These Clauses together with the Certificate and any applicable Endorsements set out the terms on which we have agreed to insure you.
The use of italic text in these Clauses indicates that the word or phrase in italics is defined in these Clauses.
The use of bold text in these Clauses indicates an exclusion or limitation of coverage.
DEFINITIONS

The following definitions apply to these Clauses, the Certificate and Endorsements:- Word Meaning

 
Any location specified in Section 5 of your Certificate as an "Alternative Construction Premises" where a Vessel under Construction or parts thereof are to be constructed.
Means buildings and other structures at the Insured Premises in which you have an insurable interest being buildings of brick, stone, concrete or other non-combustible materials unless otherwise stated in your Certificate, landlord's fixtures and fittings in and on such buildings, walls, gates and fences and services (which shall mean telephone, gas and water mains, electrical instruments, meters, piping, cabling and the like), unless Section 2 of your Certificate specifies to the contrary.
Any document issued and signed by us containing the terms and conditions of insurance with us, including any Endorsement evidencing any change in such terms and conditions.
A secure area within the boundary of the Insured Premises entirely surrounded by secure fencing or walls.
The property other than buildings specified in Section 2 of the Certificate, being your property or property in which you have an insurable interest which is located at the Insured Premises, including machinery, plant, fixtures, fittings and other trade equipment, all office equipment and other contents, tenants' improvements, alterations and decorations and in so far as they are not otherwise insured, personal effects of you, your directors, partners, managers and employees.
Alternative Construction Premises
Buildings
Certificate
Compoud Contents
Deductible
The amount specified in each Section of the Certificate for which you are responsible and which is the first amount that will be taken into account in respect of each and every claim (including a claim for an actual or constructive total loss) under this insurance, except a claim under Clauses 4.2, 5.2.6 and 8.1.3. 

Employee

1. any person employed by you or your managers during a Period of  Insurance under any contract of service;

 
2. it includes any of the following persons while working for you in
connection with the Insured Activities-
(a) any labour only sub-contractor or person supplied by him;
(b) any self employed person performing work of a kind ordinarily performed under a contract of service or apprenticeship with you;
(c) any person supplied to you under a contract or agreement the terms of which deem such a person to be in your employment for the duration of such contract or agreement.
(d) any person employed under a contract of service or apprenticeship with another employer and who is hired to or borrowed by you;
(e) any person engaged under a work experience scheme or similar scheme.
Endorsement A document issued and signed by us evidencing an amendment to the terms
and conditions of this insurance, which forms part of your Certificate.
Handling Equipment An item of machinery or apparatus including any part thereof (not being an
aircraft, container, ship or trailer) used in the handling, movement or storage of cargo, containers, trailers and vessels and operations incidental to those activities.
Insured Activities The activities specified in your Certificate and any activities in our opinion
directly related therewith, including:-
(i) the provision and management of catering/canteen, social, sports or welfare organisations for the benefit of your Employees;
(ii) your ambulance, first aid, fire and security services;
(iii) the maintenance, ownership, repair and decoration of Insured Premises.
Insured Event An event which causes loss or damage which is recoverable under this
insurance.
Insured Premises
Insured Value Managers
Marine Installation

The location specified as such in your Certificate, including the Yard and any Alternative Construction Premises.
The value specified in the Certificate for a particular item insured by us.
Any individual and/or company appointed by you to control, administer, manage or operate your business, a part of your business, any Vessel or Vessel under Construction.
Period of Insurance
Provisional Contract Value
Reasonable cost
Seaworthy
Storm
This insurance
Third Party
Any property or structure specified in Section 4 of the Certificate which is used at your Insured Premises in the provision of your Insured Activities for the purpose of protecting harbours or vessels or for berthing or mooring of vessels. It may include, but is not restricted to breakwaters, piers, quays, jetties, pontoons, docks, piles and dolphins whether floating or fixed. It may also include any equipment which forms part of a marine installation provided that such equipment is specified in Section 4 of the Certificate.
The period of time for which you are insured as set out in the Certificate, unless this insurance is terminated earlier in accordance with these Clauses.
The amount set out in Section 5 of the Certificate as such and declared by you to us prior the inception of this insurance as being the provisional final value of the Vessel under Construction as set out in the contract between the Builder and the Owner and, if applicable, the cost of any materials and equipment that the Owner has agreed to supply to the Builder.
The cost which would be paid by a prudent uninsured in the ordinary course of business. It does not include any costs incurred in order to have repairs or any other work effected on an accelerated basis.
Means well maintained, in good repair, adequately manned by competent crew, properly equipped and provisioned and in all respects in a condition to withstand the ordinary perils of the seas.
Means (for the purposes of Section 4 only) adverse or unusual weather and sea conditions which have been caused by winds measuring Force 10 or more on the Beaufort wind scale.
The contract of insurance contained in these Clauses, the Certificate and any Endorsements.
A person other than any employee, named Insured, director, partner, managers or officer of any Insured named in the Certificate. 
Third Party Liability Limit

The Third Party Liability Limit is the amount specified as such in Sections 1, 5 and/or 8 of the Certificate. It shall be our maximum indemnity under any one such Section of this insurance for any one accident or series of accidents arising from the same event. In the event that you are insured for liabilities to third parties under more than one of these Sections, our maximum indemnity for any one accident or series of accidents arising from the same event shall be limited to the amount of the largest Third Party Liability Limit specified in such Sections of your Certificate.

 
Trials Use of the Vessel (or a Vessel under Construction) afloat for the specific and
deliberate purpose of testing the Vessel (or a Vessel under Construction) and/or its equipment prior to delivery by you to the Owners (or by the Builders to the Owners in the case of a Vessel under Construction).
Vessel Means the vessel(s) specified in Section 8 of the Certificate and the gear and
Vessel under Construction
equipment which would normally be sold with her. It may include the additional equipment, accessories, boat(s) and outboard(s) specified in the Certificate. It does not include personal effects, consumable stores, fishing gear or moorings. It also includes any stock-in-trade vessel insured under Section 2 of the Certificate while such vessel is afloat, which shall, while it is afloat be insured under Section 8 of these Clauses.
     Means the Vessel  under Construction (as described by its build number or name in Section 5 of the Certificate) which is the subject matter of insurance under Section 5 of this insurance and which comprises and includes (unless the Certificate expressly states to the contrary) hull and machinery, materials, equipment, outfit, fixtures, components and everything connected with or allocated to all or any of the Vessels under Construction by you as part of your Insured Activities, whether or not any such property has been placed on board, forms part of or is incorporated in or attached to the Vessel under Construction, but it excludes your Insured Premises, any owned or leased land or building or any facility, plant, moulds, plans, tools or equipment owned by you.
Yardi
    The location specified as the Yard in Section 5 of your Certificate where construction of the Vessel under Construction will take place.
We, our, ours, us
                      Refers to the Insurers named in the Certificate.
You, your, yours
                       Refers to the Insured(s) named in the Certificate. 

