All Ancillary Covers in one PDF - The Swedish Club

Ancillary Covers

Charterer’s InterestNarrativeA charterer - normally a time charterer - may have a further interest in the chartered vessel. For example, theship may be sub-let on a time charter or the charterer may have a purchase option. This interest is insurable.DescriptionCharterers commonly charter ships either on a voyage or time charter basis. Primarily in the latter circumstances,the chartered vessel represents future income. Naturally, should the ship be lost, the charterer will not paycharter hire, but he may find it hard to secure a replacement vessel either at the same rate or a ship so suited tothe intended trade. As a result, the charterer may not earn the future freight, as anticipated.In order to cover this exposure, the charterer can protect himself by a total loss insurance known as Charterer’sInterest. Should the chartered ship become a total loss, the charterer will be indemnified by this cover.As there is no entitlement to earn money on insurance, but rather only to make good losses - this cover isoften provided on a reducing basis. For example, if the charterer anticipates a profit of USD 1.2 million on thevessel during a charter period of, say, one year, his interest when the charter is signed will be that sum. Afterone month, however, he has earned USD 100,000 and, therefore, his insurable interest at the start of thesecond month is reduced to USD 1.1 million. This cover is often written on a daily reducing basis. On the lastday of cover, where there is no future profit at risk, the insured amount is at zero.This note is a general description of Charterer’s Interest insurance. For more detailed information, pleaserefer to the slip or Certificate of Entry.ConditionsThis cover is based on Charterer’s Interest on Increased Value, Total Loss Only.••This insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities)Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothenburg,as per Arbitration Clause Gothenburg (B.1.1). Amended to Total Loss Only.••The Articles of Association and current circulars.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Conditions for Hull and Machinery, where applicable.••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.••Reducing: the insured amount in this policy reduces by USD (amount) per day/month from date ofinception.••Premiums and rates are calculated on the insured amount at inception of the policy.••Premiums are payable quarterly in advance, 1 January, 1 April, 1 July and 1 October. Delay in paymentmay render cancellation of cover and interest on delay, as per Rules of the Association.••War included, if agreed.7www.swedishclub.comVers. 2/sept/2007

Charterer’s All Inclusive CoverNarrativeA person or a company acting as charterer of a ship assumes responsibilities broadly similar to those of anowner. The contracting parties - normally a cargo owner or sub-charterer - will view the charterer as the“owner” of the ship. The charterer also assumes liabilities towards the vessel owner, including damage inflictedon the ship.In addition a charterer - normally a time charterer - may have a further interest in the chartered vessel. Forexample, the ship may be sub-let on a time charter or the charterer may have a purchase option. This interestis insurable.Finally, the charterer may have an insurable interest if the chartered ship sustains damage resulting in aparticular average covered under the H&M policy. Furthermore, the lost earnings, in the case of a sub-let ship,represent an insurable interest.This insurance offers comprehensive cover in respect of the charterer’s liabilities, interest in the event of atotal loss and interest in the case of a particular average on the chartered ship.DescriptionCharterer’s LiabilityMost ships are chartered either on a Time Charter or Voyage Charter contract. In both cases the chartererbecomes liable as he occupies a position similar to an owner towards the sub-contracting party (either a subchartereror cargo owner). His liabilities towards third parties are then broadly similar to those of a shipownerincluding liabilities for cargo and oil pollution.Simultaneously, the charterer assumes liabilities towards the party he charters the ship from - the vesselowner or another charterer. Primarily, this type of liability relates to vessel damage caused by, for instance,cargo-handling, unsafe port or berth and bad bunkers.Charterers in any role, whether as voyage charterers or time charterers, need cover for this exposure. Evenwhere the charterparty contractually imposes the liability on the shipowner, most jurisdictions allow a claimantto pursue compensation from a party he finds most suitable. The claimant has freedom of choice, to sueeither the charterer or the owner. The charterparty will eventually determine, contractually, who should bearthe cost, but this may follow a long legal process. Charterer’s Liability insurance is a P&I cover primarily, butfor charterers with a fixed premium.Since claims between an owner and a charterer frequently concern hull damages the cover may also includeCharterer’s Liability to Hull. Even if the contract is on a Voyage Charter, where the shipowner may have anobligation to ensure named ports are safe for his ships, the charterparty may name a range of ports fordischarge. If the port is unsafe, the charterer may have a liability to the shipowner, should damage to the shipoccur. Stevedore damage to vessels is commonplace when loading or discharging cargo. This is yet anothertypical liability imposed on the charterer.All charterers, regardless of position in the “chartering chain”, require cover for both P&I liabilities and damageto hull. As soon as there is a binding fixture, whether voyage or time charter, the charterer has an insurableexposure.9www.swedishclub.comVers. 2/sept/2007

Charterer’s All Inclusive Cover••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.••Reducing: the insured amount in this policy reduces by USD (amount) per day/month from date ofinception.••Premiums and rates are calculated on the insured amount at inception of the policy.••Premiums are payable quarterly in advance, 1 January, 1 April, 1 July and 1 October. Delay in paymentmay render cancellation of cover and interest on delay, as per Rules of the Association.••War included, if agreed.Charterer’s Loss of Hire••Full Norwegian conditions, in accordance with chapters 1-9 and 16 of the Norwegian Marine InsurancePlan of 1996, latest version - all to be interpreted according to Norwegian law and with jurisdiction asper §1-4 of the plan.The Articles of Association and current circulars, with the following special conditions regarding limits, deductiblesand deductions:••§16-4: Limit of cover per casualty and year, as agreed.••§16-7: Deductible period, as agreed.••§16-7: Additional Machinery Damage Deductible period, as agreed.Club Clauses••The Swedish Club Amended fleet clause A.1 – Fleet.••The Swedish Club Claims Lead Clause A.4.••The Swedish Club Tender Clause A.6.••The Swedish Club Condition Survey Clause A.7.2.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).•• Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).11www.swedishclub.comVers. 2/sept/2007

