Institute Yacht Clauses (CL.328) — English Translation

1. Vessel ↑ top

The term “Vessel” means the hull, machinery, boat(s), gear and equipment, as would normally be sold with the vessel if she changed ownership.

2. In commission and laid up ↑ top

2.1. The Vessel is held covered, subject to the provisions of this insurance:

2.1.1. whilst in commission at sea or on inland waters or in port, in docks, marinas, on ways, gridirons, pontoons or on the hard or mud, or in the place of storage ashore, including hauling out and launching, with leave to proceed to sea or sail with or without pilots, to go on trial trips and to assist and tow vessels or craft in distress, or as is customary; but it is agreed that the Vessel shall not be towed, except as is customary or when in need of assistance, nor undertake towage or salvage services under a contract previously arranged by the Owners, Masters, Managers or Charterers.

2.1.2. whilst laid up out of commission, in accordance with Clause 4, including hauling out and launching, whilst moving in the shipyard or marina, during dismantling, fitting out, rigging, ordinary maintenance or under survey (also including dock entry and exit and the periods relating to laying up or fitting out, with leave to move under tow or otherwise to or from her berth, but not beyond the limits of the port or place where laid up); but excluding, save on notice and against an additional premium to be agreed, any period during which the Vessel is used as a houseboat, or undergoes major repairs or alterations.

2.2. Notwithstanding Clause 2.1 above, gear and equipment, including outboard motors, are held covered subject to the provisions of this insurance whilst in the place of storage or repair ashore.

3. Navigation and chartering warranty ↑ top

3.1. It is agreed that the Vessel shall not navigate beyond the limits set out in the policy conditions, or shall be held covered on terms to be agreed, notice being given to the Underwriters.

3.2. It is agreed that the Vessel shall be used solely for private pleasure purposes and shall not be let or chartered, unless specially agreed by the Underwriters.

4. Lay-up warranty ↑ top

It is warranted that the lay-up out of active commission is as stated in the policy conditions, or shall be held covered on terms to be agreed, provided notice is given to the Underwriters.

5. Speed warranty ↑ top

5.1. It is warranted that the maximum designed speed of the Vessel — or of the parent vessel in the case of a vessel with boat(s) — does not exceed 17 knots.

5.2. Where the Underwriters have agreed to delete this warranty, the conditions of Clause 19 for “Speedboats”, set out below, shall apply.

6. Continuation ↑ top

Should the Vessel at the expiry of this insurance be at sea, or in distress, or at a port or place of refuge or call, she shall be held covered — provided immediate notice is given to the Underwriters and at a premium to be agreed — until she is moored or safely anchored at her next port of call.

7. Assignment ↑ top

No assignment of this insurance, nor any interest therein or in any sums which may be or become payable thereunder, shall be binding upon or recognised by the Underwriters, unless a dated notice of such assignment or interest, signed by the Assured (and by the assignor in the case of a subsequent assignment), is endorsed on the policy, and the policy so endorsed is produced before payment of any claim or return of premium.

8. Change of ownership ↑ top

This Clause 8 shall prevail notwithstanding any provision in the policy — whether written, typed or printed — to the contrary.

8.1. Should the Vessel be sold or transferred to a new owner, or, where the Vessel is owned by a company, should there be a change in the controlling interest of the company, then, unless the Underwriters consent in writing to continue cover, this insurance shall be cancelled from the moment of sale or transfer, a pro-rata daily net return of premium being made, calculated on the premium charged for the period of active commission and/or lay-up.

8.2. If, however, the Vessel has sailed or is at sea at the time of sale or transfer, such cancellation shall, if the Assured so requests, be suspended until arrival at port or place of destination.

9. Perils covered ↑ top

Subject always to the exclusions of this insurance:

9.1. this insurance covers loss of or damage to the subject-matter insured caused by:

• 9.1.1. perils of the seas, rivers, lakes or other navigable waters;
• 9.1.2. fire;
• 9.1.3. jettison;
• 9.1.4. piracy;
• 9.1.5. contact with dock or harbour equipment or installations, land conveyance, aircraft or similar objects, or objects falling therefrom;
• 9.1.6. volcanic eruption, earthquake or lightning.

9.2. and, provided such loss or damage is not the result of want of due diligence by the Assured, Owners or Managers, this insurance covers:

9.2.1. loss of or damage to the subject-matter insured caused by:

• 9.2.1.1. accidents in loading, discharging or shifting stores, gear, equipment, machinery or fuel;
• 9.2.1.2. explosions;
• 9.2.1.3. malicious acts;
• 9.2.1.4. theft of the entire vessel or her boat(s), or of outboard motor(s) provided they are properly fixed to the vessel or her boat(s) by an anti-theft device in addition to their normal mounting; or theft of machinery (including outboard motor(s)), gear or equipment following forcible entry into the vessel or the place of storage or repair.