MARINA İNSURANCE CLAUSES
1 THIRD PARTYLIABILITY
1.1 We will indemnify you, up to the amount of the Third Party Liability Limit, for any sums which you are legally liable to pay and shall pay to Third Parties for any claim for damages or expenses made in consequence of physical loss of or physical damage to property, personal injury or loss of life, provided that the occurrence giving rise to such legal liability occurs during the Period of Insurance and arises from the provision of your Insured Activities, subject to the terms, conditions and exclusions of this insurance.
1.2 Subject to the terms, conditions and exclusions of this insurance we will also indemnify you for the following arising from an accident or occurrence during the Period of Insurance:
1.2.1 the reasonable expenses of the removal of the wreck of the Vessel from any place owned, leased or occupied by you;
1.2.2 legal costs incurred by you in avoiding, minimising or contesting liability (including
proceedings before a fatal accident inquiry held by the authorities) arising out of or in connection with an accident covered by Section 1 of this insurance and not excluded by any provision of this insurance provided that our prior written consent has been obtained (the granting of which is in our sole discretion).
THIRD PARTY LIABILITY EXTENSIONS
We will extend your insurance under Clauses 1.1 and 1.2 above in respect of the following extension(s) provided that Section 1 of the Certificate specifies that you are so insured:
1.3 Products Liability Extension

We will indemnify you for legal liabilities incurred to Third Parties as a result of defective goods or products sold or supplied by you in the course of providing the Insured Activities.
1.4 Marina Operator's Liability Extension
We will indemnify you for legal liabilities incurred to Third Parties as a result of your activities as a marina operator including but not limited to the following: the storage, mooring, berthing, lifting, launching or fuelling of vessels while in your care, custody or control at the Insured Premises.
1.5 Boat Repairer's Liability Extension
We will indemnify you for legal liabilities incurred to Third Parties as a result of your activities as a boat repairer which includes physical loss of or damage to any vessel belonging to a Third Party:-
1.5.1 which is in your care, custody or control at the Insured Premises for the purpose of being
worked upon by you or your subcontractors. This cover will also apply to such vessels being shifted or moved by you or your competent Employee within the limits of the port at which the work is being carried out, including trials but not exceeding 100 miles from such port; or
1.5.2 upon which you or your subcontractors are working, except vessels which are both afloat and underway unless while on trials. 

1.6 Pollution Liability Extension
1.6.1 We will indemnify you for legal liabilities incurred to Third Parties by reason of pollution or contamination but only where all of the following conditions are shown by you to have been met :
1.6.1.1 the pollution or contamination was caused by an event;
1.6.1.2 the event first commenced on an identified specific date during the Period of İnsurance;
1.6.1.3 the event was first discovered by you within 72 hours of such first commencement;
1.6.1.4 written notification of the event was first received from you by us within 90 days of your first discovery of the event;
1.6.1.5 the event was neither expected nor intended by you; and
1.6.1.6 the event did not result from your intentional violation of any statute, rule, ordinance or regulation.
1.6.2 But in no case shall this insurance cover any actual or alleged legal liability:
1.6.2.1 for the failure to evaluate, monitor, control, remove, nullify and/or clean-up seeping, polluting or contaminating substances to the extent that such liability arises solely from any obligations imposed by any statute, rule, ordinance, regulation or imposed by contract;
1.6.2.2 for the failure to abate or investigate any threat of seepage onto or pollution or contamination of the property of a Third Party;
1.6.2.3 for seepage pollution or contamination of property which is or was, at any time, owned, rented or occupied by you, or which is or was, at any time, in your care, custody or control (including the soil, minerals, water or any other substance on, in or under such owned, leased, rented or occupied property or property in such care, custody or control);
1.6.2.4 arising out of the handling, processing, treatment, storage, disposal or dumping of any waste materials or substances, or arising out of such waste materials during transportation;
1.7 Exclusions relating to Section 1
Section 1 does not cover you for any legal liability, cost, expense or claim:
1.7.1 that is excluded under Section 9 (General Exclusions) of this insurance;
1.7.2 arising from the dumping of spoil;
1.7.3 in respect of your management or operation of any aircraft, hovercraft, helicopter,
seaplane or any other airborne craft or any air strip, area or building upon which such

craft land or manoeuvre or in which they are housed, maintained or repaired; 

1.7.4 in respect of the use of any power operated lifting equipment, cranes, travel hoists and similar equipment unless it is specified in Section 1 of the Certificate;
1.7.5 in respect of the management, navigation or operation of any vessel or craft on the water in which you have an interest as owner, charterer or managers or in respect of any act, omission, event or accident which might otherwise be the subject of insurance under Section 5 (Vessels under Construction) or Section 8 (Vessels), but this Clause 1.7.5 shall not prevent you claiming under these Sections 5 and 8 where you have such insurance cover;
1.7.6 in connection with any salvage operation;
1.7.7 in respect of the ownership or operation of any vehicle which is required by law to be licensed for use on any road;
1.7.8 for any costs of replacing, recalling, making good, repairing or reinstating goods or products sold or supplied or repairs or workmanship undertaken by you or your subcontractors;
1.7.9 arising under a penalty clause or contractual clause of any agreement entered into by you relating to payments under penalty clauses, detention, demurrage, loss of time, loss of freight, loss of charter, loss of market or any other consequential loss;
1.7.10 which you incur which falls within the scope of the insurance provided for under Section 1.3 (Products Liability Extension), Section 1.4 (Marina Operator's Liability Extension) or Section 1.5 (Boat Repairer's Liability Extension), unless Section 1 of the Certificate specifies that you are insured under such Section;
1.7.11 which you incur which results from pollution or contamination, unless Section 1 of the Certificate specifies that you are insured under Section 1.6 (Pollution Liability Extension) in which case you will be insured in accordance with the provisions of Section 1.6.
2 BUILDINGS & CONTENTS
2.1 You are insured against physical loss of or physical damage to the buildings and contents specified in Section 2 of the Certificate if they are accidentally lost, stolen, destroyed or damaged during the Period of Insurance other than by an excluded cause.
2.2 Excluded Property under Section 2
You are not insured under this Section 2 against loss of or damage to any of the following EXCLUDED PROPERTY:-
2.2.1 property in transit, vessels afloat, goods held in trust or on commission, documents, business books, computer systems, records, patterns, models, moulds, plans, designs or explosives, rent payable and rent receivable, unless Section 2 of the Certificate specifies that such item of property is insured by us;
2.2.2 vehicles required by law to be licensed for road use (including accessories thereon), caravans, trailers, railway locomotives, rolling stock, aircraft or airborne craft of any description;
2.2.3 property or structures in the course of construction or erection and materials or supplies in connection with such property; 
  