All Inclusive S.O.L.Shipowner’s Liability CoverNarrativeThere are numerous occasions when a shipowner has to deviate from the normal route or the agreed B/L. Inthese situations, there is exposure to cargo liability. Such deviations to the B/L can be covered on the specificoccasions by the Club but we also offer an “All Inclusive S.O.L. cover” which provides for liberties to deviateunder the policy period.DescriptionThe “All-Inclusive S.O.L. cover” includes a number of specific liabilities that are mainly excluded from the P&Icover. By tailor-making this cover for an individual member he may use this cover as a back-up to the P&Iduring the policy period. Deductibles are similar as for P&I and this will thereby create a seamless cover forthe member. A brief description what this cover can include is:Deviation coverP&I rules clearly exclude any deviation ordered by the shipowner. A deviation may be for the purposes ofbunkering or crew change, but may also be for provisioning and taking on of spares. Not allowed deviationsfrustrate the B/L and so denies the shipowner any limitations under the rules governing the B/L (e.g. theHague-Visby Rules). Should the deviation for any purpose be excluded from P&I cover, the shipowner requirescover for the risk of breaching the B/L.Extended ware-house coverCargo being accepted for shipment or delivery beyond the normal P&I rule of 14 days. The extended storageprior or after the transport.LighteringCargo being transhipped or lightered at a port. May not be covered under the P&I if it is a frustration of the B/L.Dry-docking with cargo on boardThe member decides to leave cargo on board during dry docking. This can be a breach of the B/L and therebynot covered under P&I.Storage of cargo whilst under repairsCargo may have to be temporarily stored whilst the vessel is undergoing repairs. This extended exposure maybe included in the cover.Additional cover may include subject to special terms Ante dated Bill of Ladings.This note is a general description of the All Inclusive S.O.L. cover. For more detailed information, please referto the slip or Certificate of Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded by the deviation/feedering/transhipment/storage/lighteringof the cargo, up to the agreed limit (the cargo value).13www.swedishclub.comVers. 2/sept/2007

S.O.L. Shipowner’s LiabilityTransshipment-Feeder-Storage Lightering-Drydocking with CargoNarrativeThere are several situations when a shipowner has to adopt measures and deviate from the normal procedures.In these situations, there is exposure to cargo liability. S.O.L. cover is designed for such special cases.DescriptionIf a vessel has to drydock with cargo on board, the Bill of Lading may be frustrated and the shipowner willloose P&I cover. S.O.L. insurance covers this additional exposure. This exposure also applies if a cargo has tobe transhipped, stored, feedered or lightered. The defence under the B/L is frustrated and P&I cover lost. Thepotential liability is the value of the cargo declared.This note is a general description of S.O.L. For more detailed information, please refer to the slip or Certificateof Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded by the feedering/transhipment/storage/lighteringof the cargo, up to the agreed limit (the cargo value).15www.swedishclub.comVers. 2/sept/2007

All Inclusive Crew CoverNarrativeA shipowner may have various exposures for his contracted crew which may not directly be associated withan entered ship. Typically he may have crew prior to delivery of a newbuilding or a ship bought in the secondhandmarket. There may be crew on leave involved in a training course. Crew members may cause damage tothird party and the shipowner may assume liability thereof. This cover addresses these liabilities.DescriptionThe “All-Inclusive Crew cover” includes a number of specific liabilities that are mainly excluded from the P&Icover. By tailor-making this cover for an individual member he may use this cover as a back-up to the P&Iduring the policy period. Deductibles are similar as for P&I and this will thereby create a seamless cover forthe member. A brief description what this cover can include is:Pre Delivery CrewA few weeks prior to taking over a ship, purchased in the secondhand market, the owner will send a fewofficers and engineers on board to familiarise themselves with the ship. From the moment staff commencethe journey to the ship, the owner is liable according to the terms of their employment contracts. At the timeon board they may cause damage to the not delivered ship where the shipowner may become liable.Crew at shipyardTo familiarise themselves crew are often sent to the shipyard prior to delivery and they may also act as representativesof the shipowner. Since the ship is not yet delivered there is no P&I cover for the ship. The shipownermay anyhow be liable for the crew and damage caused.Crew attending training coursesMost shipowners will from time to time have their crew on leave to attend seminars or training courses. Sincethe crew technically is not on board an entered ship, the P&I cover is not in place. The shipowner may still beliable according to the contract.Superintendents at yard or on boardSimilar situations as described for the crew above may also be applicable for Superintendents, at the yardtaking delivery or on board a purchased vessel. The shipowner’s cover under P&I may not be sufficient and hemay assume liabilities.This note is a general description of All Inclusive Crew cover. For more detailed information, please refer tothe slip or Certificate of Entry.Conditions••The cover is based on The Swedish Club Rules for Protection & Indemnity, current version, limited tocrew liability cover as per Rule 3.17www.swedishclub.comVers. 2/sept/2007

Crew FamiliarisationLiability CoverNarrativeA shipowner purchasing a ship or taking delivery of a newbuilding will always have a few crew members onboard prior to delivery. In these circumstances, the liability associated with the crew is compounded by exposureto liabilities arising from the actions of his personnel against a third party, such as the current owners orthe yard. This cover addresses these liabilities.DescriptionA few weeks prior to taking over a ship, purchased in the secondhand market, the owner will send a fewofficers and engineers on board to familiarise themselves with the ship. From the moment his staff commencethe journey to the ship, the owner is liable according to the terms of their employment contracts. These risksare covered by Pre-delivery Crew cover. The owner may also become liable, however, for the actions of hispersonnel in terms of consequences to current owners or other third parties. During the familiarisation processa pre-boarded crew member may cause damage to the ship. In this situation, the seller will hold the buyerliable. The problem here is that, since he is not the owner by title, he has no cover under P&I, as P&I cover islimited to liabilities in his capacity as an owner, operator or charterer of the ship. The same principles applyto a newbuilding, where the new crew join in increasing numbers prior to the official delivery date. These riskscan be addressed by additional cover, added prior to ordinary P&I cover.This note is a general description of Crew Familiarisation Liability cover. For more detailed information,please refer to the slip or Certificate of Entry.Conditions••Crew Familiarisation Liability Clause – P.11.••This insurance is to indemnify the member in respect of legal and/or contractual liability arising fromthe presence of officers and/or crew and/or supernumeraries and/or supercargoes and/or superintendentsand/or other personnel on board a non-owned vessel, whether or not such vessels are entered inthe Association.••The Swedish Club P&I Rules, current edition.••War Inclusion Clause – W.11.••Notice of Cancellation clause, Automatic termination of cover and Five powers war exclusion clause –W.1.4.1.••Extended radioactive contamination exclusion clause – C.1.4.••Limit of liability: USD 7 million.••Deductible: USD 20,000 per accident or occurrence or series of accidents or occurrences arising out ofa single event.19www.swedishclub.comVers. 2/sept/2007

