Introduction
Although there are no legal requirements to compel a shipowner to insure his vessel (provided hisvessel is free of mortgage commitments), most owners trading today have various forms of insurance cover. Normally, a shipowner may recover any loss which he suffers if:
· The damage is due to an insured peril;
· The owner can provide sufficient evidence of the cause and extent of the damage suffered;
· The vessel was in a seaworthy condition at the time of the incident which caused the loss and was engaged in a lawful trade; and
· The value of the loss exceeds any deductible that may apply to the policy.
The terms of all marine insurance policies place an obligation on owners to maintain the vessel's equipment in a thoroughly efficient state. The term equipment as it relates to a commercial vessel covers the hull, machinery, stores, provisions, bunkers, and all other fittings that may be required for the trade in which the vessel is involved.
Any damage to or failure of the ship's equipment, which could affect the vessel’s seaworthiness or the efficient state of the vessel must be reported to owners as soon as it occurs. This rule applies to any defect in the vessel's equipment, which can be reasonably detected by the due diligence of the officers on board in the performance of their duties.
Owners are also under an obligation to maintain a safe working environment at all times on board the vessel. A relatively minor defect in a particular piece of equipment may affect the safety of the working environment. For example, if the safety guard on a motor or part of machinery falls off, and if the initial failure of the equipment is not noticed, it often becomes normal for the crew to operate this equipment in what may be a dangerous manner. The Master, therefore, must be constantly vigilant against such minor defects.
If the ship's equipment becomes damaged, owners will generally be able to recover any loss if the requirements listed above are fulfilled. However, the Master is under a duty to act as if the vessel is uninsured and provide a full and complete record of the incident.
This chapter examines the following:
The type of evidence required from the Master in the event of equipment failure
Evidence relating to the cause of damage,
Evidence required if damage causes stoppage or delay,
Evidence required when damage or failure impairs Vessels efficiency,
The scope of the insurance cover
Risks covered
Hull and Machinery,
P&I,
Role of various patties involved
Salvage Association,
P&I Surveyor,
Classification Society Surveyor.
Stevedore damage.
In the appendix to this chapter, a case history is provided and the procedures to be followed in the event of stevedore damage are discussed.
Evidence required from the Vessel
Although the list provided below is not exhaustive, it gives an indication of the type of evidence required by the various parties involved in the event of equipment failure
Evidence related to cause of damage
1. Damage report prepared by the Master or chief engineer;
2. Photographs of the damaged equipment in place and after removal;
3. Parts of the damaged equipment and other relevant items, which should be retained for inspection;
4. Log books and maintenance records relating to the piece of damaged equipment;
5. Any other records relating to the damaged equipment showing running hours, or evidence of previous inspections or surveys;
6. Reports from other personnel involved in the incident.
Evidence required if damage causes stoppage or delay (in addition to above)
1. Deck and engine log books covering the period of the incident;
2. Statement of fuel remaining on board at the beginning and end of the stoppage;
3. Details of any deviation caused by the incident;
4. If deviation to a port of refuge is required:
a. reports or confirmation of class by classification society surveyor,
b. statement of facts from port agent,
c. details of all shore assistance provided that it is attributable to damage;
5. Names of all the surveyors who have attended the vessel with full details of the organizations they represent;
6. Copies of telex and radio messages sent or received, particularly those directed to timecharterers dealing with deviation and off-hire times.
Evidence required when damage or failure impairs vessel's efficiency
1. Details of additional time and fuel used as a consequence of the inefficiency;
2. Details of the extra labor and equipment used and a record of times when they were used;
3. Copies of all correspondence from the port agent holding vessel liable for delays.
If the vessel's efficiency has been impaired as a result of damage to equipment, the Master should follow the procedures listed below:
1. Ensure that statements and time sheets are accurate before signing them;
2. Ensure that written permission is obtained from the port authority, if as a result ofdelay caused by the vessel's inefficiency, the vessel has remained alongside a berth aftercompletion of cargo operations.
Many disputes have occurred when ships have remained alongside on the strength of a verbal assurance from a jetty foreman, and consequently, owners have been faced with high penalty charges for remaining on the berth. The port agency will have details of charges involved.
The extent of cover provided by marine insurance policies varies enormously. The Master should verify his owner's cover for each vessel. The lists provided below give an indication of the typeof risks covered by hull and machinery and protecting and indemnity ("P&I") policies.
Hull and Machinery (relating to damage to ship)
1. Perils of the sea, rivers, lakes, or other navigable waters;
2. Fire and explosion;
3. Violent theft by persons outside the vessel;
4. Jettison;
5. Piracy;
6. Breakdown of or accidents to nuclear installations or reactors;
7. Contact with aircraft or similar objects or objects falling from aircraft, contact with land conveyances, docks or harbor equipment, or installations;
8. Earthquakes, volcanic eruptions, or lightning;
9. Accidents in loading, discharging, or shifting cargo or fuel;
10. Bursting of boilers, breakage of shafts, or any latent defect in the machinery or hull;
11. Negligence of the Master, officers, crew, or pilots;
12. Negligence of repairers or charterers;
13. Barratry of Master, officers, or crew;
14. Pollution hazards (which includes damage to ship caused by preventive measures);
15. Three-fourths collision liability (payment to third party).
P&I Cover (relating to damage to or failure of ship's equipment)
1. Damage to third party's equipment and property;
2. One-fourth collision liability;
3. Oil pollution.
Role of Parties Involved
Salvage Association -acting on behalf of hull underwriters
When damage to a vessel occurs which may give rise to a claim, owners have a duty to advise underwriters promptly. The underwriters will contact the Salvage Association, who will in turn instruct a surveyor to attend the vessel. The surveyor's job is to establish the facts surrounding the damage. The Salvage Association is an independent Organisation, which has representatives all over the world.