2.2.4 land, roads, pavements, piers, quays, jetties, pontoons, bridges, culverts or excavations;
2.2.5 livestock, growing crops or trees;
2.2.6 the costs of reinstating computer data, unless daily backup data has been safely stored at a separate location at least 15 kilometres away.
2.3 Excluded Causes Under Section 2
You are not insured under this Section 2 against loss or damage caused by any of the following EXCLUDED CAUSES:-
2.3.1 any cause excluded under Section 9 (General Exclusions) of these Clauses;
2.3.2 faulty or defective design, materials or workmanship, inherent vice, latent defect or frost;
2.3.3 theft, malicious damage or any attempted theft of or attempted malicious damage to property unless such property is contained in a securely locked building or compound and there are visible signs of forcible and violent entry to or exit from such building or compound;
2.3.4 disappearance, unexplained or inventory shortage, misfiling or misplacing of information;
2.3.5 explosion occasioned by the bursting of a boiler (not being a boiler used for domestic purposes only), economiser or other vessel, machine or apparatus in which internal pressure is due to steam only and which belongs to you or is under your control;
2.3.6 cracking, fracturing, collapse or overheating of boilers, economisers, vessels, tubes or pipes, nipple leakage and/or the failure of welds of boilers;
2.3.7 bursting, overflowing, discharging or leaking of water tanks, apparatus or pipes in buildings which are empty or disused;
2.3.8 the collapse or cracking of buildings, normal settlement or bedding down of new structures;
2.3.9 wind, rain, sleet, snow, flood or dust causing loss or damage to moveable property in the open or to fences or gates.
3 TRAVEL HOISTS, LIFTING AND HANDLING EQUIPMENT
3.1 You are insured against physical loss of or damage to the travel hoists, lifting and handling equipment as specified in Section 3 of the Certificate and used in the provision of your Insured Activities caused during the Period of Insurance and which arises from any accidental cause, theft, or the negligent or malicious act of any person provided that such negligent or malicious act and the loss or damage resulting therefrom shall both occur during the Period of Insurance, subject to the terms, conditions and exclusions of this insurance.
3.2 Subject to the terms, conditions and exclusions of this insurance you are also insured against your liability for daily lease charges in respect of a travel hoist or an item of lifting or handling 

equipment leased to you where such charges are incurred by you in consequence of an Insured Event which:
3.2.1 by rendering the item an actual or constructive total loss, prevents its redelivery to the lessor by the original intended redelivery date; or
3.2.2 by reason of your obligation to effect repairs, delays such redelivery,
provided that our limit of liability for claims under Clause 3.2 is the amount of daily lease charges incurred by you in respect of the lost or damaged leased item for a maximum of 30 days from and including the original intended redelivery date.
3.3 Exclusions relating to Section 3
You are not insured under this Section 3 against loss, damage, expenditure or claim;
3.3.1 that is excluded under Section 9 (General Exclusions) of these Clauses;
3.3.2 for the cost of remedying or repairing defects in design or manufacture;
3.3.3 in respect of an expendable, consumable or replaceable part unless the cause of such loss or damage was independent of such part
3.3.4 arising from experiments or overload or similar tests requiring the imposition of abnormal conditions unless carried out to comply with statutory regulations;
3.3.5 arising from the execution of any modification, unless previously approved of in writing by the manufacturer;
3.3.6 arising from erection, dismantling or re-erection of the travel hoist or item of lifting or handling equipment other than in the course of inspection, maintenance or repair;
3.3.7 arising from mysterious disappearance, unexplained loss or loss upon taking inventory of spare parts, accessories or plant, tools or materials for maintenance or repair of a travel hoist, an item of lifting or handling equipment;
3.3.8 arising from destruction or damage by or under the order of any governmental or local authority.
4 PIERS AND PONTOONS ETC
4.1 You are insured against physical loss of or damage to the Marine Installations up to the specified limits of their Insured Value as set out in Section 4 of the Certificate caused by any of the following perils during the Period of Insurance, subject to the terms, conditions and exclusions of this insurance:-
4.1.1 storm;
4.1.2 flood;
4.1.3 fire or lightning;
4.1.4 collision with or impact by any vessel, vehicle, railway locomotive, aircraft or anything dropped therefrom;
4.1.5 explosion;

                                    9 

4.1.6 earthquake or volcanic eruption;
4.1.7 accidents in loading, discharging or moving stores, gear, equipment, machinery or fuel at the Insured Premises;
4.1.8 malicious acts;
provided such loss or damage has not resulted from the want of due diligence by you or your managers.
4.2 Subject to the terms, conditions and exclusions of this insurance and in addition to the insurance under Clause 4.1 above, you are also insured up to a limit of £5,000 (five thousand Pounds Sterling) (or the equivalent amount in another currency) against the fair and reasonable costs and expenses, incurred in cleaning the Marine Installations specified in Section 4 of the Certificate, which have been affected by the accidental spillage of, or contamination or pollution by oil and fuel arising from any one accident or a series of accidents arising from the same event, without application of the deductible specified in Section 4 of the Certificate, provided that such a spillage, contamination or pollution has not resulted from the want of due diligence by you or your managers.
The exclusions pertaining to contamination, change in colour, flavour, texture or finish in Clause 9.2.1 shall not apply to this Clause 4.2.
4.3 Exclusions relating to Section 4
You are not insured under this Section 4 for any loss, damage, expenditure or claim:
4.3.1 that is excluded under Section 9 (General Exclusions) of these Clauses;
4.3.2 arising from inherent vice or latent defect;
4.3.3 arising from ice damage, frost, freezing or thawing;
4.3.4 in respect of any insured Marine Installation in the course of construction, erection, dismantling or re-erection other than in the course of inspection, maintenance, repair or removal to another working position in the port, marina, terminal or depot where the Marine Installation is located;
4.3.5 in respect of remedying a fault in design, materials, manufacture or construction or any cost or expense incurred by reason of betterment or alteration in design or construction. 
?

5
5.1
VESSELS UNDER CONSTRUCTION
You are insured against all risks of physical loss of or damage to the Vessel under Construction
caused and discovered during the Period of Insurance, arising from any accidental cause, theft or the
negligent or malicious act of any person provided that such negligent or malicious act and the
loss or damage resulting therefrom both occur during the Period of Insurance, subject always
 to the terms, conditions and exclusions of this insurance.