Pre-Delivery Crew CoverNarrativeA shipowner purchasing a ship or taking delivery of a newbuilding will always have a few crew members onboard prior to delivery. The liabilities associated with crew in these circumstances require insurance cover. Thiscover addresses these liabilities.DescriptionA few weeks prior to taking over a ship purchased in the secondhand market, the owner will send a fewofficers and engineers on board to familiarise themselves with the ship. From the moment staff commencethe journey to the ship, the owner is liable according to the terms of their employment contracts. The problemhere is that, since he is not the owner by title, he has no cover under P&I, as P&I cover is limited to liabilitiesin his capacity as an owner, operator or charterer of the ship. The same principles apply to a newbuilding,where the new crew join in increasing numbers prior to the official delivery date. These risks can be addressedby additional cover, added prior to ordinary P&I cover.This note is a general description of pre-delivery crew cover. For more detailed information, please refer tothe slip or Certificate of Entry.Conditions••The cover is based on The Swedish Club Rules for Protection & Indemnity, current version, limited tocrew liability cover as per Rule 3.21www.swedishclub.comVers. 2/sept/2007

Deviation InsuranceNarrativeThe vessel is obliged, under the terms of the Bill of Lading, to transport cargo from the port of loading to theport of discharge. This implies that the shipowner may not deviate to another port for the purposes of bunkering,crew change or the loading of provisions or spares. In the event of a deviation, the resulting liability iscovered by Deviation Insurance.DescriptionP&I rules clearly exclude any deviation ordered by the shipowner. A deviation may be for the purposes ofbunkering or crew change, but may also be for provisioning and the taking on of spares. Should the deviationfor any purpose be excluded from P&I cover, the shipowner requires cover for the risk of breaching the B/L.Should an emergency arise, however, P&I will meet the liability.The B/L may include a clause allowing the owner to deviate in order to bunker. In such circumstances, theshipowner may deviate for bunkering, according to the clause, and may at the same time acquire provisionsand change crew. This is not regarded as a frustration of P&I cover.If the B/L includes a clause permitting the shipowner to deviate for bunkering but he deviates solely foranother purpose, such as provisioning or crew change, P&I cover is frustrated and Deviation Insurance isrequired.Should the charterparty include a “liberty clause”, giving permission to deviate for bunkering, the coverdepends on the wording of the Bill of Lading(s). The mere inclusion of a liberty clause in the charterparty doesnot warrant a liberty to deviate. It is the cargo owner’s decision (that is, the holder, at any time, of the B/L)that provides permission to deviate. Without B/L permission, there is no right to deviate and, therefore, P&Icover is frustrated and Deviation Insurance is required.Deviation Insurance covers the excluded cargo liability risk. The cover is based on cargo value. Deviationfrustrates the B/L and so denies the shipowner any limitations under the rules governing the B/L (e.g. theHague-Visby Rules).Any other liability during deviation is covered under normal P&I rules.This note is a general description of Deviation Insurance. For more detailed information, please refer to theslip or Certificate of Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded by deviation, up to theagreed limit (the cargo value).23www.swedishclub.comVers. 2/sept/2007

Passenger DeviationNarrativeFrom time to time a non-passenger vessel may carry passengers or supernumeraries (e.g. an officer or a crewmember accompanied by a relative or spouse). Some of the associated liabilities may not be covered underP&I Rules. Passenger Deviation insurance covers these risks.DescriptionThere is an increasing interest in the possibilities of travelling as a passenger on ordinary cargo vessels. Thereis an increased risk, primarily the possibility of deviation into a port if a passenger has to be landed due toillness. The same might apply to a relative of an officer or crew member on board for the voyage or a period.Passenger Deviation cover provides for the additional cost of such deviation, including harbour expensesand any delay to the vessel. There is a main exclusion for pregnancy. Passengers or relatives should not jointhe ship if they are pregnant. The cost of cover depends on age. In the case of passengers over 65, a satisfactorymedical certificate must be produced prior to commencing the voyage.This note is a general description of Passenger Deviation insurance. For more detailed information, pleaserefer to the slip or Certificate of Entry.ConditionsThe cover is based on:••Payment of up to (agreed amount) per day or pro rata, maximum 10 days, plus harbour etc. expenses,up to (agreed amount) in the event of the vessel having to deviate or being delayed owing to illness oraccident befalling one or more passengers on board.••Excluding any claim covered by other policies.••Express warranty: warranted no claim arising from pregnancy.••War inclusion clause W.11.••Radioactive Contamination Exclusion Clause C.1.4.25www.swedishclub.comVers. 2/sept/2007

Exxon GA Clause InsuranceNarrativeIn the charterparties for tankers some oil companies include a clause limiting their responsibility for generalaverage. This exclusion does not match P&I cover and, for this reason, the extended liability for owners isaddressed by this additional cover.DescriptionExxon introduced in their charterparty (Exxonvoy 90, Part II, superceding clause 27(b) iii.), a General Averageclause:(iii) GENERAL AVERAGE. General Average shall be adjusted, stated, and settled according to the York Antwerp Rules 1994(“Rules”) and, as to matters not provided for by those Rules, according to the laws and usages at the port of New York;provided that, when there is an actual escape or release of oil or pollutant substances from the Vessel (irrespective ofVessel location), the cost of any measures, continued or undertaken on that account, to prevent or minimize pollution orenvironmental damage shall not be allowable in General Average; and, provided further, that any payment for pollutiondamage (as defined in Article I 6.(a) of the 1992 Protocol to the International Convention on Civil Liability for OilPollution Damage) shall also not be allowable in General Average. It is understood and agreed, however, that the costof measures to prevent pollution or environmental damage, undertaken in respect of oil or pollutant substances whichhave not escaped or been released from the Vessel, shall be included in General Average to the extent permitted by theRules. If a General Average statement is required, it shall be prepared at such port by an Adjuster from the port of NewYork appointed by the Carrier and approved by Charterer of Vessel. Such Adjuster shall attend to the settlement and thecollection of the General Average, subject to customary charges. General Average Agreements and/or security shall befurnished by Carrier and/or Charterer, and/or Owner, and/or Consignee of cargo, if requested. Any cash deposit beingmade as security to pay General Average and/or salvage shall be remitted to the Average Adjuster and shall be held by theAdjuster at the Adjuster’s risk in a special account in a duly authorized and licensed bank at the place where the GeneralAverage statement is prepared. (2006-01-25)This clause reduces the charterer’s obligation under the charterparty and excludes from GA any costs attributableto preventive measures taken to avoid or minimise pollution. Pollution damage, in itself, is not allowedunder the York-Antwerp Rules 1994, but the costs of certain specified preventive measures are allowed whenthere is an actual escape or release of oil from the vessel. This creates a gap in the P&I cover and establishesthe need for this special insurance.The Vela GA Clause is similar. There is also a wider Phillips Petroleum GA clause which may also be covered.This note is a general description of Exxon GA Clause Insurance. For more detailed information, please referto the slip or Certificate of Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded therefrom by theinclusion of a GA Clause in the charterparty which reduces the possibility for contribution by charterersor cargo owners and is not covered by P&I insurance.••War inclusion clause – W.11.••Radioactive contamination exclusion clause – C.1.4.••Limit of liability: USD 10 million.••Deductible: USD 50,000.27www.swedishclub.comVers. 2/sept/2007

