Clause 17: Agency Commission

In no case shall any sum be allowed under this insurance either by way of remuneration of the Assured for time and trouble taken to obtain and supply information or documents or in respect of the commission or charges of any manager, agent, managing or agency company or the like, appointed by or on behalf of the Assured to perform such services

Comments to ITHC

The clause establishes that the insurers will not remunerate the assured for time and trouble incurred in procuring documentation or information relating to a claim. The same applies to charges paid to the external suppliers for their performance of such services.

The clause has in practice been interpreted to exclude all claims for remuneration for the assured’s internal costs in relation to any aspect of the claim, e.g. in arranging for salvage services or repair etc.

In practice insurers will accept only those expenses which fall within the terms of the Association of Average Adjusters Rule of Practice A3, which states that only costs incurred to the shipowner in average in respect of services rendered on behalf of cargo, when such services are not involved in the contract of affreightment, will be allowed. This clause does not exclude the fees and charges of an agent at a port, which under certain circumstances can be recoverable along with the other port charges as part of the cost of repairs.

Comments to NMIP

The same principle applies under the NMIP.

NMIP Cl. 4-5 establishes that the insurer is liable for the necessary costs of determining the loss and calculating the compensation.

The commentary suggests a relatively strict interpretation of this clause, and administration costs and costs for external assistance that should have been obtained internally will not be recoverable (typically costs of hiring someone to draw up a general invoice)

As under the ITCH, the NMIP provides cover for assistance from an agent at a port call as part of the cost of repairs.