of the boat for the particular operation concerned and whether they can be rectified or mitigated.Charter’s (or) Operators are always in a desperate rush to get the vessel into the fields - Go to Reputable Operators


WARRANTY SURVEYORS REPORT AND RECOMMENDATIONS EXTRACTS

Section Title Page No. 1. Documentation 0002. Drilling derrick and blocks 0003. Securing of legs 0004. Inspection required 0005. Helicopter deck 0006. Compartmentation 0007. Sounding pipes 0008. Pumping arrangements 0009. Openings in hull 00010. Anchors 00011Stowage of deck cranes 00012 Signalling equipment 00013 Navigation lights, sound signals and safety equipment 00014 Damage control equipment 00015 Additional recommendations 000

Lastly - The term I most often use is….

UTMOST Good Faith:

Marine insurance contracts are “Uberrimae Fidel” Contracts or contracts of Utmost Good Faith.

Hence, it is of very high importance for owners to have their vessel “seaworthy” at the start of the voyage.

To a lawyer sea worthiness is an absolute mine field, they are still discovering this term as we speak……..

any thoughts !By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : Website: www.marinesurveyordubai.com

Thank You very muchBy : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS)International Institute of Marine Surveying - UK (Regional Director-Middle East)Call : +971 50 8979103 : Website: www.marinesurveyordubai.com

constellation marine surveyors dubai presentation on warranty and marine

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