 
5.2 Subject to those terms, conditions and exclusions this insurance also covers:
5.2.1 the cost of repairing, replacing or renewing any defective part condemned solely in consequence of discovery therein during the Period of Insurance of a latent defect. In no case shall this insurance cover the cost of renewing faulty welds.
5.2.2 physical loss of or damage to the Vessel under Construction caused and discovered during the Period of Insurance arising from faulty design of any part or parts of the Vessel under Construction, but in no case shall this insurance extend to cover the cost of repairing, replacing or renewing such part or parts nor any cost or expense incurred by reason of betterment or alteration in design;
5.2.3 physical loss of or damage to the Vessel under Construction caused by any governmental authority acting under the powers vested in it to prevent or mitigate a pollution hazard, or threat thereof, resulting directly from damage to the Vessel under Construction which is recoverable under this insurance, provided that such governmental action or such hazard or threat does not result from your or your managers' want of due diligence;
5.2.4 in the case of the failure of a launching operation of the Vessel under Construction, all subsequent costs of completing the launching operation;
5.2.5 the reasonable cost of salvage of the Vessel under Construction properly and reasonably incurred by you in preventing a loss which may be recoverable under this insurance;
5.2.6 the cost of inspecting the bottom of the Vessel under Construction after a grounding, if reasonably incurred specially for that purpose, even if no damage is found.
5.3 Third Party Liability
5.3.1 We will indemnify you for any sums which you are legally liable, as owner of the Vessel under Construction, to pay and shall pay to a third party for any claim for damages or expenses where such liability is in consequence of physical loss of or damage to property or personal injury or loss of life provided that the accident giving rise to such legal liability and the physical loss of or damage to property or personal injury or loss of life both occur during the Period of Insurance, subject always to the terms, conditions and exclusions of this insurance.
5.3.2 Subject to the terms, conditions and exclusions of this insurance we will also indemnify you for the following arising from an accident during the Period of Insurance:
5.3.2.1 the reasonable expenses of the removal of the wreck of the Vessel under Construction from any place owned, leased or occupied by you;

5.3.2.2 legal costs incurred by you in avoiding, minimising or contesting liability (including proceedings before a fatal accident inquiry held by the authorities) arising out of or in connection with an accident covered by Section 5.3 of this insurance and not excluded by any provision of this insurance provided that our prior written consent has been obtained (the granting of which is in our sole discretion).
5.4 Section 5.3 does not cover you for any liability, cost, expense or claim:
5.4.1 that is excluded under Clause 5.8 and/or Section 9 of this insurance;
5.4.2 for cash, negotiable instruments, precious metals or stones, jewellery, valuables, objects of a rare or precious nature or personal effects on board the Vessel under Construction;
5.4.3 for property which is onboard the Vessel under Construction, owned or leased by you or your subcontractors, or for which you or they are responsible;
5.4.4 arising in respect of pollution or contamination of any real or personal property or thing whatsoever.
5.5 Where you or we may or could have limited liability, the indemnity under Section 5.3 in respect of such liability shall not exceed our proportionate part of the amount of such limitation.
5.6 Our maximum indemnity under Section 5.3 of this insurance for any one accident or a series of accidents arising from the same event shall be the Third Party Liability Limit.
5.7 In the event that more than one company and/or individual is specified as an Insured in the Certificate, our maximum liability under Section 5.3 of this insurance for Third Party Liability for each accident or series of accidents arising from the same event that may be recovered under this insurance shall not exceed the Third Party Liability Limit.
5.8 Exclusions relating to Section 5
You are not insured under Section 5 for any loss, damage, liability, expense or claim:
5.8.1 excluded under Section 9 (General Exclusions) of these Clauses;
5.8.2 arising from an earthquake or volcanic eruption.
5.9 Termination of This Insurance
This insurance shall terminate upon earliest of the following:-
5.9.1 the expiry of or termination of the Period of Insurance;
5.9.2 upon delivery by the Builder of the Vessel under Construction to the Owner and acceptance thereof by the Owner; or

5.9.3 cancellation of this insurance by us under Clause 10.17. 

5.10 Geographical Limits And Use
5.10.1 The Vessel under Construction is only covered while ashore at the yard, the alternative construction premises, in transit between such locations or at the port where the Vessel under Construction is launched. Any other transit will only be covered if you have obtained our prior written approval and you have agreed to pay any additional premium we may require.
5.10.2 The Vessel under Construction is only covered while afloat at the yard, the alternative construction premises or at the port where the Vessel under Construction is launched with leave to navigate under her own power within a distance by water of 250 nautical miles of such locations for the purpose of fitting out, mooring, trials or delivery.
5.10.3 Any movement of the Vessel under Construction in tow outside of the yard, the alternative construction premises or the port where the Vessel under Construction is launched will only be covered if you have obtained our prior written approval and you have agreed to pay any additional premium we may require.
5.10.4 The Vessel under Construction shall not be used afloat for any purposes other than fitting out, mooring, trials or delivery within a distance by water of 250 nautical miles of the port where the Vessel under Construction is launched unless you have obtained our prior written approval.
5.10.5 The Vessel under Construction is only covered while she is underway when she is properly manned and under the control of a competent skipper, having due regard to all circumstances.
5.11 Declaration of Building Cost
5.11.1 Unless Section 5 of your Certificate specifies to the contrary, at the end of every month during the Period of Insurance you must send us a written Declaration of Building Cost signed and dated by you.
5.11.2 The Declaration of Building Cost must specify, as at the date of signature thereof, the total amount of the cost of labour and materials charged by the Builder to the Owner as well as the cost of any equipment allocated to the Vessel under Construction by you.
5.11.3 If we also require, you must provide us with records detailing the charges and expenditure in support of any Declaration of Building Cost submitted to us by you.
5.11.4 In the event that the total amount specified in a Declaration of Building Cost exceeds the Provisional Contract Value, we will hold you covered on the amount specified in such Declaration of Building Cost, provided that you pay us any additional premium we may require.
5.12 Amount Recoverable
5.12.1 The maximum amount of our total liability under Sections 5.1 and/or 5.2 of this insurance for any one accident or series of accidents arising from the same event, shall be the reasonable cost of repairs necessary to re-instate the Vessel under Construction to its pre-accident condition, but not exceeding under any circumstances the lesser of the following:-
5.12.1.1 the actual re-building cost of the Vessel under Construction at the date of the accident; 

5.12.1.2 the total of the amount of the building costs stated in the last Declaration of Building Costs submitted to us by you prior to the incident giving rise to the loss or damage to the Vessel under Construction, plus 10% of such declared value of building costs; or
5.12.1.3 the replacement cost of the Vessel under Construction at the date of the accident, provided that if the Provisional Contract Value specified on the Certificate is less than what the final value would have been upon completion, then the amount we will pay you will be reduced proportionately.
5.12.2 Our maximum indemnity under Section 5.3 of this insurance for any one accident or a series of accidents arising from the same event shall be the Third Party Liability Limit stated in Section 5 of the Certificate.
5.12.3 In the event that more than one company and/or individual is specified as the Insured in the Certificate, our maximum liability under Section 5 of this insurance for Third Party Liability for each accident or series of accidents arising from the same event that may be recovered under this insurance shall not exceed the Third Party Liability Limit stated in Section 5 of the Certificate.
6 BUSINESS INTERRUPTION COVER
6.1 Subject to the terms, conditions and exclusions of this insurance you are insured up to the
Limit of Liability specified in Section 6 of the Certificate against loss of Gross Profit incurred by you as a result of the interruption of or interference to your Insured Activities, due to :-
6.1.1 Reduction in Turnover; and
6.1.2 Increase in Cost of Working Provided that :-
i) such interruption or interference arises as a result of physical loss or physical damage to property (hereinafter referred to as Damage) at your Insured Premises;
ii) at the time of the Damage, we insure your property at the Insured Premises and such Damage is recoverable under a Section number specified in Section 6 of the Certificate;
iii) payment for such Damage shall have been made by us or admitted in writing by us to be due and payable;
6.2 The amount payable as indemnity shall be:-
6.2.1 in respect of Reduction in Turnover: the sum produced by applying the Rate of Gross Profit to the amount by which the Turnover during the Indemnity Period shall fall short of the Standard Turnover in consequence of the Damage,
6.2.2 in respect of Increase in Cost of Working: the additional expenditure (subject to the
provisions of the Uninsured Standing Charges Clause) necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in Turnover, which but for that expenditure would have occurred during the Indemnity Period in consequence of the Damage, but not exceeding the sum produced by applying the Rate of Gross Profit to the amount of the reduction thereby avoided, 

less, in each case, any sum saved during the Indemnity Period in respect of such of the charges and expenses of your business payable out of Gross Profit as may cease or be reduced in consequence of the Damage,

