Rule 78 Cover for Co-assureds and Affiliates

The Association may agree, subject to the provisions of this Rule 78 and to such other terms as may be required, to extend the cover afforded by the Association to the Member to:

1. any person who is affiliated to or associated with the Member (not being a Co-assured or other Affiliate), and who shall not be specifically named in the terms of entry; and

2. any other named co-assured.

Affiliates and Co-assured shall not be entitled to Membership of the Association.

The cover afforded to a Co-assured in categories (a), (b) and (c) below shall extend only to liabilities, losses, costs and expenses (or, in respect of Defence cover, to costs incurred in connection with claims) arising out of operations and/or activities customarily carried on by or at the risk and responsibility of shipowners (or, in the case of a Charterer's Entry, charterers):

1. any person interested in the operation, management or manning of the Ship;

2. the holding company or the beneficial owner of the Member or of any Co-assured falling within category (a) above;

3. any mortgagee of the Ship or finance institution (or its subsidiary or affiliate) as the owner leasing the Ship to the Member.

The cover afforded to a Co-assured who is a charterer of the Ship and who is affiliated to or associated with the Member (other than a Co-assured expressly given cover by the Association in accordance with Rule 78.6) shall extend only to the risks, liabilities, losses, costs and expenses in respect of which that Member has cover, and shall be limited in accordance with Rule 52.

The cover afforded to a Co-assured who has entered into a contract with the Member for the provision of services to or by the Ship, and any person in the Co-assured's group, shall extend only to liabilities, losses, costs and expenses which are to be borne by the Member under the terms of the contract and which to the extent only they would, if borne by the Member, be recoverable by the Member from the Association, provided that

1. the contract has been approved by the Association, and

2. the contract includes a Knock for Knock agreement in respect of any and all persons in the Co-assured's group.

The cover afforded to all other categories of Co-assured, other than those referred to in Rules 78.3, 78.4 and 78.5, shall only extend insofar as such Co-assured may be found liable to pay in the first instance for loss or damage which is properly the responsibility of either the Member or, as appropriate, an affiliated charterer pursuant to Rule 78.4 (or, in the case of Defence cover, insofar as such Co-assured may be required to resist a claim arising from such a liability), and nothing herein contained shall be construed as extending cover in respect of any amount to the extent such amount would not have been recoverable from the Association by either the Member or, as appropriate, an affiliated charterer pursuant to Rule 78.4, had the claim in respect of such loss or damage been made or enforced against the Member or affiliated charterer.

The cover afforded to an Affiliate shall extend only, in the case of P&I cover, to claims made or enforced through the Affiliate in respect of any liabilities for which the Member has cover and, in the case of Defence cover, to costs incurred in resisting claims which, if brought against the Member, would be within the Member's cover, and nothing herein contained shall be construed as entitling an Affiliate to recover any amount which would not have been recoverable from the Association by the Member had the claim been made or enforced against the Member.

To the extent that the Association has indemnified a Co-assured (other than a Co-assured in the categories referred to in Rules 78.3 and 78.4) or an Affiliate in respect of a claim, it shall not be under any further liability and shall not make any further payment to any person whatsoever, including, where co-assured under the Member’s entry, the Member, or, where co-assured under the affiliated charterer’s cover afforded pursuant to Rule 78.4, that charterer, in respect of that claim or of the loss or damage in respect of which that claim was brought.