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The Association shall cover liability resulting from the injury to, or illness or death of persons other than the Crew, passengers and other persons carried on board, provided that where the liability arises under the terms of a contract or indemnity and would not have arisen but for those terms, the liability shall only be covered when and to the extent that those terms have been approved by the Association.
Under this Rule cover is available in respect of the Member’s liability for injury, illness or death to persons other than Crew members, passengers and other persons carried on board. Cover is not available under this Rule for liability for loss of, or damage to, the effects of persons that are not carried on board, but cover for such liability is available under Rule 39.
(A) Liability for persons not carried on board (Rule 30)
Rule 30 normally applies to two main categories of persons that are not carried on board:
a Persons who perform work or other functions on board or visit the Ship whilst the Ship is not in transit between ports, e.g. stevedores, shipyard workers, port agents, surveyors, port state control officers, ship chandlers and other visitors; and
b Persons who have no association with the Ship, but are, nonetheless, affected by an incident arising in direct connection with the operation of the Ship, e.g. persons who are at or near a berth or terminal or the crew of another ship or members of the general public ashore.
(B) …liability resulting from…injury, illness or death… (Rule 30)
Such liability normally arises under statutory or common law (tort) provisions. Liability can also arise by virtue of contract, but is less commonplace, and is, in any event, often affected by statutory provisions.1 Therefore, there is, normally, little opportunity for the Member to control the jurisdiction in which the claim is brought, which could be where the incident occurred, or where the claimant resides, or where the owner is domiciled.
If liability arises pursuant to contractual terms but would not have arisen if there had not been any such terms, cover is available, only to the extent that the contract terms have previously been approved by the Association.2 In some cases, the person suffering injury, illness or death will be the employee of the Member’s contract partner, and the contract may contain ’hold harmless’ and/or indemnity provisions. Mutual indemnity (i.e. ’knock-for-knock’) provisions whereby each contractual party agrees to hold the other harmless for injury etc., to its own employees, and to indemnify the other party for losses resulting from the acts of its own employees, are generally acceptable,3 but Members are, nonetheless, advised to consult the Association prior to accepting such provisions.
Cover is available for the Member’s liability for any type of injury or illness so long as the court or tribunal seized of the case has ruled that a medical condition has given rise to a right to compensation or damages, and is the result of an incident for which the member is legally liable. Cover is available not only in respect of physical conditions but also in respect of psychological conditions such as emotional distress, impairing anxiety or post-traumatic stress disorder.
Whilst cover is available for the Member’s liability for illness as well as for injury or death, cover is called upon in most cases in relation to liability for injury or death. However, liability for illness could arise in relation to the working environment on board, e.g. an asbestos-related disease contracted by shipyard workers that can be traced to the entered Ship. Citizens ashore can also suffer illness or death as a result of toxic fumes escaping from a chemical tanker or from a container ship carrying hazardous cargo on deck.
The cover that is available under Rule 30 is subject to the overriding provisions of Rule 2.4 which make it clear that cover is available only for liabilities that the Member incurs in direct connection with the operation of the Ship and in respect of the Member’s interest in the Ship. Therefore, if the Member is the owner or operator of a terminal, berth, port installation and/or equipment, and injury, illness or death is caused by the Member to persons who are not carried on board by an accident for which the Member is liable in his capacity as owner or operator of such other facility rather than in his capacity as shipowner, cover is not available for such liability.
1 For example, the work of longshoremen in US ports is based on a contractual relationship between the ship operator or charterer and the stevedoring company (the longshoremen’s employer), but there is no direct contractual relationship between the longshoremen and the ship. The remedy of longshoremen against the ship (and shipowner) has a statutory foundation in the Longshore and Harbor Workers’ Compensation Act (1972).
2 See Rule 55.
3 This reflects the provisions of the Pooling Agreement.