CIR

CU

LA

R N

O. 6

37Den Norske Krigsforsikring

for SkibGjensidig Forening

The Norwegian Shipowners’ Mutual War Risks Insurance Associaton

Insurance and premium conditions 2013

Introduction and overviewp. 2

Conditional trading areasp. 4

Standard coverp. 5

Piracyp. 7

DNK Specialcoversp. 8

Introduction and overview/ 1 /

2

Insurance and premium conditions 2013

The standard DNK policy covers, on the basis of the Nordic Marine Insurance Plan of 2013; total loss, damage, collision liability, hull/freight interests, loss of hire, owner’s liability (P&I) and occupational injuries caused by war perils.

This circular provides a simplified summary of the comprehensive war risk cover for 2013. We refer to the insurance conditions found in the vessels’ policy and the Nordic Marine Insurance Plan of 2013 (hereinafter NMIP) for details and compulsory rules.

Annual PremiumThe Board has decided that the basic annual premiums shall be as follows::

The above premium is applicable to ships in ordinary trade only. If the ship is to be used for other purposes, e.g. as a storage ship or an accommodation unit, this must be reported in advance to DNK and rates must be agreed on an individual basis.

VESSELTYPE RATES

All vessels other than below 0,0045 %

FPSO vessels and mobile offshore units 0,008 %

Cruise vessels 0,010 %

Passenger vessels/ferries certified to carry more than 500 passengers, or passenger vessels/ferries engaged in international trade

0,0055 %

Additional premium for P&I insurance for cruise vessels 0,0050 %

Minimum premium USD 750,- / NOK 4200 (or equivalent in applicable currency)

No return of premium during lay-up

CIRCULAR NO. 637

3

Please find below an overview of the losses covered, as well as limits and deductibles for the different elements of the DNK cover.

The same set of insurance conditions will be used for both conventional ships and offshore units. In respect of offshore units the policy itself contains a provision making it clear that the rig or unit is insured on the basis of NMIP § 18-59, which means that chapter 18, section 2-4 applies in addition to chapter 15.

Chapter 17 Section 4 on Catch and Equipment and/or Section 5 on Nets and Seines in the sea shall apply to fishing vessels if so provided in the Policy. There are no deductibles for claims pursuant to NMIP §§ 17-28 and 17-31.

All mortgagees are automatically co-insured and will furthermore enjoy the extended cover provided by NMIP § 8-4. The same applies for all named co-insured (other than the mortgagees) who are covered by express agreement pursuant to NMIP § 8-1.

RISK COVERED LIMITS

Major powers war 30 days and USD 1 billion in aggregate

Hull & Machinery Insurance value

War P&I and occupational injury USD 300 mill / 400 mill (cruise)

Loss of Hire 180/180 day open cover

DEDUCTIBLE

–

–

–

7 days, 14 days in AP areas

180/180 day open coverUSD 30 mill per occurrence and in aggregate per yearMaximum daily cover USD 100,000

7 days10% self-insured retention

Extended Loss of Hire w/o physical damage

RACE II USD 150 mill per vessel and per year–

USD 7.5 mill per vessel per occurrenceUSD 75 mill in aggregate per yearFor passenger vessels:USD 2.5 mill per vessel per occurrenceUSD 25 mill in aggregate per year

–Biochem

Newbuildings basic coverpre-launch

USD 50 mill per vesselUSD 500 mill in aggregate per year

–

Newbuildings basic coverpre-launch

Insurance value–

Newbuilding excess cover USD 50 mill per vessel USD 500 mill in aggregate per year

–

Crew Liability due to RACE II perils (§ 2-9(2)b) USD 1 mill per vessel and USD 10 mill in aggregate per year

–

4

/ 2 / Conditional trading areas

Vessels are allowed to trade world-wide without notifying DNK except in those areas that are listed as conditional trading areas.

According to NMIP § 15-9 the vessel may still sail in conditional trading areas, but will need to notify DNK and the trip will be subject to an additional premium. The list of additional trading areas may be changed with immediate notice. An updated list of conditional trading areas can be found on DNK’s website.

Members are obliged to notify DNK of their calls to conditional trading areas at least 48hrs prior to entering a said area. If damage or total loss occurs while the ship is in a conditional area without notice having been given, the claim may be settled subject to a deduction of up to 50%. The same applies to costs to avert or minimise the loss, including salvage and general average.