9.2.2. loss of or damage to the subject-matter insured — excluding the engine and its connections (but not the bracket, shaft or propeller), electrical equipment, and batteries and their connections — caused by:

• 9.2.2.1. latent defect in the hull or machinery, breakage of the shaft, or bursting of a boiler (excluding the cost and expense of replacing or repairing the defective part, the broken shaft or the boiler that has burst);
• 9.2.2.2. the negligence of any person, but excluding the cost of remedying any defect resulting from negligence or breach of contract in respect of any repair or modification work carried out for the account of the Assured and/or the Owners, or in respect of the maintenance of the vessel.

9.3. this insurance covers the expense of sighting the bottom after a stranding, if reasonably incurred for that purpose, even if no damage is found.

10. Exclusions ↑ top

No claim shall be admitted in respect of:

• 10.1. the detachment or falling overboard of the outboard motor from the vessel;
• 10.2. a tender having a maximum designed speed exceeding 17 knots, unless that tender is specifically covered by this insurance and also subject to the conditions of Clause 19 (Speedboats) set out below, or is on board the parent vessel or laid up ashore;
• 10.3. a tender not permanently marked with the name of the parent vessel;
• 10.4. sails and protective covers split by the wind, or blown away while being set, unless in consequence of damage to the spars to which the sails are bent, or occurring because the vessel is stranded, or is in collision or contact with an external substance (including ice) other than water;
• 10.5. sails, masts, spars, or standing and running rigging while the vessel is racing, unless the loss or damage is caused by the vessel being stranded, sunk, burnt, or in collision or contact with an external substance (including ice) other than water;
• 10.6. personal effects;
• 10.7. consumable stores, fishing gear or moorings;
• 10.8. the sheathing or its repairs, unless the loss or damage has occurred because the vessel is stranded, sunk, burnt, or in collision or contact with an external substance (including ice) other than water;
• 10.9. loss or expense incurred in remedying a fault in design or construction, or any cost or expense incurred by reason of betterment or alteration in design or construction;
• 10.10. the engine and its connections (but not the bracket, shaft or propeller), electrical equipment, and batteries and their connections, where the loss or damage is a consequence of heavy weather, unless the loss or damage has occurred through submersion of the vessel; but this Clause 10.10 does not exclude loss or damage caused by the vessel being stranded, or by collision or contact with any other vessel, dock or pier.

11. Third-party liability ↑ top

This clause shall apply only when a sum is stated for this purpose in the policy conditions.

11.1. The Underwriters agree to indemnify the Assured for any sum or sums which the Assured shall become legally liable to pay, and shall pay, by reason of the interest in the insured vessel and arising from accidents occurring during the currency of this insurance, in respect of:

• 11.1.1. loss of or damage to any other vessel or property thereon;
• 11.1.2. loss of life, personal injury or illness, including payments made for the salvage of life, caused on or about the vessel or on another vessel;
• 11.1.3. any actual or attempted raising, removal or destruction of the wreck of the insured vessel or her cargo, or any negligence or failure occurring in raising, removing or destroying the same.

11.2. Legal costs

The Underwriters, provided they have agreed in advance in writing, will also pay:

• 11.2.1. the legal costs incurred by the Assured, or which the Assured is obliged to pay, to defend his liability or to bring proceedings to limit it;
• 11.2.2. the costs of representation at any judicial inquiry or investigation of a fatal accident.

11.3. Sister ships

Should the vessel hereby insured come into collision with another vessel belonging wholly or in part to the same Owners, or under the same Management, or receive salvage services from such a vessel, the Assured shall have the same rights under this policy as if the other vessel were wholly owned by Owners not interested in the vessel hereby insured; but in such cases the liability for the collision, or the sum to be paid for the services rendered, shall be referred to a sole arbitrator agreed upon between the Underwriters and the Assured.

11.4. Navigation by other persons

The provisions of this Clause 11 shall extend to any person navigating or in charge of the insured vessel with the authority of the Assured named in this insurance (not being a person directing, or employed by the director of, a shipyard, marina, repair yard, slipway, yacht club, sales agency or similar organisation) and who, while navigating or in charge of the vessel, becomes liable, as a result of an occurrence covered by this Clause 11, to pay and does pay any sum to any person or persons other than the Assured named in this insurance. The indemnity under this clause shall enure to the benefit of the Assured and shall benefit the person navigating or in charge of the vessel, as described above, only by written application made through the Assured himself. This extension shall not increase the Underwriters' liability beyond the limit of liability set out in Clause 11.8, and shall be subject to all the other terms, conditions and warranties of this contract. Nothing in this Clause 11.4 shall be held to override Clause 3.2.