 
Underinsurance
If the sum insured under Section 6 be less than the sum produced by applying the Rate of Gross Profit to the Annual Turnover (or to a proportionately increased multiple thereof where the Maximum Indemnity Period exceeds twelve months) the amount payable shall be proportionately reduced.
6.4 Definitions Solely for the Purposes of this Section 6
6.4.1 Indemnity Period
The period beginning with the occurrence of the Damage and ending not later than the Maximum Indemnity Period thereafter during which the results of the Business are affected in consequence of the Damage.
6.4.2 Maximum Indemnity Period
As specified in Section 6 of the Certificate.
6.4.3 Turnover
The money paid or payable to you for goods sold and delivered and for services rendered in course of the provision of the Insured Activities at the Insured Premises.
6.4.4 Gross Profit
The amount by which:-
(i) the sum of the amount of the Turnover and the amounts of the closing stock and work in progress shall exceed
(ii) the sum of the amounts of the opening stock and work in progress and the amount of the uninsured working expenses.
6.4.5 Estimated Gross Profit
The amount specified in Section 6 of the Certificate, which is the amount declared by you to us as representing not less than the Gross Profit which it is anticipated will be earned by you in providing the Insured Activities during the financial year most nearly concurrent with the Period of Insurance or a proportionately increased multiple thereof where the Maximum Indemnity Period exceeds twelve months.
Note: The amounts of the opening and closing stocks and work in progress shall be arrived at in accordance with your normal accountancy methods, due provision being made for depreciation.
6.3
Note: The words and expression used in this definition shall have the meaning usually attached to them in your books and accounts. 

6.4.6 (i) Rate of Gross Profit
The Rate of Gross Profit earned on the Turnover during the financial year immediately before the date of the Damage.
(ii) Standard Turnover
The turnover during that period in the twelve months immediately before the date of the Damage which corresponds with the Indemnity Period.
Adjustments shall be made by us to the Rate of Gross Profit and Standard Turnover as may be necessary to provide for the trend of the Insured Activities and for variations in or other circumstances affecting the Insured Activities either before or after the Damage or which would have affected the Insured Activities had the Damage not occurred so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during the relative period after the Damage.
Note 1: To the extent that you are accountable to the tax authorities for the Value Added Tax
(or the equivalent tax) all terms in this Section 6 shall be exclusive of such tax.
Note 2: For the purpose of these definitions any adjustment implemented in current cost
accounting shall be disregarded.
6.5 Alternative Trading
If during the Indemnity Period, the Insured Activities shall be rendered elsewhere than at the Insured Premises for your benefit either by you or by others on your behalf, the money paid or payable in respect of such services shall be brought into account in arriving at the Turnover during the Indemnity Period.
6.6 Limit of Liability
Our liability under this Section 6 shall not exceed the Estimated Gross Profit as specified in Section 6 of the Certificate at the time of the Damage.
6.7 Professional Accountants
Any particulars or details contained in your books of account or other business books or documents which may be required by us for the purpose of investigating or verifying any claim under this Section 6 may be produced by professional accountants if at the time they are regularly acting as such for you and their report shall be a prima facie evidence of the particulars and details to which such report relates.
We will pay the reasonable charges payable by you to your professional accountants for producing such particulars or details provided that the sum of the amount payable under this Section 6.7 and the amount otherwise payable under this Section 6 shall in no case exceed the Limit of Liability specified on the Certificate.
6.8 Payments On Account
The decision to make payments on account to you during the Indemnity Period rests solely with us. 

6.9 Exclusions relating to Section 6
This Section 6 does not insure you against business interruption :-
6.9.1 that is excluded under Section 9 (General Exclusions) of these Clauses;
6.9.2 if you are subject to any provisional or final order relating to bankruptcy, receivership, liquidation or you enter a composition with your creditors or your business providing the Insured Activities is discontinued at any time after the commencement of this insurance, unless specified to the contrary in Section 6 of the Certificate;
6.9.3 from loss due to theft of property.
7 STRIKES, RIOTS AND TERRORISM
7.1 Subject to the terms, conditions and exclusions of this insurance, you are insured up to the amounts as set out in Sections 2, 3, 4, 5, 6 & 8 of the Certificate for any physical loss of or damage to the property insured under these Sections caused by the following:
7.1.1 strikers, locked out workmen, or persons taking part in labour disputes, riots or civil commotions;
7.1.2 any terrorist or any person acting from a political motive subject always to any Terrorism Exclusion Endorsement attached to your Certificate.
7.2 We may terminate the insurance under this Section 7 by giving you 7 days notice, termination will take effect at midnight Greenwich Mean Time of the seventh day after that on which such notice is issued.
Note : The notice takes effect 7 days from the date of its issue, not from the date of its receipt.
7.3 Exclusions relating to Section 7
You are not insured under this Section 7 for any loss, damage, expense or claim:
7.3.1 that is excluded under Section 9 of these Clauses;
7.3.2 arising from the absence, shortage or withholding of any description whatsoever resulting from any strike, lockout, labour disturbance, riot or civil commotion;
7.3.3 arising from the loss or frustration of any voyage or contract for sale or other adventure;
7.3.4 arising from confiscation, expropriation, requisition or pre-emption;
7.3.5 arising from war, civil war, revolution, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power. 

