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Rule 48 Disinfection and quarantine expenses

The Association shall cover costs and expenses, other than the Ship’s running costs and expenses, incurred by the Member in connection with quarantine orders or disinfection of the Ship or Crew on account of infectious diseases on board, except where the Ship has been ordered to a port where the Member knew or should have anticipated that she would be quarantined.

 

Guidance

Ships have always been subject to delays and extra expenditure that has been caused by the quarantine of the ship as a result of the presence on board of infectious diseases. In most instances, the shipowner is not able to avoid such difficulties, but in other instances, they can be attributed to a lack of care on the part of the shipowner or operator in allowing the ship to trade to ports or areas where the ship is likely to be quarantined. The cover that is available under Rule 48 is limited to those costs and expenses that are difficult to avoid and which are, therefore, considered to be a natural risk that should be shared by the membership of a mutual club. However, cover is not available for those costs and expenses that a prudent Member could, and should, have avoided. 

(A) …costs and expenses…incurred by the Member in connection with quarantine orders… (Rule 48)
Cover is available for costs and expenses that are incurred by the Member in connection with ‘quarantine orders’. A ‘quarantine order’ is an order that is given by local or national authorities in the country where the Ship finds itself at the time, which imposes restrictions on either the movement of the Ship and/or the Crew, passengers or other persons that are carried on board the Ship, or on the handling or discharging of cargo or other property that is on board the Ship. 

The purpose and aim of a quarantine order is to ensure that proper measures are taken to investigate, eliminate or minimise the spread ashore of an infectious disease1 that is present on board the Ship. The infectious disease may either affect humans and be carried by the Crew, passengers or other persons that are on board the Ship; or it may affect flora or other natural resources and be present within the cargo or within foodstuffs or other provisions that are on board the Ship; or it may even be present within a part of the Ship itself. 

A quarantine order is likely to be issued not only when the presence on board of an infectious disease has been established before the Ship calls at the port, but also when the authorities have a suspicion that an infectious disease is present on board. In exceptional circumstances, national health authorities may issue quarantine orders that prevent all ships berthing at their ports before they are properly inspected in order to ensure that they do not carry a disease, e.g. in the event of a pandemic disease. 

Since the discovery of the fungal disease Karnal Bunt2 in the United States in the mid-1990s, agricultural authorities in several countries have been vigilant in taking measures to ensure that such diseases do not spread to crops in those countries. Therefore, ships carrying fertiliser cargoes to such countries may be subject to thorough sampling and inspection and will be quarantined if such a disease is found on board. Furthermore, the discovery that such a disease is present on board is likely to cause the import permit to be revoked with the result that the Ship will not be allowed to discharge the cargo in that country and must dispose of it elsewhere. 

Cover is available for costs and expenses that are incurred by the Member ‘in connection with’ quarantine orders. Therefore, subject to the issues discussed in (D) below, cover is available for costs and expenses that are incurred by the Member in bringing the Ship to anchor in the quarantine area; in carrying out the required inspections or expert analysis; in taking measures to eliminate the hazard in question by fumigation or other forms of treatment of the cargo on board; as well as for costs and expenses that may be incurred by the Member to unload and reload cargo if this is required in order to comply with the quarantine order. 

A distinction must be drawn between costs and expenses that are incurred in connection with quarantine orders etc., and those that are incurred in order ensure that the Ship is in a seaworthy condition to load the next cargo because of the presence of pests or insects in the Ship’s holds. The Member has a duty to ensure that the Ship is seaworthy before and at the commencement of each voyage and this includes the duty to make the holds fit to receive the cargo that is to be carried by the Ship under the next contract of carriage. The costs of cleaning and treating the holds for such purposes are considered to be ordinary operational costs of the Ship, for which cover is not available from the Association.3 

(B) …costs and expenses incurred by the Member in connection with…disinfection of the Ship or Crew… (Rule 48)
Cover is also available under Rule 48 for costs and expenses that are incurred by the Member in connection with the disinfection of the Ship or Crew because of the presence on board of infectious diseases. 