North America Clean-Up CoverNarrativeIn the United States it is a regulatory requirement for owners to have a clean-up contractor. Some clean-upcontractors have an indemnity in their contracts that is not covered by P&I insurance. North America Cleanupinsurance provides additional cover for these indemnities.DescriptionThe United States requires shipowners to have an oil spill contingency plan. The contingency plan shouldinclude a contract with a clean-up contractor. Some contractors have contracts with an indemnity clause notcovered by P&I.Clean-up contractors with such indemnity clauses may be covered separately:Alaska ChaduxCoos Bay, OregonWSMC (Washington State Marine Co-operative VesselEnrolment Agreement)Marine LogisticsClean Islands Council (Hawaii)CISPRI (Cook Inlet Spill Prevention and Response) (Alaska)Guam Response ServicesPencoSEAPRO (South East Alaska Petroleum Resource Organisation)Polar Tanker Oil Spill ResponseTesoro Alaska Petroleum CompanyPort of Newport/Yaquina Bay Oil Response planTesoro Maritime Co.ARCO marineMaritime Fire and Safety Association/Clean Rivers Co-operativeAlyeska Pipeline Services CoFoss Non-tank Vessel Agreement, AlaskaFlint Hills Resources Alaska, LLC (FHR)This note is a general description of North America Clean-up cover. For more detailed information, pleaserefer to the slip or Certificate of Entry.ConditionsThe member’s entry in The Swedish Club for P&I, but including liability excluded by shipowner’s and/orcharterer’s liability arising under terms of indemnity clause(s) and/or hold harmless and/or waivers containedin the North America Clean-up Co-operative Agreements and/or Response Corporation agreements for theintended voyage.••War Inclusion Clause – W.11.••Notice of Cancellation clause, Automatic termination of cover and Five powers war exclusion clause –W.1.4.1.••Radioactive contamination exclusion clause – C.1.4.••Limit: USD 25 million.••Deductible: USD 25,000.29www.swedishclub.comVers. 2/sept/2007

Cash on BoardNarrativeThis insurance covers the Master’s cash, held on board to pay for sundries. The primary risks are theft and lossdue to fire, total loss, etc. The Master’s cash is usually excluded from Hull and P&I covers. Cash on Board coveris designed for cash stored in a safe on board the ship. In addition, cover may be extended to delivery of cashto the ship.DescriptionDepending on the size of the vessel and, more particularly, its trade, the Master may have significant cash onboard for sundry payments. This is an insurable risk as cash and monies are excluded from ordinary Hull andMachinery covers and are also excluded under P&I rules.The cover provided is for cash in the Master’s safe, on the basis that a number of security measures aretaken. These include storage of the cash in a safe kept locked at all times. Only the Master of the vesselshould have the key or code for the safe. Should cash be stolen or destroyed, the cover will indemnify theamount lost.There is also a possibility that cash could be lost during delivery to the vessel. The owners may face sucha loss during the transit of monies. There is additional insurance available, to extend coverage to monies intransit. Once again, a few security precautions must be followed. The cash should be kept in charge of aperson or, if stored, in a safe. The monies may never be left in any package that is not under direct observationby the person delivering the monies.The premium for each of these covers depends on trading pattern and where the transit of monies is made.This note is a general description of Cash on Board. For more detailed information, please refer to the slip orCertificate of Entry.p.t.o.31www.swedishclub.comVers. 2/sept/2007

Cash on BoardConditionsA) Ship’s cash, including Master’s cash, and, if required, including ship’s spares/stores or held covered.••Limit: as agreed, each vessel, each original assured.••Trading: worldwide.••Total or partial physical loss of the subject matter insured, from any cause whatsoever and howsoeverarising whilst on board.••War Risks, Strikes, Riots and Civil Commotions as per Institute War & Strikes Clauses Hulls - Times1/10/83 Cl 281, with Clause 4.1.7 and 5 deleted.••Institute Notice of Cancellation Automatic Termination of Cover and War and Nuclear Exclusions Clause- Hull etc W.1.2.C - clause 3.2 deleted.th••Not subject to the JWC Hull, War, Strikes, Terrorism and Related Perils Listed Areas (18 October 2005).••Subject to the Institute Marine Policy General Provisions (Cargo) 1/10/82 CL 269.••General Average payable in full, irrespective of the insured value.••Excluding mysterious disappearance and infidelity.••Institute Radioactive Contamination, Chemical, Biological, Bio-chemical and Electromagnetic WeaponsExclusion Clause C.1.3.••Express Warranties: warranted cash kept locked in a safe at all times. Warranted key/number to lockkept with Master only.B) Cash in transit••Limit: as agreed, anyone sending each original assured.••Trading: from time of collection by Master’s or original assured’s representatives or agents and whilstheld by them and/or whilst in transit by any means and until delivered to original assured’s vessels, asdeclared.••Institute Cargo Clauses (A) 1.1.82 CL. 252.••Institute War Clauses (Cargo) 1.1.82 CL 255.••Institute Strikes Clauses (Cargo) 1.1.82 CL 256.••War and Strikes etc. Cancellation Clause W.8.••Institute Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic WeaponsExclusion Clause C.1.3.••Express Warranties: warranted, personally accompanied at all times. Warranted, deposited in hotel safefor any overnight stay.32www.swedishclub.comVers. 2/sept/2007