8 VESSELS
8.1 Physical Damage
8.1.1 You are insured against all risks of physical loss of or damage to the Vessel caused during the Period of Insurance by any accidental cause, theft, latent defect in the Vessel (but excluding the costs and expense of repairing or replacing the defective part) or the negligent or malicious act of any person provided that such negligent or malicious act and the loss or damage arising therefrom both occur during the Period of Insurance, subject always to the terms, conditions and exclusions of this insurance.
Subject to those terms, conditions and exclusions this insurance also covers:
8.1.2 Pollution Hazard
Physical loss of or damage to the Vessel caused by any governmental authority acting under the powers vested in it to prevent or mitigate a pollution hazard, or threat thereof, resulting directly from damage to the Vessel which is recoverable under this insurance, provided that such governmental action or such hazard or threat does not result from your or your managers' want of due diligence.
8.1.3 Inspection after Grounding
The reasonable cost of inspecting the bottom of the Vessel after a grounding, if reasonably incurred specifically for that purpose, even if no damage is found.
8.1.4 Salvage
The reasonable cost of salvage of the Vessel which is properly and reasonably incurred by you in preventing or minimising a loss which may be recoverable under this insurance.
8.1.5 Transit Extension
We will extend your insurance in respect of this extension where Section 8 of the Certificate
specifies that you are so insured:
8.1.5.1 You are insured for physical loss of or damage to the Vessel caused by an insured event in terms of Clause 8.1.1 and 8.1.2 above while the Vessel is in transit by road, rail, car ferry or air on journeys which start and finish on land immediately next to the Navigation Limits set out in Section 8 of the Certificate and during loading and unloading of the Vessel from the conveyance.
8.1.5.2 We will not pay claims in respect of scratching, bruising and/or denting arising during transit covered by this Clause 8.1.5 or for any liability to any third party, howsoever arising.

8.1.5.3 If the Vessefs length overall is 10 metres or more, this insurance is restricted to inland transits by road not exceeding 20 kilometres and every transit (including loading or unloading) shall be conducted by a professional haulier failing which no claim will be payable for loss or damage in transit. 

8.2 Third Party Liability
8.2.1 We will indemnify you for any sums which you are legally liable, by reason of ownership of
the Vessel, to pay and shall pay to third parties for any claim for damages or expenses where such liability is in consequence of physical loss of or damage to property or personal injury or loss of life provided that the accident giving rise to such legal liability occurs during the Period of Insurance, subject always to the terms, conditions and exclusions of this insurance.
8.2.2 Subject to those terms, conditions and exclusions we will also indemnify you for the
following:
8.2.2.1 Wreck Removal and Disposal
The reasonable expenses of the removal of the wreck of the Vessel from any place from which you become legally obliged to remove her and the reasonable cost of disposing of the wreck;
8.2.2.2 Legal Costs
Legal costs incurred by you in avoiding, minimising or contesting liability (including proceedings before a fatal accident inquiry held by the authorities) arising out of or in connection with an accident covered by Section 8.2 of this insurance and not excluded by any provision of this insurance provided that our prior written consent has been obtained (the granting of which is in our sole discretion).
8.2.3 The protection of this Section 8.2 shall, subject to the terms, conditions, warranties and exclusions of this insurance, extend to anyone in control of the Vessel with your prior permission other than a person operating or employed by the operator of any boat yard, repair facility, marina, yacht club, slipway, sales agency, delivery business or similar organisation.
8.2.4 Section 8.2 does not cover you for:-
8.2.4.1 any liability or claim excluded under Clause 8.3 or Section 9 of this insurance;
8.2.4.2 any liability to you or any person afforded the protection of this Section 8.2;
8.2.4.3 for legal liability incurred to any third party while the Vessel is being towed or transported on land;
8.2.4.4 any legal liability incurred to any person engaged in water-skiing, bare-foot skiing, aqua-planing, parascending, hydro-planing or any similar activity while they are under tow of the Vessel or preparing or intended to be, nor for legal liability incurred by any person engaged outside the Vessel in any of these activities;
8.2.4.5 legal liability incurred to or by any person engaged in scuba diving from the Vessel.
8.2.5 Our maximum indemnity under Section 8.2 of this insurance for any one accident or a series of accidents arising from the same event shall be the Third Party Liability Limit specified in Section 8 of the Certificate. 

8.2.6 In the event that more than one individual and/or company is specified as the Insured in the Certificate, our maximum liability under Section 8.2 of this insurance for Third Party Liability for each accident or series of accidents arising from the same event that may be recovered under this insurance shall not exceed the Third Party Liability Limit specified in Section 8 of the Certificate.
8.3 Exclusions relating to Section 8
You are not insured in respect of any claim in respect of:-
8.3.1 that is excluded under Section 9 (General Exclusions) of these Clauses;
8.3.2 loss or damage resulting from frost, unless all reasonable precautions have been taken;
8.3.3 the cost of remedying a fault or error in design or construction or any cost incurred by reason of betterment or alteration in design or construction;
8.3.4 the cost of making good any defect resulting from any repair, alteration or maintenance work carried out on the Vessel;
8.3.5 loss or damage caused by the failure of or degradation to the gelcoat, barrier coating or hull sheathing;
8.3.6 loss of or damage to protective covers or to sails split by the wind or blown away;
8.3.7 loss of or damage to sails, masts, spars or standing and running rigging or anything attached thereto while the Vessel is racing;
8.3.8 loss of or damage to engines, gear boxes, machinery and electrical equipment and installations caused by:-
8.3.8.1 latent defects in the Vessel or breakage of shafts;
8.3.8.2 the negligence of any person whatsoever;
8.3.8.3 heavy weather unless the loss or damage is caused by the Vessel being immersed. (This Clause 8.3.8.3 shall not exclude loss or damage caused by the Vessel being stranded or in collision or in contact with another vessel, pier or jetty).
8.3.9 theft or unauthorised removal or appropriation of the Vessel by anyone who has control of the Vessel with your permission other than your permanent professional skipper or crew;
8.3.10 theft of any outboard unless it is secured to the Vessel by an appropriate anti-theft device in addition to its normal operating mounting and there are visible signs of violent forcible removal, or it is stolen from a locked cabin or locked storage compartment following violent forcible entry into the Vessel or place of storage;
8.3.11 theft of any of the Vessel's gear or equipment unless following violent forcible entry into a locked cabin or locked storage compartment, on board or ashore;
8.3.12 theft or loss of any boat or tender to the Vessel unless permanently marked with the Vessel's name or registration number; 

