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Table of contents

Extended Crew Cover (Section 17.B) 

Chapter 2 Risks covered and special exclusions
Section 17 Risks covered and special exclusions
 

B Extended Crew Cover

1 Special definitions

In this Section 17 B, the following words or expressions shall have the following meanings: 

Crew:
Officers, including masters and seamen, contractually obliged to serve on board a Ship owned or operated by the Assured. 

Personnel:
Agents, servants, sub-contractors and employee(s) of the Assured other than Crew, performing functions directly related to the operation of a ship, mobile offshore unit or other floating structure.

 

2 Capacity of the Assured
The cover afforded to the Assured shall extend only to liabilities, losses, costs or expenses that have arisen out of the activities and/or operations customarily carried on by or at the risk and responsibility of the Assured in any one of the capacities set out below, but only to the extent specified in the Insurance Policy:

a an owner or operator of a Ship; and/or

b an employer of the Crew and/or Personnel involved; and/or

c a party otherwise responsible for the Personnel involved:

 

3 Special conditions
None. 

4 Risks covered

a Crew and Personnel
The Insurer shall cover liabilities, losses, costs and expenses as covered by a Standard P&I Cover for Crew, Diversion expenses and Life salvage in respect of Crew and Personnel as specified in the Insurance Policy. The Insurer shall cover any one of the risks set out below, but only to the extent specified in the Insurance Policy:

Crew whilst being on

1 leave; or

2 extended leave not exceeding the number of days specified in the Insurance Policy.

provided that the Crew member served on board a Ship immediately prior to commencing the leave.

ii Crew whilst being on standby duty waiting to be ordered by the Assured to commence to serve on board a Ship.

iii Crew and/or Personnel whilst attending or travelling to or from courses, seminars, training sessions, briefings, debriefings, visits to the Assured(s) office(s), conferences or similar arrangements at the request of the Assured provided that the Crewmember’s last service at sea was on a Ship or that the Crewmember’s next service at sea is on a Ship.

iv Crew and/or Personnel whilst attending a ship not being entered with the Insurer under a Standard P&I Cover on behalf of the Assured, including the travelling to or from that ship at the request of the Assured, prior to that ship being delivered to the Assured.

Crew and/or Personnel whilst remaining on board a ship not being entered with the Insurer under a Standard P&I Cover on behalf of the Assured for a period specified in the policy at the request of the Assured after the Assured has sold or otherwise disposed of that ship, provided that the ship until she was sold or otherwise disposed of was entered with the Insurer under a Standard P&I Cover on behalf of the Assured.

vi Crew and/or Personnel whilst temporarily carrying out work on board, or travelling to or from a ship, mobile offshore unit or other floating structure not being entered with the Insurer under a Standard P&I Cover on behalf of the Assured; or on an offshore structure or installation or in or at a shore based work site; provided that such Crew and/or Personnel remain under the direction and responsibility of the Assured. 

Close relatives of Crew

The Insurer shall cover liabilities incurred by the Assured to compensate a member of Crew in respect of illness, injury or death of the Crew member’s spouse and/or children, provided that the Assured’s liability has arisen under terms of contract approved by the Insurer. 

Third party liabilities incurred by the Crew and/or Personnel

The Insurer shall cover liabilities to third parties incurred by Crew or Personnel which are indemnified by the Assured, arising solely by reason of acts or omissions committed within the scope of the employment of the Crew or Personnel, provided always that the Assured took reasonable steps to avoid the event giving rise to the liability. 

d Assured’s Reimbursement of Fines imposed on Crew*

The Insurer shall cover fine(s) imposed upon Crew (including any associated legal and other costs thereto) by any court, tribunal or other authority of competent jurisdiction arising from any act, default or omission committed by the Crew within the scope of their employment, which the Assured reimburses with the agreement of the Insurer, provided always the Assured has satisfied the Insurer that the Assured took such steps as appear to the Insurer to be reasonable to avoid the event giving rise to the fine. 

e Extra costs of crew detention*

The Insurer shall cover extra costs and expenses, over and above the costs that would have been incurred but for the incident, which are reasonably incurred by the Assured in relation to the detention of crew members where such detention has been ordered by a court or tribunal or any other legally empowered authority for the purpose of investigating a casualty or other event involving a Ship, where such extra costs and expenses are incurred with the approval of the Insurer and provided always that the Assured has satisfied the Insurer that he took such steps as appear to the Insurer to be reasonable to avoid the casualty or event giving rise to the detention. 