(C) …on account of infectious diseases on board… (Rule 48)
An ‘infectious disease’ is a disease that will spread and cause infection to other human beings and/or animals4 and/or flora and/or other natural resources unless disinfection or other similar preventative measures are taken. Typical examples include cholera, plague, smallpox, typhus and more recent pandemic diseases such as avian influenza or ebola. 

Depending on the type and nature of the disease it may be necessary to disinfect the Crew members and/or the cargo and/or any food or other provisions that are on board, or even the whole Ship, and cover is available in all these circumstances. Most of the costs and expenses that are incurred in this regard are incurred as a result of inspections and investigations that are required in order to trace and analyse the disease and its source, and also as a result of the disinfection process itself, which is usually carried out by specialised companies. Such costs and expenses can be substantial depending on the nature of the disease and the type, size and design of the Ship. For example, the disinfection of all parts of a modern, large cruise ship is likely to be a difficult and time-consuming exercise that could lead to the curtailment of the current cruise and the cancellation of scheduled future voyages. However, it should be noted in this regard that cover is not available for loss of time, loss of market or similar losses that result from delay.5 

(D) …other than the Ship’s running costs and expenses… (Rule 48)
It is a general principle of insurance that cover is available only for liabilities, losses, costs and expenses that have been incurred as a result of an insured peril or fortuitous event. The Ship’s running costs and expenses are costs and expenses that are incurred in connection with the ordinary operation of the Ship regardless of the quarantine order or the presence on board of an infectious disease, e.g. the costs of wages, stores, fuel, provisions and port charges. Consequently, cover is not available under Rule 48 for such costs and expenses. However, where such costs are incurred as a result of the issuance of quarantine orders or the disinfection of the Ship, but such costs are higher than those that would normally have been incurred but for the presence of the disease, cover is available for any additional costs and expenses that have been so incurred.6 

(E) …except where the Ship has been ordered to a port where the Member knew or should have anticipated that she would be quarantined… (Rule 48)
The Member is expected to know the conditions and regulations that will affect his Ship in the ports and other locations to which his Ship will be trading. For example, he is expected to be familiar with the food and health regulations of the country(ies) to which the cargo is to be carried. 

If the Member knows in advance that the condition of the Ship, or of the Crew, is such that the relevant authorities at a port of call are likely to order the Ship to be quarantined, cover is not available under Rule 48 since the Member would not be acting prudently if he failed to take reasonable steps in such circumstances to avoid the risk.7 In this regard, it does not matter that the Ship is on charter and that the Member is acting in compliance with employment orders that are given by the charterer to proceed to such port. 

Similarly, cover is not available even if the Member does not know for certain that his Ship will be quarantined, but should have anticipated that a quarantine order could be imposed. A Member cannot turn a ‘blind eye’ to the risk. He must act prudently and ascertain in advance whether a quarantine order is likely to be issued. The test that is normally applied by the Association in such cases is: what would a reasonable and prudent operator be expected to do in similar circumstances? 

Whilst this proviso to Rule 48 applies expressly only when there is a risk that the Ship may be quarantined, and does not refer expressly to the fact that the Ship and/or Crew may need to be disinfected, the Association may, nevertheless, have a right to refuse cover in such circumstances under Rule 74, since cover is not available under Rule 74 for liabilities, losses, costs and expenses arising out of, or consequent upon, the Ship being employed in or on an unduly hazardous trade or voyage.8


1 See further discussion of the term ‘infectious disease’ in (C) below.
2 Karnal Bunt, or partial bunt, is a fungal disease that affects wheat, durum wheat, rye, and triticale (a hybrid of wheat and rye). Over 20 countries currently list Karnal Bunt (KB) as a quarantine pest.
3 See also the Guidance to Rule 46.a.iii.
4 This may be relevant in the case of a Ship carrying livestock as cargo.
5 See the Guidance to Rule 63.2.
6 Where the event has caused the Member to save costs or expenses that would have been incurred had the event not occurred, the Association may deduct from the compensation payable any such amounts that have been saved by the Member. See the Guidance to Rule 54.
7 Cover may also be unavailable pursuant to the provisions of Rule 74.
8 See the Guidance to Rule 74.