Cargo on DeckNarrativeVessels may have to carry cargo on deck with “under deck, wholly or partly”, Bills of Lading. When cargo iscarried on deck in these circumstances, this is a B/L breach imposing liability excluded by P&I Rules. Cargo onDeck insurance covers such liability.DescriptionSome ships - primarily general cargo vessels, RoRos and container vessels - often carry cargo on deck. Ifthe B/L is worded appropriately, containers may be stowed on deck, as is normally the case in the containertrades, and there is no need for additional cover as this is covered under P&I Rules.In the case of general cargo ships and bulkcarriers involved in the timber trade, however, the B/L often failsto stipulate that cargo may be carried on deck. If the B/L is breached there is no cover under P&I Rules. Sincesuch carriage is commonplace in these trades, owners must cover the additional liability.Cargo on Deck cover insures risks where the owner is not allowed to carry cargo on deck (totally or partly).Cover is based on cargo value under the B/L, even if part of the cargo is carried under deck. The premium isbased on the type of cargo carried.Typical exclusions in this cover include rusting, oxidation and discolouring of unpacked steel and vehicles. Inthe case of cars, exclusions include denting, scratching and repainting costs.This note is a general description of Cargo on Deck insurance. For more detailed information, please refer tothe slip or Certificate of Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded as a result of carriageof cargo on deck.••Exclusion of rusting, oxidisation and discolouration in respect of unpacked steel goods and vehicles. Forcars and vehicles, the cover also excludes scratching, denting and cost of repainting.••War Inclusion Clause W.11.••Radioactive Contamination Exclusion Clause C.1.4.33www.swedishclub.comVers. 2/sept/2007

Ad Valorem:Specie and Valuable CargoNarrativeThe shipowner has a defence, in this context, under the Bill of Lading (eg. the Hague-Visby Rules). If the cargoin the B/L is described with a set value, however, the defence is frustrated, as is the P&I cover. This insuranceis designed to cover the additional liability.DescriptionIn most instances the B/L describes the cargo as a quantity. Accordingly, the shipowner is able to defend anyclaims and limit his liability under the pertinent rules for the B/L (the Hague-Visby Rules).Some valuable cargo, however, may be described by adding its value. This frustrates the defence under theHague-Visby Rules (or others) and the shipowner can only limit liability to the cargo value - which will bemuch in excess of ordinary limits.P&I rules also exclude cover exceeding defence under the Hague-Visby Rules. This means that the shipownerrequires additional cover. Ad Valorem covers such additional liabilities. This cover applies to specie and othervaluable cargoes.This note is a general description of Ad Valorem/Specie and Valuable Cargo. For more detailed information,please refer to the slip or Certificate of Entry.ConditionsThe cover is based on:••The member’s entry in The Swedish Club for P&I, but including liability excluded therefrom by thedeclaration of cargo value in the B/L, up to the agreed limit (the cargo value).35www.swedishclub.comVers. 2/sept/2007

FD&D NewbuildingNarrativeWhen an owner places an order for a new vessel, various disputes may arise before the newbuilding isdelivered. This cover ensures that the owner will be indemnified for legal expenses and other costs incurredin defending and/or establishing claims relating to the newbuildingDescriptionA member building a vessel that is to be entered with The Swedish Club for P&I and FD&D risks can obtainFD&D cover during the construction period. Under this insurance, the member enjoys legal support and coverfor legal costs in relation to disputes arising under the newbuilding contract. This cover is subject to speciallyagreed terms.This note is a general description of FD&D Newbuilding insurance. For more detailed information, pleaserefer to the slip or Certificate of Entry.Conditions••Subject to The Swedish Club’s Rules for FD&D Insurance, with amendments.37www.swedishclub.comVers. 2/sept/2007

Increased Value/Hull InterestNarrativeHaving covered a vessel’s market value under Hull insurance, an owner also needs to cover the additionalcosts associated with replacing a lost ship, including sundries such as office expenses, Increased Value/HullInterest cover meets these requirements.DescriptionTraditionally, under the “Marine Insurance Act”, Hull insurance covered the market value of the ship and, atthe same time, the shipowner’s “insurable interest”. Any cover in excess of market value was prohibited.Shipowners successfully demonstrated, however, that there were additional costs associated with replacement,beyond market value. It is now recognised that the assured has an additional insurable interest, inexcess of the vessel’s market value and in excess of the Hull insurance. Hull Interest cover was instituted asan excess cover, commonly known as “Increased Value” or “Hull Interest”. This was originally confined to TotalLoss Only cover, only paying the agreed amount when the vessel was a total loss according to the Hull insurancecover. A limit of a maximum insurable interest of 25% of hull insurance value was agreed.With the markets providing covers for Hull and Increased Value, with a lower premium level for the totalloss element in Increased Value, shipowners realised they could save premium costs by using Increased ValueCover to also cover, in part, the ship’s market value.In turn, this gave rise to a situation in which the vessel became under-insured on Hull. As a result, the Hullinsurer reduced compensation for liabilities, salvage and general average claims. In order to counter thisreduction in the Hull cover, Increased Value/Hull Interest also covers “Excess Liabilities” - that is, the proportionreduced by the Hull insurer due to the perceived under-insurance in the Hull cover.Therefore, the Increased Value/Hull Interest cover can be used to cover, in part, the vessel’s market value.It is common for the insured value under Hull insurance, together with the amount covered under IncreasedValue/Hull Interest, to exceed market value, so as to absorb market value fluctuations during the policy year.If the assured seeks to cover additional interests, in excess of market value and Increased Value/Hull Interestcover, he may elect to purchase Freight Interest cover.A claim will be met if Hull insurance has declared a total loss, including constructive/compromised totalloss. The limit for Increased Value/Hull Interest cover is set at 25% of the insured value under Hull insurance.Under English and American hull conditions, the assured must be granted a waiver of the disbursementwarranty, which limits any excess covers to 25% of the Hull insured value, should he elect to cover anythingin excess of the limit.This note is a general description of Increased Value/Hull Interest. For more detailed information, pleaserefer to the slip or Certificate of Entry.p.t.o39www.swedishclub.comVers. 2/Sept/2007

