Marine Hull Insurance. Special Risks.

    Lack of employment, necessity for exten- sive repairs, or other unavoidable circumstances may necessitate laying up the vessel in port for long periods of time. Under such conditions the owner may want a so-called " port risk only " policy, the purpose of which is to protect the vessel within the limits of the port during the term arranged for. The insured is given the privilege of transferring the vessel from one dock to another, or of placing it in dry-dock for purposes of effecting proper repairs. Hazards of collision and loss or damage to machinery or boilers, as per the collision and Inchmaree clauses (to be discussed later), are also assumed by the underwriter. Port risk insurance does not include hazards connected with navigation, and the premium is thus comparatively lower. The rates are charged on either a monthly or annual basis, but in the latter case privilege of cancellation will be given, the amount of return premium being a fixed percentage of the annual rate as per the insurance company's published short rate table.

    Vessel owners may also desire, or be obliged, to insure their vessels against " total loss only." At times, however, such policies are made to include general average losses and salvage charges. The practice of insuring against total loss only may be necessary in order to obtain a favorable rate when the inferior condition of the vessel would cause the premium on full coverage insurance to be exceedingly high. Again, sufficient full coverage may be difficult to obtain on vessels of very high value, and accordingly the final lines of insurance are placed on the " total loss only " plan. But in order to protect underwriters issuing full coverage contracts it is usually found necessary to limit the amount of "total loss only" insurance to a stipulated percentage of all the insurance carried.

     It may also happen that vessel owners desire to protect themselves against legal liability for damage to cargo in their custody, or for loss of life or personal injury, owing to negligence attributable to themselves or their agents. Such legal liability is not covered by the ordinary marine insurance policy, yet is of great importance. To protect against this type of claim, mutual protective associations so-called shipowners' clubs have been formed. Associations of this character have existed in Great Britain for many years, and recently one was established under the laws of New York.

Seaworthiness. The implied warranty of seaworthiness has already been discussed from the standpoint of the elements of fitness necessary to make the vessel an insurable risk. But seaworthiness may have a different meaning according to the position or trade in which the vessel finds itself. If lying in port, seaworthiness means that the vessel is in proper condition to move about in the port for purposes of outfitting and loading. When departing on a voyage a different degree of seaworthiness is implied, viz., fitness in all respects to perform the voyage undertaken. If the voyage is subdivided into distinct parts, such as river, lake and ocean, the marine insurance concept of sea- worthiness applies to each portion separately, and the vessel must be in a position to meet fully all the ordinary risks associated with every stage of the voyage. But where the hull policy is of the time variety, the warranty of seaworthiness does not attach, unless the owner knows of the vessel's unseaworthiness and permits the same to continue in spite of opportunity to remove all shortcomings.

As regards a time policy on hulls, it is an old axiom that there is no warranty of seaworthiness in a time policy. This is because in a time policy a vessel is or may be out of the control of the owner at the time the policy may attach, and the owner may be, and frequently is, in entire ignorance of her physical condition at that time.