Vessel insurance is taken out either for a single voyage, for several consecutive voyages, or for a specific duration.
In the case of voyage insurance, cover runs from the start of loading to the end of unloading, and no later than fifteen days after the ship’s arrival at its destination.
In the case of ballast voyages, cover runs from the time the ship sails until it is moored on arrival.
In the case of time insurance, the risks of the first and last day are covered by the insurance.
Days are counted from zero to 24 hours, according to the time of the country where the policy was issued.
The insurer does not cover damage or loss resulting from a defect inherent in the vessel, except in the case of a latent defect.
Unless otherwise stipulated, the insurer does not cover damage and loss caused by the captain’s intentional fault.
When the insured value of the vessel is an agreed value, the parties mutually forbid each other any other estimate, subject to the provisions of articles 491 and 511 of the present Code.
However, the courts are not bound by the insured value, if it turns out that this value does not correspond to the actual value of the vessel.
Good arrival insurance may only be taken out, on pain of nullity, with the agreement of the ship’s insurers.
When a sum is insured in this way, proof of insurable interest results from acceptance of the sum thus guaranteed.
The insurer is only liable in the event of total loss or abandonment of the vessel as a result of a risk covered by the policy, and has no right to the property abandoned, however there is an exception.
With the exception of personal injury, the insurer is liable for the reimbursement of damages of any kind for which the insured would be liable on the recourse of third parties in the event of collision by the insured vessel or collision of this vessel with a building, fixed, mobile or floating body.
The Scope of Premium
In the case of insurance per voyage or for several consecutive voyages, the entire premium is due to the insurer as soon as the risks have begun to run.
In time insurance, the premium stipulated for the entire duration of the guarantee is earned in the event of total loss or abandonment at the insurer’s expense.
If the total loss or the case of abandonment is not at the insurer’s expense, the premium is earned according to the time accrued until the total loss or the notification of abandonment.
In the event of damage, the insurer will only reimburse the cost of replacements and repairs recognized as necessary to restore the vessel to a seaworthy condition, to the exclusion of any other compensation for depreciation or unemployment or any other cause whatsoever.
Irrespective of the number of events occurring during the policy period, the insured is covered for each event up to the amount of the sum insured, without prejudice to the insurer’s right to request an additional premium after each event.
The vessel may be surrendered in the following cases:
1) Total loss;
2) Repair up to three-quarters of the agreed value;
3) Impossibility of repair;
4) Lack of news for more than three months; in this case, the loss is deemed to have occurred on the date of the last news.
Total loss of vessel occurs when the cost of repairs exceeds the value of the vessel.
The owner, who was reasonably able to have his vessel repaired, is entitled to the full amount of the repairs even if it exceeds the value of the vessel he could have claimed immediately. He would only be entitled to this value if his calculation had been unreasonable.
The shipowner who fails to replace his vessel immediately loses the profits he could have made; he is entitled to compensation for the immobilization indemnity which derives from the same principle.
When the owner of a lost vessel claims the loss of freights that contracts already concluded should have brought him, only net freights should be retained, as gross freights take into account expenses that the charterer will not have incurred.
Sale or Charter
In the event of alienation or bareboat charter of the vessel, the insurance shall continue ipso jure in favour of the new owner or charterer, on condition that he informs the insurer within (10 days) ten days and fulfils all the obligations the insured had towards the insurer under the contract.
However, the Insurer may terminate the contract within one month of receiving notification of the sale or charter.
Such termination will only take effect fifteen days after notification.
The seller or charterer remains liable for payment of premiums due prior to the alienation or charter.
The alienation of the majority of shares in a co-owned vessel alone entails the application of article 534 of the code.
The provisions relating to hull insurance also apply to insurance contracts concerning a vessel which is insured only for the duration of its stay in ports, roadsteads or other places, whether afloat or in dry dock as well as ships under construction.
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