The American Club: Cover For War And Terrorism Risks, Andcover In Respect Of Biological And Bio-Chemical Weapons –2021 policy Year


This Circular describes the arrangements which have been made to provide special cover for war and terrorism risks, and cover in respect of biological and bio-chemical weapons for the 2021policy year.

War and terrorism risks

For 2021, cover for war and terrorism risks will remain available from the Club in accordance with the relevant proviso to Rule 3.1.1 of the Rules of Class I.

This cover will apply in excess of an insured vessel’s proper hull value, or $500 million, whichever is the lower amount, and will be for a limit of $500 million for 2021, the same figure as that which obtains for the current policy year.

Addendum I to this Circular sets out the terms of this excess cover. It will apply to all vessels insured on fully mutual conditions in accordance with the Rules of Class I, into the cover of which these terms will be deemed to be incorporated.

Cover in respect of biological and bio-chemical weapons

The International Group of P&I Clubs’ pooling facility to provide cover forcertain war and terrorism risks, which are otherwise excluded because most War Risk Hull and P&I policies contain a bio-chemical exclusion, will continue for the forthcoming policy year.

The risks covered by virtue of the pooling facility are in respect of a Member’s liability:

a.to pay damages, compensation or expenses in consequence of the personal injury to, or illness or death of, any seaman (including diversion expenses, repatriation and substitute expenses and shipwreck unemployment indemnity); and

b.for the legal costs and expenses incurred solely for the purpose of avoiding or minimizing any other P&I liability arising from a bio-chemical event (other than under Class 1, Rule 2, Section 20, being the “Omnibus Clause”).

The limit of cover will be $30million (the same as for 2020) any one event for each vessel.

Addendum II to this Circular sets out the terms of this cover. It will apply to all vessels insured on fully mutual conditions in accordance with the Rules of Class I, into the cover of which these terms will be deemed to be incorporated.

United States Terrorism Risk Insurance Program

The US terrorism risk insurance program, originally established by the Terrorism Risk Insurance Act of 2002 (TRIA), and as extended by legislation in 2015 to reauthorize it, has been further extended to December 31, 2027.

For eligible vessels, cover for such risks will be deemed to attract a premium of $0.0025 per GT per annum,and will be included in the vessel’s overall premium.

It should be noted that,under the terms of the extension of the original TRIA provisions to year-end 2027, an industry-wide cap of $100 billion will continue to apply to all claims recoverable on the basis of TRIA/TRIPRA provisions.

Should any Member have any questions as to the intention or extent of either special cover described above, the Managers will, as always, be pleased to respond.
Source: The American Club



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