CONDITIONAL TRADING AREAS WILL BE LISTED AS FOLLOWS

NIL No duty to notify calls to the area

No AP Duty to notify, but no additional premium payable

Rate to be agreed Duty to notify and additional pre-mium will apply

H/C(Held Covered)

Signals a particularly high risk area where there is no predetermined rate. Approval and rating will be done on an individual basis

CIRCULAR NO. 637

5

/ 3 / Standard cover

The subject of hull and machinery war risk insurance is, as in general marine insurance, the vessel itself. Under the DNK cover, loss, damage or collision liability and hull/freight interests are covered if the event causing the damage is a war peril.

In addition to the standard hull and machinery type losses, the DNK war risk insurance will also compensate the owner for the total loss of the ship if he has been deprived of the ship by the intervention of a foreign State power, or if the ship is prevented from leaving a port or a similar limited area.

The total amount covered with DNK should always be equal to the total sum insured in respect of marine perils, including disbursements and other assessed value insurances against total loss of the ship.

Members may request the sum insured changed by giving 14 days’ notice to DNK.

DNK offers a standard Loss of Hire/blocking and trapping cover as well as a limited additional cover for Loss of Hire without physical damage as part of the standard policy to all Members at no separate charge.

Standard Loss of HireThe DNK standard cover for Loss of Hire is regulated in NMIP chapter 16 and chapter 15, section 6. The cover is an open cover, which means that the daily loss to be indemnified must be substantiated by the assured when a loss has occurred.

CIRCULAR NO. 637

Hull and Machinery Insurance

Loss of Hire Insurance

COVER STRUCTURE

Overall limit –

Maximum daily amount Open cover

Deductible 7 days, 14 in conditional trading area and 30 days in case of trapping due to closure of the Hormuz Strait

Retention –

Maximum recovery 180 days per occurrence and in all

6

Limited additional cover for Loss of Hire DNK members also benefit from a limited additional cover for loss of hire without physical damage to the vessel. The cover applies regardless of whether the vessel has sustained any physical damage if

› The vessel has been struck by a war peril as defined in NMIP § 2-9, and› the assured is entitled to compensation for either costs of measures to avert or minimise the loss and/or compensation according to the war P&I insurance or

war occupational injury insurance

This cover is subsidiary to the standard Loss of Hire cover as described above and to other such covers against war risks which the assured may have affected with other insurers.

CIRCULAR NO. 637

COVER STRUCTURE

Overall limit USD 30 000 000 per occurrence and in all

Maximum daily amount USD 100 000

Deductible 7 days

Retention 10% self-insured retention

Maximum recovery 180 days per occurrence and in all

All vessels insured with DNK are automatically insured for war P&I and occupational injury according to NMIP chapter 15, section 7 and 8.

The DNK policy covers the same liability and expenses normally covered by the ship’s P&I insurance, when caused by a peril of war, provided it is placed with one of the associations within the International Group of P&I clubs. Alternatively, DNK’s liability will be determined by Gard rules.

The separate sum insured is USD 300 mill for all types of vessels, the exception is cruise vessels which are insured for USD 400 mill. The DNK standard war P&I cover is compatible with the excess war risks P&I cover currently offered as standard cover by the members of the International Group of P&I Clubs. For cruise vessels the war P&I and occupational injury insurance cover is subject to additional premium. For all other vessels war P&I and occupational insurance cover is included without additional premium.

War P&I and occupational injury insurance

7

Piracy/ 4 /

DNK does not offer any specific “K&R” (kidnap and ransom) insurance product, however the DNK standard insurance covers loss and damages, costs to avert or minimize loss, crew liability and loss of hire caused by piracy.

The Sue and Labour provisions of the NMIP (§§ 4-7 and 4-12) give a clear legal authority for insurers to cover “reasonable costs incurred to avert or minimise loss” which may include ransom payments and costs related to such transactions. Each hijacking case and request to contribute to reasonable costs incurred will be evaluated by DNK’s Board of Shipowners before final decision.

In 2010, DNK introduced the “Horn of Africa Supplement” which further extends the standard cover under the NMIP through a General Average-absorption clause and a Loss of Hire element.

Based on the Supplement, there is no need to declare General Average and the Association will indemnify all costs that would have been recoverable in a General Average settlement.

The additional cover for Loss of Hire without physical damage (see above) already provides cover in case of hijacking by pirates. The Horn of Africa Supplement removes the 7-day deductible and the 10% self-insured retention, thus granting full recovery of daily loss up to USD 100 000 from day one.

The DNK standard cover also includes P&I/occupational injury insurance and thus recovery for costs related to medical support, etc. for crew members. Furthermore the costs of response consultants, delivery of ransom, insurance of ransom in transit and other related costs are also included.