IN ADDITION WHERE THE MAXIMUM DESIGNED OR ACTUAL MAXIMUM SPEED OF THE VESSEL OR ITS BOAT(S) UNDER ENGINE POWER EXCEEDS 17 KNOTS (20 M.P.H.) no claims shall be allowed in respect of :
8.3.13 loss, damage, liability or expense arising from the Vessel or boat(s) being stranded, sunk, swamped, immersed or breaking adrift while left moored or anchored unattended off a beach or shore;
8.3.14 loss, damage, liability or expense while the Vessel or boat(s) is, with your or your managers' knowledge, under the control of anyone under the influence of drink or drugs;
8.3.15 loss, damage, liability or expense arising while the Vessel or boat(s) is taking part in racing, speed tests or any trials in connection therewith;
8.3.16 loss or damage to any rudder, strut, outdrive, shaft or propeller unless caused by contact with another vessel, a pier or jetty or unless the Vessel or boat(s) is sunk or immersed in circumstances not excluded under Clause 8.3.13;
8.3.17 loss, damage or liability or expense caused by or arising through fire or explosion on board the Vessel or boat(s) if it has an engine room or engine space, unless the engine room or engine space is fitted with a fire extinguishing system which operates automatically or has controls at the steering position or outside and adjacent to the engine room or engine space and the galley is equipped with adequate fire extinguishing apparatus and such fire extinguishing system(s) and apparatus are properly installed and maintained in efficient working order and regularly serviced in accordance with the manufacturer's recommendations.
8.4 Navigation and Use
8.4.1 The Vessel is covered while within the Navigation Limits specified in Section 8 of the Certificate while anchored, moored or navigating, including while aground at her customary berth, at a place of storage ashore, including lifting out and launching, while being moved within a shipyard or marina, while being dismantled, fitted out, refitted, overhauled, undergoing normal maintenance or survey, but not while being used as a houseboat or undergoing major repair or alteration. Subject to the exclusions in Clause 8.3, the Vessefs gear and equipment are covered whether on board the Vessel or not, while in transit to and from place of storage ashore and while in storage ashore.
8.4.2 The Vessel is only covered while she is underway when she is properly manned and under the control of a competent skipper, having due regard to all circumstances.
8.5 Amount Recoverable
8.5.1 The Insured Value of the Vessel specified in Section 8.1 the Certificate will be the maximum amount of our liability under Section 8.1 of this insurance.
8.5.2 If as a result of an insured event the Vessel is totally lost (an Actual Total Loss) or is so badly damaged that the reasonable cost of repairing the Vessel would exceed its Insured Value (a Constructive Total Loss), we will, after taking into account the deductible, either pay you the Insured Value or, at our option, replace her with a vessel of similar type and in equivalent condition.
 

8.5.3 In any other case where the Vessel is damaged as a result of an insured event we will pay the reasonable cost of repairing the Vessel, or at our option, replace any individual item lost or damaged with an item similar type and in equivalent condition.
8.5.4 We may, at our discretion, make a deduction (in addition to applying the deductible) for all claims for loss or damage to sails, protective covers, standing or running rigging or outboard motors not exceeding one third of the cost of repair or replacement.
8.5.5 Our maximum indemnity under Section 8.2 of this insurance for any one accident or a series of accidents arising from the same event shall be the Third Party Liability Limit specified in Section 8 of the Certificate.
8.5.6 In the event that more than one company and/or individual is specified as an Insured in the Certificate, our maximum liability under Section 8.2 of this insurance for Third Party Liability for each accident or series of accidents arising from the same event that may be recovered under this insurance shall not exceed the Third Party Liability Limit specified in Section 8 of the Certificate.
9. GENERAL EXCLUSIONS
9.1 Exclusions relating to all Third Party Liability Sections of This Insurance
You are not insured for any liability, expense or claim:
9.1.1 in respect of any direct or indirect payment by you under workmen's compensation or employers' liability acts or any other statutory or common law, general maritime law or any other liability whatsoever in respect of accidents to or illness of workmen, employees or any other persons employed in any capacity whatsoever by you or others in, on, about or in connection with your business, any Vessel or Vessel under Construction, her equipment, her cargo, materials or repairs;
9.1.2 assumed by you by agreement expressed or implied in respect of death, illness or injury to any person employed under a contract of service or apprenticeship by the other party to such agreement;
9.1.3 arising solely under the terms of an indemnity or contract entered into by you or your managers;
9.1.4 in respect of any accident during the Period of Insurance which might give rise to an indemnity under Sections 1, 5.3 and/or 8.2 of this insurance which is not reported to us in writing within 60 months following the termination of the Period of Insurance. (Note: This exclusion does not relieve you of your obligation to notify us in terms of Clause 10.14);
9.1.5 in respect of any fines, penalties, punitive damages or exemplary damages, however described;
9.1.6 arising from your survey, design and/or consultancy work;
9.1.7 in respect of any liability admitted or agreed without our written consent. 
9.2 Exclusions relating to all Physical Damage Sections of This Insurance
You are not insured for any loss, damage, expenditure, or claim:
9.2.1 arising from corrosion, rust, change in temperature, mechanical or electrical breakdown or derangement of machinery or equipment and after gradual deterioration dampness, dryness, wet or dry rot, shrinkage, evaporation, loss of weight, contamination, change in colour, flavour, texture or finish, vermin, insects, marring or scratching;
9.2.2 in respect of subsidence, landslip or heave;
9.2.3 caused by wear and tear, lack of reasonable maintenance, erosion or gradual deterioration;
9.2.4 caused by or contributed to directly or indirectly by the presence of magnetic flux, or any loss of magnetism (except caused by lightning) or loss of or damage to data carrying media.
9.3 Exclusions relating to all Sections of This Insurance
You are not insured for any loss, damage, liability, expense or claim:
9.3.1 intentionally, recklessly caused by or incurred with the consent of you or your managers or arising from your or your managers' failure to take reasonable precautions to prevent accidents which may give rise to a claim under this insurance;
9.3.2 caused directly or indirectly by your being involved in any illegal trade or venture;
9.3.3 arising from circumstances where you or your managers have waived or restricted your rights of recourse against any person, unless previously agreed in writing by us;
9.3.4 caused by any permanent or temporary alteration (which includes occupation, use and physical changes) to property situated at or brought onto the Insured Premises, the Yard or any Alternate Construction Premises which increases the risk of loss, damage or liability where you or your managers have failed to notify us of any such alteration as soon as reasonably practicable;
9.3.5 arising from unseaworthiness, where with the privity of you or your managers, the Vessel or Vessel under Construction is sent to sea when not in a seaworthy state;
9.3.6 caused by you, your managers, your Employees or anyone for whom you are legally responsible being, with your or yours managers' privity, under the influence of alcohol and/or drugs;
9.3.7 in respect of war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power, strikers, locked out workman, or persons taking part in labour disputes, riots or civil commotions or any terrorist or any person acting from a political motive, other than to the extent that you are insured in respect thereof under Section 7 of these Clauses;
9.3.8 arising from your failure to comply with all statutory or other obligations and regulations imposed by any authority relating to inspection and testing; 

