Trading Limits - Principle
The principle of the Norwegian trading limits is that the person effecting the insurance is under an obligation to notify the insurer whenever the vessel proceeds beyond ordinary trading limits. With proper notice and when meeting certain conditions, including payment of an additional premium, the risk can be covered.
The Norwegian Marine Insurance Plan 1996, version 1999, §3-15 Trading limits, divides trading into three geographical areas [view the Plan's wording]
Generally, these are the rules:
ORDINARY WATERS
Ordinary trading area is all waters
except those defined as conditional or excluded. No additional
premium or notice is required.
CONDITIONAL WATERS
Conditional waters are areas the
vessel may navigate subject to an additional premium or amended
conditions. Notice is required but if notice is not given coverage
may still be provided in certain cases. Wording as per the Plan’s
§ 3-15 and the Commentary. This may be schematically illustrated as
below without obligation for misinterpretation.
| Prior Notice to insurer | No Prior Notice but later information to insurer | No Prior Notice until claim |
| With prior notice insurer may charge additional premium and/or impose special conditions. | Additional premium and/or special conditions will be stipulated once insurer is informed of vessel’s entry into area, and must be accepted by the assured. | Assured has consented to conditional limit being exceeded, but no prior notice has been given to insurer. If claim is filed, an additional deduction of ¼ or maximum of 150,000 USD for each casualty is applied to damage (excluding total loss).* (This deduction will apply in addition to ordinary additional premium and/or special conditions as stipulated by the insurer). |
| If assured does not want to accept additional premium and/or special conditions, suspension of cover may be agreed whilst the vessel is in the area. | If assured does not agree to above conditions, there is no coverage whilst the vessel is in the area. |
Excluded waters are areas where there is no cover unless there is an express prior dispensation - with only a few exceptions.
All trips to area are excluded from coverage unless situations
occur as described below.
| Advance Permission required. | No permission – no cover with exception |
| Parties must agree in advance to additional premiums and/or conditions. | Coverage is granted only if master unintentionally enters the vessel into the excluded area, or if entry is made to save human life or to salvage ship or goods. |
| With no agreement prior to entry, cover is suspended whilst the vessel is in the excluded area |
RESUMED COVERAGE
Insurance coverage will resume/reattach when the vessel returns to the ordinary or conditional area.
CAUSATION
If a casualty occurs after cover has resumed/re-attached following a trip to an excluded area, the general rules on causation and apportionment apply.