Clause 2: Continuation

Should the vessel at the expiration of this insurance be at sea or in distress or at a port of refuge or of call, she shall, provided previous notice be given to the Underwriters, be held covered at a pro rata monthly premium to her port of destination.

Comments to ITCH

The clause gives the Assured an option to extend the insurance period by giving notice to Insurers in two different situations. Firstly, the insurance can be extended if the vessel is at sea or at a port of call in the course of normal operations. Today with modern communications it is doubtful whether there is any real need to extend the policy period in such cases. A new policy taking effect from a specified time and date will almost certainly have been agreed.

The second situation is where the vessel has suffered a casualty and is in distress or in a port of refuge. As long as the vessel’s situation remains critical or unresolved it makes sense for the policy on risk at the time the critical situation commenced to remain on risk until the vessel is in a safe and stable condition.

NMIP Comparison

NMIP Cl. 10-10, sub-clause 1, provides for automatic extension of the insurance period where the ship has sustained damage for which the insurer is liable and repairs are necessary. The insurance is extended until the ship has dropped anchor or has been moored in the first place where permanent repairs can be effected. If repairs are carried out at that place, the insurance is extended until the repairs are completed.

According to Cl. 6-4 the insurer may require an additional premium in proportion to the extended time.

If a ship is missing or abandoned, defined in Cl. 11-7, the insurance is extended until the ship has dropped anchor or has been moored in the first port. The insurance shall not be extended beyond two years after the expiry of the insurance period under Cl. 11-8.

If it is uncertain whether a claim for total loss will be made, and the ship is subsequently salvaged or reported safe, and additional premium may only be demanded from the time the assured, or someone acting on his behalf, gained control of the ship, under Cl. 6-4, sub-clause 2.

Clause 10-10, sub-clause 2, simply makes it clear that the commencement of the next policy is postponed to correspond with the extension of the current policy.