In addition to covering the costs related to such, DNK maintains a broad network of carefully selected specialists and advisors who are available for our members in case of a hijacking situation as part of our contingency support arrangements.

Indian Ocean transitsIn respect of navigation off the Horn of Africa and adjacent areas members are urged to follow the ‘Best Management Practices to Deter Piracy in the Gulf of Aden and Off the Coast of Somalia’ promulgated by international shipping organisations, and to follow IMO, MSC-HOA and UKMTO advice with regard to recommended transit corridors, preventive measures, notifications, etc. The latest version of the BMP and other related information are available on DNK’s website. If members choose to employ armed guards to secure their vessel, they are obliged to notify DNK according to NMIP § 3-11.

Cover elements relevant to piracy

CIRCULAR NO. 637

8

DNK Special covers/ 5 /

Automatic TerminationIn the case of war or warlike conditions between any of the fixed member nations of the UN Security Council a special DNK major powers war cover comes into effect. Any war risk cover would normally automatically cease, but DNK offers and extends the cover such that it remains in effect for 30 days with a maximum aggregate limit of USD 1 billion.

RACE and requisition by own Flag State DNK also offers a limited cover for total loss and damage caused by RACE II perils and for requisition by own flag state. This cover applies to all ships and moveable structures, but not to newbuildings. The limit is USD 150 mill per vessel per year and for the total liability in aggregate per year for DNK.

Contingency expenses Furthermore the insurance includes a limited cover for certain contingency expenses arising directly out of the use of any chemical, biological, bio-chemical, or electro-magnetic weapon. The limits for this cover are as follows:

For passenger vessels:USD 2.5 mill per vessel per occurrenceUSD 25 mill in the aggregate per year

For all other vessels:USD 7.5 mill per vessel per occurrenceUSD 75 mill in aggregate per year

Crew liability in relation to RACE II perilsAs of 01.01.2012, the DNK standard cover is extended to cover members’ cost of repatria-tion, medical expenses, liability for injury and death to the master, officers and crew caused by RACE II perils. Costs are covered up to a limit of USD 1 mill for each vessel and USD 10 mill in aggregate per year.

CIRCULAR NO. 637

9

Vessels under construction / 6 /

For vessels under construction, DNK offers a facultative cover for the total construction period pre- and post-launch. The DNK special conditions are based on NMIP Chapter 19.

The cover consists of a basic element which may be extended with an additional element expanding the losses covered.

Please find below an overview of the losses covered as well as limits and premium information.

Cover

Pre launch

Post launch

Losses covered Limit per occurrence

Limit in the aggregate

Premium

– Total loss in the event of condemnation,– Total loss where the yard’s obligation to deliver no longer applies– Damage– Unrepaired damage– Non-delivery due to state of war

USD 50 mn

Insurance value

USD 500 mn

Insurance value

Depending on country of build

0,0125 %

Pre launch

Post launch

– Delayed delivery– Increased costs of replacement– Costs and expenses

USD 50 mn

USD 50 mn

USD 500 mn

USD 500 mn

Depending on country of build; combined pre-mium for basic & additional cover

0,0125 %

CIRCULAR NO. 637

Basic cover

Additional cover

10

General Information/ 7 /

Members and the assureds are reminded that the International Ship and Port Facility Security Code entered into force from 1st July 2004. The U.S. Maritime Transportation Security Act and other local regimes implementing the ISPS Code are in force and must also be complied with when applicable. Both the ISPS Code and the U.S. Maritime Transportation Security Act are safety regulations pursuant to § 3-22 of NMIP, and violations of any of these rules may prejudice the war risk cover, cf. § 3-25 of NMIP. This applies equally to other national or regional legal or regulatory regimes implementing the ISPS Code or establishing local security requirements. The members and the assureds are therefore urged to carefully comply with these rules to the extent they are applicable for the trade in question for the individual ships covered with DNK.

The latest “Notices to Mariners”, or alternatively the corresponding American publica-tions, shall be available on board together with up-to-date charts in order to assist in determining the mine perils from previous wars or current conflicts. The publications may be obtained through Nautisk Forlag A/S (www.nautisk.no).

Oslo, 19. December 2012

– The Board –

CIRCULAR NO. 637

DNKRådhusgaten 25, P.O. Box 1464

Vika, NO-0116 OSLO, NorwayTel.:+47 22 93 68 00Fax.: +47 22 93 68 01

www.warrisk.no

Den Norske Krigsforsikring for Skib

Gjensidig Forening

The Norwegian Shipowners’ Mutual War Risks Insurance Associaton