11.5. Wreck-removal extension

This insurance shall also pay the expenses — after deducting the proceeds of the sale of anything salvaged — of removing the wreck of the insured vessel from any place occupied, leased or owned by the Assured.

11.6. Exclusions to this Section II — Liabilities

Notwithstanding this Clause 11, this insurance shall not respond for any liability, cost or expense arising in respect of:

• 11.6.1. any payment, direct or indirect, made by the Assured under workers' compensation or employer's-liability legislation, and any other legal liability in respect of accidents or illness of workers or any other persons employed by the Assured, or by any person to whom the protection of this insurance extends under Clause 11.4, in the performance of any function in, on, about or in connection with the vessel, her cargo, materials or repairs;
• 11.6.2. any boat belonging to the vessel having a maximum designed speed exceeding 17 knots, unless that boat is specifically covered by this insurance and also subject to the conditions of Clause 19 (“Speedboats”), or is on board the parent vessel or laid up ashore;
• 11.6.3. any liability to, or incurred by, any person engaged in water-skiing or aquaplaning while being towed by the vessel, or preparing to be towed, or after being towed, until safely on board or ashore;
• 11.6.4. any liability to, or incurred by, any person engaged in a sport or activity, other than water-skiing or aquaplaning, while being towed by the vessel, until safely on board or ashore;
• 11.6.5. punitive or exemplary damages, howsoever described.

11.7. Liabilities of water-skiers

Should Clauses 11.6.3 and/or 11.6.4 be deleted, the liabilities mentioned in such clause(s) shall be covered by this insurance, subject always to the warranties, conditions and limitations of this contract.

11.8. Limit of liability

The liability of the Underwriters under this Clause 11, in respect of any one accident or series of accidents arising out of the same event, shall in no case exceed the sum set for this purpose in the policy conditions; but where the Assured's liability has been contested with the written consent of the Underwriters, they will also pay a like proportion of the legal costs incurred by the Assured, or which he is obliged to pay.

12. Deductible and franchise ↑ top

12.1. No claim for a risk covered by this insurance shall be paid unless the aggregate of all claims arising out of each separate accident or event exceeds the sum set for this purpose in the policy conditions (including claims under Clauses 11, 14 and 15), in which case that sum shall be deducted. This Clause 12.1 shall not apply to claims for total loss or constructive total loss of the vessel, even where there are associated claims under Clause 15 arising from the same accident or event.

12.2. Before applying Clause 12.1, and in addition to it, deductions “new for old” — not exceeding one-third of the value — may be made at the Underwriters' discretion in respect of loss of or damage to:

• 12.2.1. protective covers, sails and standing and running rigging;
• 12.2.2. outboard motors, whether or not separately insured under this insurance.

13. Notice of claim and tenders ↑ top

13.1. In the event of an occurrence which may give rise to a claim under this insurance, immediate notice shall be given to the Underwriters; the Police shall also be notified immediately in the case of theft or malicious damage.

13.2. Where a loss or damage occurs, the Underwriters shall be notified before survey; and if the vessel is abroad, the nearest Lloyd's Agent shall also be notified, so that a surveyor may be appointed to represent the Underwriters if they so wish.

13.3. The Underwriters shall be entitled to decide to which port the vessel shall proceed for docking or repair (the additional voyage expense incurred to comply with the Underwriters' requirements being reimbursed to the Assured), and shall have a right of veto concerning the place of repairs or the repairing firm.

13.4. The Underwriters may also take, or require to be taken, tenders for the repair of the vessel.

14. Salvage charges ↑ top

Subject to any provision expressly made in this insurance, salvage charges incurred to prevent a loss arising from a covered risk may be recovered as if they were a loss by those risks.

15. Duty of the assured (sue and labour) ↑ top

15.1. In the event of loss or casualty, it is the duty of the Assured and his employees and Agents to take such measures as are reasonable in order to avert or minimise a loss that would be recoverable under this insurance.

15.2. Subject to the provisions set out below and to Clause 12, the Underwriters will contribute to the charges properly and reasonably incurred by the Assured, his employees and Agents in taking such measures. General average, salvage charges, the legal costs of defence or of a collision claim, and the costs incurred by the Assured in defending the liability covered under Clause 11.2, shall not be recoverable under this Clause 15.

15.3. The Assured shall give the Underwriters all possible assistance in obtaining information and evidence, should the Underwriters wish, on behalf of the Assured, to institute proceedings at their own expense and for their own benefit to recover compensation or secure an indemnity from third parties in connection with any risk covered by this insurance.

15.4. Measures taken by the Assured or the Underwriters with the object of saving, protecting or recovering the subject-matter insured shall not be considered a waiver or an acceptance of abandonment, nor shall they prejudice in any way the rights of either party.

