JHC Launches International Hull Clauses

The Joint Hull Committee's (JHC) project to produce a new set of hull insurance clauses which is intended to reflect the needs and requirements of today's shipowners and insurers has been completed on time. The new clauses, which have been drafted following extensive consultation with shipowners and other interested parties, will be available for use from November 1 and will be known as the International Hull Clauses. The revised clauses are not a major rewrite of the 1983 and 1995 Institute Time Clauses currently in use. Rather, they have been updated so as to embrace current market practice whilst recognizing and supporting the role of ISM, flag states and classification societies. They also place less emphasis on the use of warranties, instead providing specific explanations of the consequences of any failure to comply with policy conditions. In this way, they reflect developments within the UK legal environment. The revised clauses comprise three distinct yet concurrent sections. The first of these contains the principal insuring conditions, the second a range of additional clauses where these are required by assureds, and the third a set of claims provisions aimed at streamlining and clarifying the claims process for both insurers and shipowners and setting out the rights and responsibilities of both parties in relation to the submission, review and agreement of claims. The opportunity has been taken to reorder the clauses into a more logical sequence than was previously the case. Additional clauses that are frequently offered in today's policies but which did not form part of the previous standard conditions have also been incorporated into standard coverage. Simon Beale, chairman of the Joint Hull Committee, says, "The JHC undertook a widespread consultation procedure during the revision process, giving other interested parties from the maritime community the opportunity to comment and provide input on the format and content of the new wordings. The result is a product which is more user-friendly to the global shipping industry and which further strengthens the position of the London market in the international marine insurance community." The consultation procedure included discussions with shipowning associations, overseas insurers, average adjusters and brokers. It was backed up by a series of drafting committees comprising not only hull underwriters, but also claims representatives from insurers and broking interests, along with a representative from the Average Adjusters Association. Legal issues related to the redrafting were overseen by Tim Taylor and Chris Zavos from Hill Taylor Dickinson in London. The clauses were launched in London on October 31 at a market briefing in Lloyd's Old Library. A panel comprising a number of members of the drafting committees, including Simon Beale of Amlin, and Peter McIntosh from Wellington, who chaired the steering group responsible for overseeing the drafting, provided underwriters, brokers and other invited attendees with an overview of the clauses, and with an opportunity to contribute via a question-and-answer session.

As part of the JHC's commitment to encouraging ongoing, constructive communication with the international shipping and insurance industries, the London briefing is to be followed by a seminar in Athens on November 4 to which prominent brokers and shipowners from the Greek market have been invited. Shortly thereafter, a group will be visiting Hong Kong to provide an overview of the clause revisions to shipowners.