Increased Value Hull InterestConditionsThe cover is based on:••Insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities) TotalLoss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothenburg asper Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars (or NPL/Swedish Hull Interest Cover).••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Conditions for Hull and Machinery, where applicable.••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.40www.swedishclub.comVers. 2/Sept/2007

Freight InterestNarrativeMany shipowners cover vessel market value through Hull insurance and Increased Value/Hull Interest insurance.In order to cover additional costs in replacing a lost vessel - and to cover anticipated earnings on futurefreight - Freight Interest cover provides the necessary protection.DescriptionThis cover has an interesting and rather complex history. Traditionally - under the Marine Insurance Act - Hullinsurance covered the market value of the ship and, at the same time, the shipowner’s “insurable interest”.Any cover in excess of market value was prohibited.Shipowners successfully demonstrated, however, that there were additional costs associated with replacement,beyond market value. It is now recognised that the assured has an additional insurable interest, inexcess of the vessel’s market value and in excess of the Hull insurance. Hull Interest cover was instituted asan excess cover, commonly known as “Increased Value”. This cover was originally confined to Total Loss Onlycover, only paying the agreed amount when the vessel was a total loss according to the Hull insurance cover.A limit of a maximum insurable interest of 25% of hull insurance value was agreed.With markets providing covers for Hull and Increased Value, with a lower premium level for the total losselement in Increased Value, shipowners realised they could save premium costs by using Increased Value coverto also cover, in part, the ship’s market value.In turn, this gave rise to a situation in which shipowners had no access to additional cover for the originalextra costs in finding a replacement vessel. Furthermore, it was realised that a vessel would provide incomefor the shipowner throughout its lifespan. In contrast, a ship which is lost would deprive the shipowner of thisfuture income. In response to this problem, many markets agreed to cover Freight Interest, on top of Hull andIncreased Value covers.Freight Interest is a pure Total Loss Only cover. It has always to be in excess of vessel market value. The limit isset at 25% of insured value under the Hull insurance. Under English and American hull conditions, the assuredhas to be granted a waiver of the disbursement warranty, which limits any excess covers to 25% of the hullinsured value.This note is a general description of Freight Interest. For more detailed information, please refer to the slipor Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities)Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothenburgas per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Amended to Total Loss Only.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Conditions for Hull and Machinery where applicable.••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.41www.swedishclub.comVers. 2/Sept/2007

Freight All RiskNarrativeWhen freight is not entirely pre-paid (e.g. when the freight is payable on delivery at destination), there isexposure to an insurable interest if cargo is lost. There may also be liabilities attached to the freight at risk.This cover is designed to cover these risks.DescriptionFreight is often subject to delivery of cargo at destination. If a ship is lost during the voyage, freight will notbe paid. The same applies when part of the freight is at risk.Another exposure is liability in a general average or salvage situation. Since the freight at risk benefits fromgeneral average or salvage, it must contribute to general average or the salvage award. Even in a collisioncase, unearned freight may be exposed. Protection for such liability is also afforded by this cover.Freight All Risk cover may be placed on a voyage basis or on a continuous (“time”) cover.Freight All Risk excludes war perils, but War cover is available.This note is a general description of Freight All Risk. For more detailed information, please refer to the slipor Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Institute Time Clauses Freight 1/11/95, or Institute Voyage Clauses Freight1/11/95, to be interpreted according to Swedish Law with arbitration in Gothenburg as per ArbitrationClause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.••War cover can be arranged separately, subject to Institute War and Strikes Clauses, Freight – Time1/11/95 or Institute War and Strikes Clauses, Freight Voyage 1/11/95.43www.swedishclub.comVers. 2/Sept/2007

Stores and ProvisionsNarrativeHull insurance cover excludes consumables, including stores and provisions on board the vessel. The value ofsuch consumables may be protected by Stores and Provisions cover.DescriptionMost Hull and Machinery conditions exclude cover for stores, cash and provisions, and in some situations alsofor bunkers. The primary reason is to avoid lengthy investigations of the extent of the loss, as consumables onboard vary over time. These items can represent an interest worth covering by insurance.Stores and Provisions cover is designed to protect the value of bunkers, stores, cash and provisions (bunkersmust be owned by the assured). If the ship is on time charter, the charterer, in all probability, will be the owner ofthe bunkers. In such cases, the charterer can cover this exposure by separate bunkers insurance.Stores and Provisions Cover includes damage due to fire, heavy weather, grounding, collision, crew negligence,etc (also in circumstances other than total loss). Cover is also afforded for damage caused during loading,discharge or temporary storage outside the ship.This note is a general description of Stores and Provisions cover. For more detailed information, please referto the slip or Certificate of Entry.ConditionsThe cover is based on:••German Conditions for Hull Insurance ADS/DTV, with the inclusion of Conditions for Insurance onStores/Equipment (1980).45www.swedishclub.comVers. 2/Sept/2007

Loss of HireNarrativeThe time occupied by repairs can amount to a significant loss for the shipowner. Freight rates are lost sincethe vessel is off-hire and capital and operational costs are still due. Loss of Hire cover is designed to reducethis loss.DescriptionSome casualties may result in a significant period off-hire and loss of earnings in the freight market. Theselosses can be heavy. If the vessel is on time charter, the charterer will put the vessel off-hire. The owner muststill meet crew and capital costs. This exposure represents an insurable loss.Loss of Hire cover is based on days (or part of days) when the vessel is off-hire due to a claim recoverableunder Hull and Machinery insurance. When the period exceeds an agreed number of days - commonly 14 days- the assured has a valid claim under the cover. There is also a set upper limit per claim, specifying the numberof days the assured is paid under the insurance (normally 60, 90 or 180 days). There is also an overall limit perpolicy year.Should a vessel exceed the set number of days per year at an early stage in the life of the cover, there isnormally a possibility for the assured to re-instate the cover, by purchasing new cover for the remainingperiod of the policy year.Many mortgagees now require shipowners to have this cover, but there is also an opportunity to cover aloss or a good charter rate. The amount paid per day is agreed and this often reflects the vessel’s currentfreight rate.The insurance often includes War cover. In this way, Loss of Hire claims are covered if they result fromdamage covered by War Risks. The normal trading areas specified for War cover apply. Therefore, the assuredmust declare breaches when trading to areas excluded in the War cover “Listed Areas” and pay an additionalpremium in such situations.This note is a general description of Loss of Hire. For more detailed information, please refer to the slip orCertificate of Entry.p.t.o.47www.swedishclub.comVers. 2/Sept/2007