P&I Surveyor -acting on behalf of owners -
When damage occurs to the property of a third party - for example, if a pipe fails during bunkering and oil is spilled into the harbor owners' P&I club will protect their interests in the ensuing investigation and clean up operation. When damage occurs, the owners or Master should alert the local P&I representative, who will instruct a surveyor to attend and assist. He will submit his report to the owners, and, if necessary, will also arrange security with the club.
Classification Society Surveyor-acting on behalf of Class -
The role of a classification society in the merchant shipping community of today is to:
· Develop rules and standards for the design and construction of vessels;
· Conduct surveys during the construction of vessels in order to verify that all rulesand standards are complied with and to conduct regular surveys during a vessel'sservice in order to monitor the standard of maintenance;
· Assign class when rules and standards are upheld.
When damage to any part of the ship occurs which could affect the vessel's seaworthiness, a surveyor representing the vessel's classification society will attend. All marine insurance policies impose an obligation on owners to maintain the vessel in class. If class is suspended as a result of a failure to comply with survey requirements or as a result of unrepaired damage, insurance cover is terminated automatically from that time. However, if the damage is an insured risk, termination of cover will only occur if the vessel sails from her next port of call without the prior approval of the classification society.
Stevedore Damage
If stevedores cause damage to the ship's equipment, the Master must take care to comply with the terms of the charter party relating to stevedores. Stevedores often are appointed by charterers,shippers, or receivers. However, charter parties may contain terms, which provide that charterers are not responsible for any damage caused by stevedores. Examples of such clauses are asfollows:
"Charterers, Shippers, or Receivers shall not be responsible for the act and default of the Stevedores at loading/discharging polls. All claims for damage allegedly caused by Stevedores to be settled directly between Owners and Stevedores at loading/discharging ports. Master to notify Stevedores of damage, if any, in writing within 24 hours after occurrence, otherwise Stevedores not to be held liable."
"Charterers not to be responsible for Stevedore or other damage to the vessel unless notified in writing by the Master at the time of the occurrence of the damage or as soon as practical. The Master is to co-operate with Chatierers and Agents in giving prompt Notice of Claim in writing to party causing damage and securing their admission of liability. Copy of correspondence, together with original letter acknowledging liability, if any, to be sent to Charterers. On damage occurring, Master shall immediately report telegraphically to Charterers."
Charterers may not always escape liability as a result of such a clause. However, as owners rarely have any contractual contact with stevedores and thus have no direct recourse against them, it is important that the Master complies with any such clauses. Moreover, if all the documentation covering the incident has not been completed at the time of the incident, recovery may not be possible.
The Master should also ensure that all unrepaired stevedore damage is noted in any off-hire survey and that charterers are invited to inspect damage repairs being carried out in dry-dock. If the damage is minor and does not effect the vessel's seaworthiness or efficient state, repairs maybe deferred to the next dry-docking.
APPENDIX
Case History
The subject vessel was a chemical tanker, on passage from Swansea to Gothenburg and Fredericia. She was loaded with 99OMT of ethanol and isopropanol. She sailed from Swansea on 12 December 1981.
On 13 December, the vessel met severe heavy weather with winds up to force 10. During the morning of 14 December, the wind increased to force 11. The vessel passed through the Dover Straits, and at 0648 hours, the Sandettie NE buoy was seen close on the starboard bow. The vessel's helm was put immediately hard over to port, but this failed to have any effect on her set. At 0650 hours, a bump was felt on her starboard quarter followed by an explosion and abnormal noises from the engine room.
It was assumed that the propeller had touched the chain of the buoy. The 2nd engineer, on duty in the engine room, promptly advised that the main engine gearbox was vibrating and that smoke was issuing from the stern gland. He requested that the engine be stopped.
On stopping the main engine, an inspection was made of the main engine gearbox, and it was observed that the gearbox casing had completely fractured just above the holding down bolts. It was also noted that the propeller was being turned by water movement. In addition an inspection was made of the stern tube seals. These appeared to be intact, as there was no evidence of leakage into the engine room.
A mayday call was sent by radio at 0655 hours requesting immediate tug assistance. The Dover and French coastguards answered the call, and another vessel in the vicinity agreed to stand byuntil a suitable tug arrived.
Attempts were made by the ship's engineers to secure the shafting, but these were unsuccessful due to heavy seas turning the propeller. A constant watch was kept on the vessel's position. Due to the strong WSW wind causing the vessel to drift towards Fairy Bank and the anticipated change in the current direction, the Master decided to anchor. At 0750 hours the port anchor was let go with the Fairy Bank buoy bearing 105 degrees, at a distance of two miles.
The vessel made contact with a tug steaming from Dunkirk at 11 00 hours. The Master of the tug...
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