(* NB! Such covers are available only by special agreement)

 

5 Special Exclusions

Other professional activities of the Crew and/or Personnel whilst on leave
The Insurer shall not cover liabilities, losses, costs and expenses incurred by the Assured as a result of the Crew and/or Personnel being engaged by others than the Assured on a professional basis or the Crew’s and/or Personnel’s own professional business activities. 

b Professional divers
The Insurer shall not cover liabilities, losses, costs and expenses in respect of the injury to or the illness or death of a professional or commercial diver employed by, or operating on behalf of, an Assured or an affiliated or associated company of an Assured arising out of or during professional or commercial diving activities. 

c Environmental damages and liabilities
The insurer shall not cover liabilities, losses, costs and expenses including fines in respect of environmental damage, clean up obligations and violations of MARPOL or other applicable laws or conventions and any consequential loss or damage relating thereto unless arising out of sudden and accidental escape or discharge of oil or other substances. 

 

Introduction
The availability of experienced and competent crew has become increasingly important to shipowners, operators and crew managers, some of whom, consequently, seek to gain an advantage over their competitors by offering better terms of employment than those that are required by law in order to attract good quality personnel. However, these improved terms often impose greater responsibilities and liabilities on the employer, and since they are not terms that are generally offered by the majority of owners, it is not possible for the Association to offer cover for such terms under the Standard (i.e. mutual) P&I Cover. Consequently, the Association has developed a special Extended Crew Cover (ECR) to assist Members that wish to offer such terms to their Crew members. Whereas the cover that is available under the Standard P&I Cover is essentially restricted to events or circumstances that either occur on board a Ship, or as a direct result of something that happens on board, the ECR is wider in scope, both in relation to the period of time for which the Crew is covered, and also in relation to the additional personnel that are covered. 

The ECR is available to all the Association’s Members provided that they are entered in the Association for Crew cover under the underlying P&I Rules.

 

Guidance

(A) ‘Crew’ and ‘Personnel’ (Section 17.B.1) and ‘Close relatives of Crew’ (Section 17.B.4.b)
Cover is available under the ECR for Crew members, which term includes all masters, officers and seamen that are contractually obliged to serve on Ships that are owned or operated by the Assured. Cover is also available for other Personnel, which term includes agents, servants, sub-contractors and all other employees of the Assured that perform functions that are directly related to the operation of a Ship. Finally, cover is available for close relatives of the Crew, which term includes a Crew member’s spouse, civil partner and biological or legally adopted children. 

Cover is available under the ECR for the liabilities that an employer may incur in relation to Crew members and other Personnel, for liabilities incurred by an employer to third parties and for the injury or death of a Crew member’s family. The cover responds to a wide range of liabilities that extends beyond the Standard P&I Cover and thus enables an employer to offer improved employment terms to those Crew members that he particularly wishes to attract or retain. 

(B) ‘Capacity of the Assured’ (Section 17.B.2)
Cover is available only for liabilities, losses, costs or expenses that have arisen as a result of those activities and/or operations that are customarily carried on by, or at the risk and responsibility of, the Assured in any one of the following capacities:

a as owner or operator of a Ship; and/or

as an employer of the Crew and/or Personnel; and/or

c as a party that is otherwise responsible for the Personnel.

The capacity or capacities in which the Assured is covered must be specified in the Insurance Policy. 

(C) ‘Risks covered’ (Section 17.B.3)
The cover that is available under the ECR is intended to expand the scope of the cover that is available under the Standard P&I Cover for Crew,1 Diversion expenses2 and Life Salvage3 to Personnel as well as Crew and to fill some of the gaps in such cover. Cover is available in all the various circumstances that are itemised in sub-paragraphs i-vi of section 17.B.4; however, it is not obligatory to take all of them and the majority of Assured do not do so and merely choose those additional risks that they require and exclude the ones that are not relevant for them. The extent and scope of cover is then specified in the Insurance Policy and will determine the amount of premium that is payable. 

