Limitations etc. on P&I cover - Rule 61: Submarines, diving bells remotely operated underwater vehicles and divers

1. The Association shall not cover under a P&I entry liabilities, losses, costs or expenses arising out of

   1. the operation by the Member of submarines, mini-submarines, diving bells or remotely operated underwater vehicles; or

   2. the activities of professional or commercial divers where the Member is responsible for such activities other than

      1. activities arising out of salvage operations being conducted by the Ship where the divers form part of the crew of the Ship (or of diving bells or other similar equipment or craft operating from the Ship) and where the Member is responsible for the activities of such divers; and

      2. incidental diving operations carried out in relation to the inspection, repair or maintenance of the Ship or in relation to damage caused by the Ship; and

      3. recreational diving activities.

Guidance

(A) The Association shall not cover…liabilities, losses, costs or expenses arising out of… (Rule 61) The risks that the members of a marine mutual association agree to share inter se are risks that relate to the surface transportation of passengers and cargo. Risks that arise solely as a result of submarine activities are of a different nature and cannot be easily accommodated within the cost sharing structure of a marine mutual association. Therefore, Rule 61 excludes cover for liabilities, losses etc., that are incurred by the Member in relation to such activities to the extent that they cannot be said to arise as a natural and necessary adjunct and component of the operation of the Ship. 

(B) …the operation by the Member of submarines, mini-submarines, diving bells or remotely operated underwater vehicles … (Rule 61.a) Except when used in connection with the salvage operations that are described in Rule 61.b, Rule 61.a excludes risks that arise as a result of the operation by the Member of submarines, mini-submarines, diving bells or remotely operated underwater vehicles. 

Cover is excluded regardless of the reason why such craft are being used. Therefore, cover is excluded whether the craft is being used in a manned or unmanned condition for scientific research purposes or for commercial or any other purposes, e.g. as an underwater camera, diving bell or trencher operated from a diving support or survey vessel. 

Furthermore, cover is excluded when such liabilities, losses etc., are incurred as a result of the operation of underwater craft by the Member and will usually arise when the craft are operated by the Member himself from the Member’s Ship. However, the craft will also be deemed to be operated by the Member if the Ship is chartered and any underwater craft that are owned by the Member are operated by the charterers from the Member’s Ship. However, if the Ship is chartered, but is used by the charterers as a base for their own underwater craft, the Association may take the view, depending on the particular circumstances, that the craft are not being operated by the Member for the purposes of Rule 61.a. 

The Member may also incur liability when the underwater craft are being operated by a third party pursuant to a contract that makes the Member liable for such operations. If the Association has not approved such contractual terms, then cover for the Member’s liability is excluded under Rule 55. 

(C) …the activities of professional or commercial divers where the Member is responsible for such activities other than… (Rule 61.b)

Rule 61.b excludes all risks that arise “out of the activities of professional or commercial divers” (except for when such activities arise in connection with specified salvage, inspection, repair and maintenance operations, or recreational activities)¹ in circumstances in which the Member is responsible for such activities. For example, cover is excluded for liabilities, losses etc., that are incurred by the Member for the death of, or for personal injury to, professional or commercial divers, and for any third-party liabilities that arise as a result of the activities of such divers. 

Liabilities, losses etc., are deemed to ‘arise out of’ the activities of professional and commercial divers for the purposes of Rule 61 only when they arise during the course of events that occur whilst the divers are actually engaged in diving activities. Consequently, the exclusion does not apply to claims that are made against the Member as a result of events that occur, for example, whilst the divers are being carried by the Ship to or from the dive site, or whilst the divers are being carried by the Ship in between dives. 

Cover is excluded only in relation to the activities of those professional and commercial divers for whose activities the Member is responsible. In the majority of cases, cover is excluded because the divers are employed and paid by the Member, but cover is also excluded if the Member has agreed to indemnify a third party employer of divers since the Member is also responsible for the activities of the divers in such circumstances. 

(D) …activities arising out of salvage operations… (Rule 61.b.i) Traditionally, the availability of salvage operations has been considered to be an essential safeguard for the operation of ships, and the use of divers to carry out inspections or any other work that may be necessary for such purposes to be an integral component of salvage operations. Consequently, the risks that arise as a result of such diving activities are considered to be risks that should be shared by the members of a marine mutual association. Therefore, cover is not excluded for the activities of professional and commercial divers that are employed by the Member either on board an entered Ship as members of the Crew, e.g. where the Ship is a salvage tug, or on subsidiary craft that operate from the Ship as the mother vessel in salvage operations. 

(E) …incidental diving operations carried out in relation to the inspection, repair or maintenance of the Ship in relation to damage by the Ship. (Rule 61.b.ii) Such activities are considered to be necessary for the safe operation of the Ship and consequently, cover is not excluded for liabilities, losses etc., that arise as a result of such activities. Cover is available even if the divers are employed by third parties. However, should the Member incur liabilities which would not have arisen but for the terms of a service contract pursuant to which the divers have been appointed, cover is not available unless the terms of the contract have been approved by the Association or the Association decides in its discretion that the Member should be reimbursed.² 

(F) …recreational diving activities (Rule 61.b.iii) The operators of cruise ships and other passenger ships offer their passengers a range of recreational pursuits that include training by professional divers or diving expeditions that are led and/or accompanied by professional divers that are employed or contracted by the operators of such Ships. Such activities are considered to be a safe and logical adjunct to the services that are provided by the operators of such Ships.³ Consequently, cover is not excluded for liabilities, losses etc., that arise as a result of the provision of such services by professional divers that are employed by the Member, or for whose services the Member is responsible. However, as is stated in the commentary under (E), should the Member incur liabilities which would not have arisen but for the terms of a service contract pursuant to which the divers have been appointed, cover is not available unless the terms of the contract have been approved by the Association or the Association decides in its discretion that the Member should be reimbursed. Cover is unlikely to be available if the terms of the contract oblige the Member to indemnify the divers notwithstanding the fact that the liability that the divers incur to passengers who have been engaged in the recreational diving activities has been caused by the divers’ negligence.⁴ Therefore, to ensure that cover is available, Members are urged to ensure that the terms of such contracts have been approved by the Association. 

The Association is also able to offer alternative cover for certain liabilities, losses etc., that arise as a result of diving activities that are excluded under Rule 61.⁵

1 See (D) and (E) below

2 See the Guidance to Rule 55.

3 See (B) to the Guidance to Rule 28.

4 See also (F) to the Guidance to Rule 57.

5 See further details of the Divers P&I Cover on www.gard.no.