15.5. The sum recoverable under this Clause 15 shall be additional to the loss otherwise recoverable under this insurance; but in no case shall the sums recoverable under Clause 15.2 exceed the sum insured under this insurance in respect of the vessel.

16. Unrepaired damage (deferred repairs) ↑ top

16.1. The measure of indemnity in respect of claims for unrepaired damage shall be the reasonable depreciation in the market value of the vessel at the time this insurance expires, arising from such damage, but shall in no case exceed the reasonable cost of repairs.

16.2. In no case shall the Underwriters be liable for unrepaired damage in the event of a subsequent total loss (whether or not covered by this insurance) sustained during the period of this insurance or any extension of it.

16.3. The Underwriters shall not be liable in respect of unrepaired damage for more than the insured value at the time this insurance expires.

17. Constructive total loss ↑ top

17.1. In ascertaining whether the vessel is a constructive total loss, the insured value shall be taken as the repaired value of the vessel, and no account shall be taken of the damaged or break-up value of the vessel or its wreck.

17.2. No claim for constructive total loss based upon the cost of recovering and/or repairing the vessel shall be recoverable unless that cost would exceed the insured value. In making this determination, only the cost relating to a single accident, or to a sequence of damages arising from the same accident, shall be taken into account.

18. Disbursements warranty ↑ top

It is agreed that no sum shall be insured by way of Policy Proof of Interest or Full Interest Admitted, on account of the Assured, Mortgagees or Owners, on disbursements, commissions, profits or other interests, or excess or increased value of hull or machinery, however described — unless the insured value of the vessel exceeds £50,000 sterling, in which case it shall not exceed 10% of the insured value in respect of the vessel as set out in the policy conditions. It is always understood that a breach of this warranty shall not be available to the Underwriters as a defence against the claim of a mortgagee who has accepted this insurance without knowledge of such breach.

19. Speedboat clause ↑ top

WHEN THIS CLAUSE 19 APPLIES, IT SHALL PREVAIL OVER ANY PROVISION OF THE PRECEDING CLAUSES INCONSISTENT WITH IT.

19.1. It is an essential condition of this insurance that, when the insured vessel is under way, the Assured named in the policy conditions or other competent person(s) be on board and in control of the speedboat.

19.2. No claim shall be admitted in respect of loss of or damage to the speedboat, liability to third parties, or salvage services:

• 19.2.1. caused by or in consequence of stranding, sinking, swamping, or being adrift, the speedboat having been left moored or anchored unattended on an exposed coast or beach;
• 19.2.2. occurring while the speedboat is taking part in racing, speed trials, or any other trials connected therewith.

19.3. No claim shall be admitted in respect of the rudder, bracket, shaft or propeller:

• 19.3.1. under Clauses 9.2.2.1 and 9.2.2.2;
• 19.3.2. for any loss or damage caused by heavy weather, water, or impact other than with another vessel, dock or pier; but this Clause 19.3.2 does not exclude damage occurring through swamping of the speedboat as a consequence of heavy weather.

19.4. If the speedboat is fitted with an inboard engine, no liability shall attach under this insurance in respect of any claim caused by or arising from fire or explosion, unless the vessel is fitted — in the engine room (or engine space), fuel tank and galley — with a fire-extinguishing system of automatic operation, or having controls on the bridge, properly installed and maintained in good working order.

20. Cancellation and return of premium ↑ top

This insurance may be cancelled by the Underwriters at any time on giving the Assured 30 days' notice, or by mutual agreement, against a pro-rata daily net return of premium, calculated on the premium charged for the period in active commission and/or laid up.

21. War exclusion ↑ top

This insurance shall in no case cover loss, damage, liability or expense caused by:

• 21.1. war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power;
• 21.2. capture, seizure, arrest, restraint or detainment (barratry and piracy excepted), and the consequences thereof or any attempt thereat;
• 21.3. derelict mines, torpedoes, bombs or other derelict weapons of war.

22. Strikes and political acts exclusion ↑ top

This insurance shall in no case cover loss, damage, liability or expense:

• 22.1. caused by strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions;
• 22.2. caused by terrorists or any person acting from a political motive.

23. Nuclear exclusion ↑ top

In no case shall this insurance cover loss, damage, liability or expense arising from:

• 23.1. any war weapon employing atomic or nuclear fission and/or fusion, or other like reaction, or radioactive force or matter;
• 23.2. ionising radiations or radioactive contamination from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel;
• 23.3. the radioactive, toxic, explosive or other hazardous properties of any nuclear explosive assembly or nuclear component thereof.

Clause reference: CL.328 C (1/11/85). Insurer of record: GENERALI España, S.A. de Seguros y Reaseguros.