1 Crew that are on leave or on standby leave (Section 17.B.4.a.i-ii)
Cover is available under the Standard P&I Cover for the contractual liability that the Member has to permanently employed Crew members whilst they are on leave or on standby leave ashore in between postings,4 but is not available in such situations if the Crew member is not permanently employed by the Member. However, cover is available for temporary Crew members under the ECR provided that the Crew member served on the Assured’s Ship immediately prior to commencing the leave and that the Assured’s contractual commitment to him extends to the post-service leave period. 

The cover that is available under the ECR includes whatever contractual liability the Assured has to pay medical expenses, sick wages, disability and compensation for illness, injury or death that is incurred whilst the Crew member is on leave. However, cover is not available pursuant to Section 36.4 of the Additional Covers Terms and Conditions to the extent that the particular liability, loss, cost or expense is also covered by social insurance or by public or private insurance that is required by the legislation or collective wages agreement that governs the contract of employment, or which would have been so covered if such insurance had been effected. Sick wages are covered from the time that the Crew member is scheduled to return to work. However, an Assured will typically exclude cover for illness injury and death that has been incurred as a result of unlawful activities or extreme sports such as hang-gliding or white-water rafting. 

2 Crew and/or Personnel that are attending shore-based courses, meetings etc. (Section 17.B.4.a.i-iii)
Cover is also normally available under the Standard P&I Cover for the contractual liability that the Member has to permanently employed Crew members whilst they are attending courses, seminars, training sessions or similar arrangements at the request of the Assured during the course of their employment but is not available if the Crew member is not permanently employed by the Member. Furthermore, cover is available for liabilities that the Member has to other Personnel only whilst such Personnel are carried on board.5 However, cover is available under the ECR for whatever contractual liability that the Assured may have to temporary Crew members whilst they are engaged in such activities during the leave or standby period, or to other Personnel whilst ashore, but provided, in the case of Crew members, that the Crew Member’s last service at sea was on a Ship that is identified in the Insurance Policy,6 or that his next service at sea will be on such a Ship. 

3 Crew and/or Personnel attending on board a ship that has yet to be delivered to the Assured (Section 17.B.4.a.iv)

Non-crew personnel
A Member that is in the process of taking delivery of a ship that is either being bought or built will often instruct a Crew member or other Personnel to attend on board the ship to supervise the purchase or building arrangements on his behalf. However, since such a ship may not yet have been entered by the Member with the Association, there may be circumstances in which the Member will not have cover under the Standard P&I Cover for all liabilities, losses, costs and expenses that he may incur in such circumstances. However, cover is made available under the ECR for liabilities, losses etc., that are incurred by the Assured in such circumstances including liabilities, losses etc., that may be incurred whilst the Crew member or Personnel is travelling to or from the ship at the Assured’s request to the extent that cover is not available under the Standard P&I Cover. 

4 Close relatives of Crew (Section 17.B.4.b)
Cover is available under the ECR for any liability that the Assured may have to compensate a Crew member for the illness, injury or death of the Crew member’s spouse, civil partner and/or biological or legally adopted children provided that the insurer has approved the various benefits that are provided by the Asssured. However, cover is not available pursuant to Section 36.4 of the Additional Covers Terms and Conditions to the extent that the particular liability, loss, cost or expense is also covered by social insurance or by public or private insurance that is required by the legislation or collective wages agreement that governs the contract of employment, or which would have been so covered if such insurance had been effected. 

The Insurer and Assured will normally agree that the cover for the close relatives of the Crew will be subject to certain restrictions such as the following:

