Table of contents
Whereas shipowners would traditionally appoint their crew members directly, they are far more likely today to engage specialist crew managers to recruit and employ crews for them. Such crew managers enter into contractual relationships with the crew members that they employ and, consequently, run the risk that they may incur liabilities to such crew members. However, since such crew managers do not own or charter the ships on which the crew members are to serve and may not be co-insured under the shipowners’ P&I insurance, they may not be able to benefit from the protection that such insurance provides. For these and other reasons, crew managers may wish to take out separate insurance to protect them against any liabilities, losses, costs and expenses that they may incur in connection with the recruitment of crews. The Crew Managers Cover that is available from the Association is intended to provide such protection against traditional crew liabilities, losses, costs and expenses that normally arise under a crew employment contract and/or collective bargaining agreements.
The cover that is provided is in effect an incorporation of a number of the Association’s mutual P&I Rules and claims that arise under this cover are handled by the same claims handlers that handle similar claims under the Standard P&I Cover.
The cover is made available by the Association as Insurer to a named Assured or named Assureds1 on a fixed premium basis in respect of a named Ship or Ships for a specified period and is subject to any agreed deductibles, specially agreed terms and the exclusions and other general terms and conditions that are specified in the Rules of the Association’s standard P&I and Defence cover insofar as applicable to fixed premium entries. However, it is emphasised that the acceptance of the Assured by the Insurer for the purposes of this Crew Managers Cover does not give the Assured a right to be a Member of the Association.
1 Risks covered
The Assured shall be covered for liabilities, losses, costs and expenses as specified below, however, only in his capacity as Crew Manager for the Ship and to the extent such liabilities, losses, costs and expenses have arisen out of operations and/or activities customarily carried on by or at the risk and responsibility of a Shipowner:
a Crew liabilities: Liabilities, costs and expenses arising under contract or otherwise relating to crew as set out in Rules 27, 29, 31, 33, 46, 47 and 48;
b War Risks: Notwithstanding Rule 58.1 of the Rules, liabilities, losses, costs and expenses as set out in this Section 1 caused by War Risks, except where directly or indirectly caused by or contributed to by or arising from any chemical, biological, bio-chemical or electromagnetic weapon; and
c Legal costs and enquiry expenses: Costs and expenses as set out in Rules 44 and 45 relating to such crew liabilities.
…(a) Crew liabilities: liabilities, costs and expenses arising under contract or otherwise relating to crew as set out in Rules, 27, 29, 31, 33, 46, 47 and 48…
The backbone of the Crew Managers Cover is Rule 27 but other important risks that affect Crew members are regulated by the other Rules that are specified in Section 1 (a) of the cover. However, whilst some of these Rules relate to personnel other than Crew members, the Crew Managers Cover is restricted in scope to the cover that is provided by such Rules to Crew members. Bearing this important restriction in mind, the guidance that is given in relation to such Rules is equally applicable to the cover that is provided by the Crew Managers Cover and should be consulted when considering the breadth of cover that is available under such additional cover. The aim of the Crew Managers Cover is to provide the crew manager as Assured with the same breadth of cover in relation to the Crew of the named Ship(s) that is available to a Member under the specified Rules of the Standard P&I Cover.
…(b) War Risks: Notwithstanding Rule 58.1 of the Rules, liabilities, losses, costs and expenses as set out in this Section 1 caused by War Risks, except where directly or indirectly caused by or contributed to by or arising from any chemical, biological, bio-chemical or electromagnetic weapon…
Liabilities, losses, costs and expenses that are caused by war risks are excluded from the Standard P&I Cover for the reasons that are explained in (A) to the Guidance to Rule 58.2 Consequently, those P&I risks that would have been covered by the Association but for the exclusion in Rule 58.1 are often covered under standard war risks conditions subject to a separate limit. However, if the crew manager is not a co-assured under such a policy, he can obtain the necessary cover for such risks under the Crew Managers Cover apart from liabilities etc., that are directly or indirectly caused by, or contributed to, by any chemical, biological, bio-chemical or electromagnetic weapon.
Alternatively, if the crew manager is a co-insured under such a war risks policy, he will have the protection that is afforded by such insurance, in which case, cover is available under the Crew Managers Cover only for liability that exceeds the limit that is applicable under the war risks policy, or for liability that arises as a result of the fact that the Crew Managers Cover affords cover in circumstances in which cover is not available under the war risks policy.
…(c) Legal costs and enquiry expenses: Costs and expenses as set out in Rules 44 and 45 relating to such crew liabilities…
Crew managers are just as likely as Members of the Association to incur costs and expenses in relation to litigation and enquires relating to Crew and, therefore, require the same insurance protection. Detailed commentary on the scope of the cover that is available under Rules 44 and 45 of the Standard P&I Cover can be found in the Guidances to such Rules. Such comments are equally applicable to the scope of cover that is available to crew mangers under the Crew Managers Cover and should be consulted in relation thereto. However, it should be emphasised that cover is available only if such legal costs and enquiry expenses have been incurred with the agreement of the Insurer.
2 Limit of insurance
It has been agreed that the cover afforded all assured(s)...is limited for any and all claims to...per event.
The cover is subject to whatever limit that has been agreed between the Assured(s) and the Association as insurer. The cover limit is to apply per event that occurs during the duration of cover and for all claim(s) that are made against one or more of the Assured(s) as a result of each event.
1 All persons and/or companies that are named as Assured are jointly and severally liable for all sums that are due to the Association in respect of this insurance.
2 See also the commentary in Chapter 18.104.22.168 of the Gard Guidance on Maritime Claims and Insurance.