Loss of HireConditions••Full Norwegian conditions, in accordance with chapters 1-9 and 16 of the Norwegian Marine InsurancePlan of 1996, latest version - all to be interpreted according to Norwegian law and with jurisdiction asper §1-4 of the plan.The Articles of Association and current circulars with the following special conditions regarding limits,deductibles and deductions:••§16-4: Limit of cover per casualty and year, as agreed.••§16-7: Deductible period, as agreed.••§16-7: Additional Machinery Damage Deductible period, as agreed.Club Clauses••The Swedish Club Amended fleet clause A.1 – Fleet.••The Swedish Club Claims Lead Clause A.4.••The Swedish Club Tender Clause A.6.••The Swedish Club Condition Survey Clause A.7.2.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).48www.swedishclub.comVers. 2/Sept/2007

General Average InsuranceNarrativeIn case of a General Average on a container vessel, owners, charterers and cargo interests will be exposed toextensive delays. This cover is designed specifically to reduce delay and administrative burdens on owners andother interests in connection with a General Average.DescriptionIn a General Average situation owners tend to fall back on the absorption clause within the H&M policy. In somecases, however, costs are substantial and owners need to declare General Average. In these circumstances theprocess of arranging securities from cargo interests is both costly and time consuming.Irrespective of delays and associated costs for all interests, owners incur a commercial disadvantage if theyare seen to burden charterers and cargo interests in such circumstances.With this cover in place, owners can decide not to declare General Average in situations where GeneralAverage costs exceed the absorption clause limit. This insurance covers all General Average costs, up to thestipulated limit.This is a general description of General Average Insurance cover. For more detailed information, please referto the slip or Certificate of Entry.Conditions••Subject to The Swedish Club’s conditions for General Average Insurance••The Articles of Association and current circulars.••Institute Notice of Cancellation, Automatic Termination of Cover and War and Nuclear ExclusionsClause – Hulls etc. 1 January 1995, or Local Market equivalent (however paragraphs 3.2 to 3.2.3 shall bedeemed replaced by the Institute Radioactive Contamination, Chemical, Biological, Bio-Chemical andElectromagnetic Weapons Exclusion Clause C.1.3. (LSW 370, 2003-11-10)).••Institute Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic WeaponsExclusion Clause C.1.3 (LSW 370, 2003-11-10) and USA and Canada Endorsement (USCAN B) 29.01.04,or the Norwegian Market equivalent if and as applicable.••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).49www.swedishclub.comVers. 1/May/2007

Purchaser’s/Seller’s InterestNarrativeA vessel for sale may be closed at a price favourable for seller or purchaser. If delivery is set for a certain datein the future and the vessel is subsequently lost during that time, either party can make a financial loss.Purchaser’s/Seller’s Interest insurance is available to cover this exposure.DescriptionWhen a contract for sale is concluded and the price fixed, it is often subject to delivery a few months ahead.If the seller is convinced he has got a good price for the vessel, in excess of current insurance cover, he hasan additional financial interest to protect. The cover provided is for total loss only. The interest insured is thedifference between the current insured values under the Hull and Machinery and any Increased Value policies.The same applies to a purchaser who acquires a ship for later delivery. The secondhand market is expandingand the price given for the ship is unlikely to cover an equivalent substitute. This price differential can beprotected, for total loss of the undelivered vessel, by means of Purchaser’s Interest cover.The cover is for Total Loss Only in both cases. In addition, a War cover for the exposure may be arranged.This note is a general description of Purchaser’s/Seller’s Interest insurance. For more detailed information,please refer to the slip or Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities)Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothenburgas per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Amended to Total Loss Only.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Conditions for Hull and Machinery where applicable.••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.••War, if required.51www.swedishclub.comVers. 2/Sept/2007

Loss of Anticipated Profits(LOAP)NarrativeIn connection with the conclusion of a newbuilding contract there may be several financial interests at risk.The purchaser may wish to insure his exposure by way of taking out a LOAP insurance.DescriptionWhen a contract for a newbuilding is concluded, it is subject to delivery several months ahead. The purchasermay have a financial interest to protect and this product provides for total loss as well as delay cover. Warcover for this exposure may be arranged. By way of example, the insurable interests could comprise:••Excess cost of securing a replacement vessel••Loss of anticipated earnings••Loss of marketThis note is a general description of LOAP insurance. For more detailed information, please refer to the slip orCertificate of Entry.Conditions••Subject to the Institute Time Clauses for Builders Risk CL 351 (Clause 6. deleted), to be interpretedaccording to Swedish Law with arbitration in Gothenburg as per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Warranted not including War, terrorism or similar risks available under ordinary War Risks covers.••War, if required.53www.swedishclub.comVers. 2/Sept/2007

Commission InterestNarrativeThere are situations, such as sale and purchase or charter arrangements, where the shipowner or vessel chartererstands to receive a commission if the deal goes through. This commission may be at risk, in the sense thatpayment depends on the vessel being delivered or the charter concluded. Commission Interest cover addressessuch risks.DescriptionThe most common use of this cover is in the context of a charter. The owner or charterer chartering out the shipmay receive a commission. If the ship is lost prior to the actual date of charter commencement, the commissionis also lost. This insurable interest can be protected by Commission Interest cover.This cover is based on Total Loss Only cover, for the amount of the commission. In addition, War Risks maybe arranged.This note is a general description of Commission Interest cover. For more detailed information, please referto the slip or Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Institute Time Clauses Hulls, Increased Value (including Excess Liabilities)Total Loss Only - Time 1/10/83, to be interpreted according to Swedish Law with arbitration in Gothenburgas per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Amended to Total Loss Only.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Conditions for Hull and Machinery where applicable.••Cancellation returns only.••Warranted not including War, terrorism or similar risks being available under ordinary War Risks covers.••War Risk cover to be arranged separately if required.55www.swedishclub.comVers. 2/Sept/2007