  • cover is restricted to spouses or civil partners under the age of 60 and to children under the age of 21 and the names and dates of birth of the spouse, civil partner and children are be advised by the crew member to the Assured and recorded in a Beneficiary Form when the crew member commences employment with the Assured;
  • the Crew member must inform the Assured and/or the manning agent within a specified period (usually three working days) of any event that may give rise to a claim and/or must submit a claim for reimbursement within a specified time limit;
  • cover is not available for illness, injury and death that is self-inflicted or the result of unlawful and/or hazardous activities and extreme sports activities, cosmetic treatment and alternative treatment (e.g. homeopathic medicine), dentistry, optometry and eye correction, pre-existing conditions and congenital disorders. However, cover is available for emergency C-sections that may be necessary in order to save the life of mother and child and cover may be available for cosmetic treatment in the case of burn injuries if this is recommended by the doctor that is treating the injury;
  • Since the Member usually has agreements with various local clinics in the country where the close relative is domiciled, cover is not normally available for medical treatment outside that country. However, subject to the Insurer’s approval, cover may be available abroad if such treatment is not available locally
  • Cover ceases when the Crew member’s period of employment by the Assured ceases although it is often agreed that cover will remain in force for one month thereafter. 

Normally, cover is subject to a deductible in a sum that is to be agreed but it is for the Assured to decide whether the deductible is to be borne by the Assured itself or, as is the case under the Standard P&I Cover, by the Crew member.

 

5 Third party liabilities incurred by the Crew and/or Personnel (Section 17.B.4.c)
If a third party is injured by the negligence of a Crew member whilst working on board a Ship cover is normally available for any liability that the Member may have to such third party pursuant to Rules 27-30 of the Standard P&I Cover. However, cover is not always available under the Standard P&I Cover in such circumstances. For example, if a chief engineer that is working on board a new ship that is being built were to negligently allow a piece of heavy machinery to fall into the engine room and thereby seriously injure a shipyard worker, the worker might prefer (or might be obliged) to claim compensation from his employer (the yard) which would then pursue a claim against the ship owner. Consequently, the shipowner would be obliged to indemnify the yard pursuant to the terms of the contract which the ship owner had concluded with the yard prior to commencing the building work, which indemnities are often based on strict liability. Cover is available to the shipowner as Assured under the ECR in such circumstances. 

Alternatively, if a crew manager that is not listed as an additional assured under the owner’s Standard P&I Cover were to supply a Crew to a shipowner Member pursuant to a knock for knock arrangement, cover is not available under the Standard P&I Cover for any liability that the crew manager may have to third parties for the acts or omissions of the Crew but cover is available under the ECR should the crew manager choose to effect such an insurance in its own name as Assured pursuant to right that it has to do so under Section 17.B.2. 

6 Assured’s Reimbursement of Fines imposed on Crew (Section 17.B.4.d)
Members have sought insurance protection against such risks in recent years as a result of the increasing tendency to bring criminal proceedings against seafarers and the increasing concern that this has caused to seafarers.7 Fines are imposed on members of the Crew, often the master rather than the Member itself, in an increasing number of states and for an increasing number of alleged offences. Consequently, seafarers have sought contractual protection against such exposure from their employers and some Members have considered it necessary to agree to indemnify and hold harmless their Crew members against certain categories of fines provided that the Crew member has acted within the scope of his or her employment. 

Cover is available under Rule 47 of the Standard P&I Cover for fines that are imposed on Crew members in specified situations provided that the Member is contractually obliged to indemnify the Crew members in such circumstances or that the Association agrees to such indemnification. Such cover is in reality a ‘misdirected arrow’ type of cover which is applicable regardless of whether the fine is justified or the size of the fine. However, there may be circumstances in which fines are imposed on Crew members in situations other than those that are itemised in Rule 47, or the Member may decide that it should indemnify the Crew member even if it is not contractually obliged to do so. The ECR cover was designed to provide the Assured with cover in such circumstances and cover is available for fines (including any associated legal or other costs) that are imposed on Crew members by any court, tribunal or other authority of competent jurisdiction. 

Such cover is subject to special agreement and special terms that are negotiated between the Insurer and the Assured and details of the specific fines that are to be covered are specified in the Insurance Policy. However, notwithstanding any other additional special terms, cover is available only if:

  • the fines are imposed in relation to acts, omissions or defaults of the Crew that were committed whilst acting within the scope of their employment; and
  • the Insurer is satisfied that the Assured took such steps that appear to the Insurer to be reasonable to avoid the event that gave rise to the fine; and
  • the insurer has agreed to the reimbursement of the Crew member. 