Mortgagee’s Interest InsuranceNarrativeA mortgagee will demand an insurance security for the loan provided to a shipowner. This is achieved bymeans of a Letter of Undertaking from Hull insurer to mortgagee. Should Hull insurance not respond, themortgagee will require an additional insurance. MII is designed to cover this exposure.DescriptionIn a loan agreement between owner and mortgagee, a provision will state that the mortgagee is entitled tothe proceeds from Hull and Machinery cover and any Increased Value covers, in the event of a total loss or ifthe claim exceeds a set value. This protects the mortgagee for the loan amount outstanding at any given time.Following a Notice of Assignment, the Hull insurer and the insurers of the Increased Value will issue a Letterof Undertaking in favour of the mortgagee, based on a Loss Payable Clause agreed between the parties.Hull or Increased Value insurers will not respond to a claim in some circumstances. Typically, this might occur ifthe assured is in breach of warranties or has acted with gross negligence. Since covers are void in these circumstances,there is no payment from insurers and the mortgagee would face a loss.The mortgagee can protect himself by a Mortgagee Interest Insurance. This covers the outstanding loanamount, should the other covers become void. In some cases the mortgagee takes this cover and charges theowners. The cover may also be arranged by owners, in favour of the mortgagee.This note is a general description of Mortgagee’s Interest Insurance. For more detailed information, pleaserefer to the slip or Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Institute Mortgagees Clauses – Hulls (337) 30/5/86, to be interpreted accordingto Swedish Law, with arbitration in Gothenburg as per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Clause 1.1, line 3, amended to read “as Mortgagees on the following vessel(s) … for a period not exceeding12 months”.••Clauses 2, 3 and 11 deleted.••Clause 12.2 amended, to read “in respect of insured vessel(s)”.••It is hereby understood and agreed, in ascertaining the quantum of a claim, that the maximum amountrecoverable shall be designated or declared an amount without reference to the sound market value ofthe vessel. Any interest provisions contained elsewhere in the wording shall remain unaltered.••Clause 4.1 amended, to include The Swedish Club Hull and War conditions.••Clause 10 deleted and replaced by “Notice of Cancellation etc Clause” – W.1.3.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Cancellation returns only.57www.swedishclub.comVers. 2/Sept/2007

Innocent Owners InterestInsuranceNarrativeA shipowner with a bareboat charter is exposed if Hull and/or Increased Value covers do not respond, due tothe arrangements becoming void following an act by the disponent owner, being the assured. This insurancecovers this exposure.DescriptionIn a bareboat charterparty there is a provision stating that the actual owner is entitled to the proceeds fromHull and Machinery cover and any Increased Value covers, in case of a total loss or if the claim exceeds a setvalue. This cover protects the owner for the outstanding loan amount, at any given time.Hull or Increased Value covers, in some instances, will not respond to a claim. Typically, this is when theassured - in this instance the bareboat charterer - is in breach of warranties or acted with gross negligence.Since covers at that time are void, there is no payment from insurers and, therefore, the actual owner will notreceive any proceeds.In most instances the mortgagee(s) is protected by a Notice of Assignment, embracing both the actual ownerand the bareboat charterer. The mortgagee will be covered for any breach of contract making ordinary coversvoid, through a special Mortgagee Interest Insurance. The actual owner needs a parallel cover for his owninvestments and exposure, for the same reason: covers becoming void due to an act by the assured. InnocentOwners Interest Insurance may be claimed only if normal covers become void.This note is a general description of Innocent Owners Interest Insurance. For more detailed information,please refer to the slip or Certificate of Entry.ConditionsThe cover is based on:••Insurance is subject to the Innocent Owners Clauses - Hulls, to be interpreted according to Swedish Lawwith arbitration in Gothenburg as per Arbitration Clause Gothenburg (B.1.1).••The Articles of Association and current circulars.••Clause 1.1, line 4, amended to read “as Owner, in the following vessel(s) …(or as attached) for a periodnot exceeding 12 months”.••Clauses 2 and 11 deleted.••Clause 4.1 amended to include The Swedish Club Hull and War conditions.••Clauses 6.1.1. and 6.1.2. to include technical managers.••Clause 12 deleted and replaced by “Notice of Cancellation etc Clause” – W.1.3.••Clause 2.2 of W.1.3 is amended to read “in respect of insured vessel(s)”.••Radioactive Contamination, Chemical, Biological, Biochemical and Electromagnetic Weapons ExclusionClause C.1.3 (LSW 370, 2003-11-10).••Institute Cyber Attack Exclusion Clause C.1.3.1 (LSW 380, 2003-11-10).••Cancellation returns only.59www.swedishclub.comVers. 2/Sept/2007

Bunker InsuranceNarrativeBunker Insurance covers loss of bunkers owned by owners or charterers and on board the vessel at the time.Losses covered are due to collisions, groundings and total loss, as well as a contribution to general averageand War.DescriptionBunkers on board a vessel represent a significant value for the owner. It is worth protecting this value for risksof loss or liability. In some cases Hull and Machinery conditions exclude bunkers. The owner of the bunkersmay be the vessel owner or disponent owner, or the charterer in the case of a time-chartered vessel.During the time on board, bunkers may be lost, damaged, recovered in a salvage operation or contributeto a general average. Bunker Insurance will cover losses or contamination of bunkers due to fire, explosion,grounding, collision or sinking. In case of a general average or a salvage situation, the value of the bunkers onboard may contribute to the general average or salvage award. If so, this contribution is also covered by theinsurance.Bunker Insurance cover is based on the value of the maximum quantity of bunkers on board the vessel at anytime. In the case of a valid claim under the insurance, the loss is defined as the value of the bunkers actually lostat that time.This note is a general description of Bunker Insurance. For more detailed information, please refer to the slipor Certificate of Entry.ConditionsThe cover is based on:••Institute Bulk Oil Clauses, including War:••Institute Bulk Oil Clauses 1/2/83.••Institute War Clauses Cargo 1/1/82.••Institute Strikes Clauses Cargo 1/1/82.••Institute Notice of Cancellation, Automatic Termination of Cover and War and Nuclear Exclusions clausehulls etc. W.1.2.C – Clause 3.2. deleted.••Radioactive Contamination Exclusion Clause C.1.4.••Warranted vessels fully classed with full IACS Member Society.61www.swedishclub.comVers. 2/Sept/2007