Therefore, the availability or otherwise of cover will be considered on a case by case basis and, for example, cover will not be made available for fines that are imposed on a Crew member for the commission of a crime in circumstances where there is evidence that the relevant Crew member was involved in the crime. Furthermore, cover may be withheld if the provision of cover is considered to seriously undermine the deterrent purpose of the fine. 

7 Extra costs of crew detention (Section 17.B.4.e)
In certain cases, Crew members may be prevented for many reasons from leaving a country in which an alleged offence, e.g. smuggling, has been committed or a casualty, e.g. a grounding or a pollution, has occurred. This may be because they themselves are under investigation, or because they are considered to be material witnesses and the detention period can be months or even years. Fortunately, Crew members are not often imprisoned, but are normally allowed to stay in a hotel or apartment. Nevertheless, the accommodation costs and living expenses that are incurred by the Crew members during this time can be significant and, depending on the circumstances, will either have to be borne in the first instance by the Crew members themselves, or they will be paid or reimbursed to the Crew members by the Member. However, cover is not available under the Standard P&I Cover in such circumstances since such cover is restricted to fines and penalties that are incurred by the Member and does not extend to other costs and expenses that are incurred by the Crew as a result of their detention albeit that such detention is related to the fine or penalty. 

Cover may be available under the ECR for such costs and expenses even if the Crew member is acquitted of the commission of any crime or wrong-doing. However, cover is not available for any salary that is paid to the Crew member during the period of the detention. 

The cover is subject to special agreement and special terms that are negotiated between the Insurer and the Assured and details of the specific risks that are to be covered are specified in the Insurance Policy. Furthermore, notwithstanding any other additional special terms, cover is available only to the extent that such costs and expenses exceed that which would have been incurred but for the incident, and only if:

  • the extra costs have been reasonably incurred by the Assured in relation to the detention of the Crew member; and
  • the Insurer is satisfied that the Assured took such steps that appear to the Insurer to be reasonable to avoid the event that gave rise to the Crew detention; and
  • the costs and expenses have been incurred with the approval of the insurer. 

Furthermore, cover is available under the ECR only to the extent that cover is not otherwise available under the Standard P&I Cover 

8 Special Exclusions (Section 17.B.5)

a Other professional activities of the Crew and/or Personnel whilst on leave (Section 17.B.5.a)
Cover is not available under the ECR for any liabilities, losses, costs and expenses that are incurred by the Assured as a result of the Crew and/or Personnel being engaged by others than the Assured on a professional basis or the Crew’s and/or Personnel’s own professional business activities since these are not activities and/or operations that are customarily carried on by, or at the risk of, the Assured in any of the capacities that are specified in Section 17.B.2. 

b Professional divers (Section 17.B.5.b)
Cover is not available under the ECR for liabilities, losses, costs and expenses in respect of the injury to or the illness or death of a professional or commercial diver employed by, or operating on behalf of, an Assured or an affiliated or associated company of an Assured arising out of or during professional or commercial diving activities. Cover is excluded for such risks since they relate to specialist operations that are not directly connected to mainstream shipping operations and have a different/increased risk profile. However, separate cover is available for such risks under the Association’s Diver’s cover details of which can be found on the Gard website under Offshore Products. 

Environmental damage and liabilities (Section 17.B.5.c)
This section is consistent with, and mirrors the principles that underpin, Rules 38 and 47.1.c and emphasises that although the ECR is intended to provide wider cover than the Rules, it does not provide cover for liabilities, losses, costs and expenses including fines in respect of environmental damage, clean up obligations and violations of MARPOL or other applicable laws or conventions and any consequential loss or damage relating thereto unless they arise out of the sudden and accidental escape or discharge of oil or other substances. 

Limit of Cover
The limit of cover is USD 10 million per event. Higher limits can be negotiated by special agreement.


 

1 See the Guidance to Rule 27.
2 See the Guidance to Rule 31.
3 See the Guidance to Rule 33.
4 See the Guidance to Rule 27.
5 See (A) to the Guidance to Rule 29.
6 See the definition of Ship in Section 1 of Chapter 1 of PART I GENERAL PROVISIONS of the Additional Cover Terms and Conditions.
7 For further commentary see Chapter 8.3.3 of the Gard Guidance on Maritime Claims and Insurance.