9.3.9 arising from the failure to collect or sweep up all trade refuse from any building at the Insured Premises, the Yard or Alternative Construction Premises and to place it outside not less than 5 metres from all such buildings on a daily basis;
9.3.10 arising from the failure to store all resins, fibre glass, solvents, cellulose based
materials and the like outside buildings in suitable metal or brick structures, except for the amount of such materials that is required inside buildings in the course of conducting the Insured Activities for that day, in which case these materials shall be kept inside buildings in secure metal containers;
9.3.11 arising from the failure to maintain during the currency of this insurance, all physical protections and intruder alarms at your Insured Premises, the Yard or Alternative Construction Premises in efficient working order and bring them into operation whenever such premises are left and no adult authorised by you or your managers is present;
9.3.12 arising from the failure to have all electrical circuits tested at least once every 3 years by a qualified electrical engineer and the defects found to be remedied immediately in accordance with the regulations of the nationally recognised body or association of electrical engineers, who are to issue a Certificate which is to be retained by you;
9.3.13 arising from the failure to carry out battery charging (of any variety) other than in ventilated fireproof premises or outside in the open;
9.3.14 arising from the failure to immobilise all trailers with an adequate anti-theft device;
9.3.15 arising from the failure to have yourstandard trading conditions of your business approved by us prior to use and/or the failure to incorporate your standard trading conditions of your business into every agreement for the provision of the Insured Activities;
9.3.16 arising from the failure of you, your agents or servants in all cases to take such measures as be reasonable for the purpose of averting or minimising any loss, damage or liability which would be recoverable under this insurance.
9.4 Nuclear Exclusion relating to all Sections of This Insurance
In no case shall this insurance cover loss, damage, liability or expense directly or indirectly
caused by or contributed to by or arising from :
9.4.1 ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel;
9.4.2 the radioactive, toxic, explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof;
9.4.3 any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.
10 GENERAL TERMS AND CONDITIONS
10.1 Disclosure and Representations

10.1.1 Before the contract for this insurance is concluded, you must disclose to us every material circumstance which is known to you or your agent (where this insurance is effected for you by an agent), and you and your agent are deemed to know every circumstances which, in the ordinary course of business, ought to be known by you or your agent. If you or your agent fail to make such disclosure, we may avoid the contract of this insurance.
10.1.2 The material representations made by you or your agent to us during the negotiations for the contract, and before the contract is concluded, must be true. If any such material representation is untrue we may avoid the contract of this insurance.
10.1.3 Every circumstance and representation is material which would affect the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk.
10.1.4 Whether any particular circumstance or a particular representation is material or not is, in each case, a question of fact.
10.1.5 The term "circumstance" includes any communication made to or information received by you or your agent.
10.1.6 A representation may be a representation as to a matter of fact, or as to a matter of expectation or belief. A representation as to a matter of expectation or belief is true if it is made in good faith.
10.1.7 A representation may be withdrawn or corrected before the contract is concluded.
10.1.8 This contract is deemed to be concluded when the proposal form which you have completed or which has been completed on your behalf and signed by you or your agent is accepted by us whether the Certificate is then issued or not. In the event that we expressly state in writing that we do not require a proposal form from you, then this contract is deemed to be concluded when your submission for insurance is accepted by us.
10.2 Proposal Form
The proposal form which you have completed or which has been completed on your behalf and signed by you or your agent forms the basis of the contract between you and us. You guarantee the accuracy of the information in the proposal form.
10.3 Continuation of Insurance
If the Vessel or Vessel under Construction is at sea when this insurance expires, you will be held covered under this insurance until the Vessel or the Vessel under Construction arrives safely at her next port of call provided that you notify us as soon as possible and agree to pay any additional premium which we may require.
10.4 Insured Value
10.4.1 You are to insure all items of property, except Vessels under Construction under Section 5 (Vessels under Construction) and the Vessels insured under Section 8 (Vessels) for their new replacement cost, unless the Certificate specifies that a particular item is insured for its second hand value.
10.4.2 You are to include the costs of debris removal, architects' and other professionals' fees and the costs of complying with public authorities' requirements necessarily incurred in the reinstatement or replacement of damage to buildings and contents in the Insured Value of items of property insured under Section 2 of these Clauses, unless specified to the contrary in Section 2 of the Certificate. 
10.4.3 If the Insured Value of any item of insured property, except the Vessels insured under Section 8 (Vessels), in the Certificate is less than the cost that would be incurred in the reinstatement or replacement of the whole of that item, then the amount we will pay you will be proportionately reduced.
10.4.4 The Vessels insured under Section 8 (Vessels) shall be insured at an agreed value at the current market value of the Vessel at the commencement of this insurance which you must declare to us prior to this contract of insurance being concluded.
10.5 Amount Recoverable
10.5.1 Subject to the other terms of this insurance, if as a result of an Insured Event an insured item of property specified in the Certificate is totally lost or is so badly damaged that the reasonable cost of recovering or repairing the item would exceed the Insured Value as set out in the Certificate, we will either pay you the Insured Value as set out in the Certificate or, at our option, replace the item with one of a similar type and in equivalent condition.
10.5.2 In any other case where the item of property is damaged as a result of an Insured Event we will pay the reasonable cost of repairing the item, or at our option, replace any individual item or part thereof lost or damaged with an item of a similar type and in equivalent condition.
10.5.3 In the event that more than one company and/or individual is specified as the Insured in the Certificate, our maximum liability under Sections 1, 5.3 or 8.2 of this insurance for Third Party Liability for each accident or series of accidents arising from the same event that may be recovered under this insurance shall not exceed the Third Party Liability Limit of the applicable Section of this insurance.
10.5.4 In the event that you are insured for liabilities to Third Parties under more than one Section of Your Certificate in respect of each accident or series of accidents from the same event, then our maximum liability under this insurance shall be limited to the amount of the largest Third Party Liability Limit specified in such Sections of the Certificate.
10.6 Sistership
If the Vessel or Vessel under Construction collides with or receives salvage services from another vessel belonging wholly or in part to you or under your management, you shall have the same rights under this insurance as you would have were the other vessel entirely the property of owners not interested in the Vessel or Vessel under Construction; but in such cases the liability for the collision or the amount payable for the services rendered shall be referred to a sole arbitrator to be agreed upon between you and us.
10.7 Duty to Sue and Labour
10.7.1 In the case of any loss or misfortune it is the duty of you, yourservants and agents to take such measures as may be reasonable for the purpose of averting or minimising a loss which would be recoverable under this insurance and to minimise liabilities to third parties. We will not pay for any loss, damage or liability proximately caused, in whole or in part, by a breach of this duty.
10.7.2 In addition to sums otherwise payable under this insurance, we will indemnify you for the
reasonable costs of any steps which you or your servants or agents take in accordance with your obligation under this Clause 10.7, but not exceeding the Insured Value of the insured item (or the amount recoverable under Clause 5.12.1 if in respect of a Vessel under Construction) in respect of which the duty in Clause 10.7.1. is being discharged. 

10.7.3 Salvage charges, collision attack or defence costs and costs incurred in contesting liability under Clauses 1.2.2, 5.3.2.2 and 8.2.2.2 are not covered by this Clause 10.7.
10.8 Mutual Survey Clause
10.8.1 In the event that we agree in writing that a claim for physical loss of or damage to an item of property insured under this insurance is recoverable under this insurance and you and us fail to agree as to the amount recoverable thereunder, either party may make a written demand for a Mutual Survey, the result of which will be binding on both you and us.
10.8.2 Within thirty days of the written demand for a Mutual Survey, each party shall appoint a qualified marine surveyor. The surveyor shall be a member of a nationally recognised society of marine surveyors. Credentials must be presented to the other party at the time of appointment. Both surveyors shall mutually agree upon a third qualified marine surveyor to act as a neutral surveyor or referee. The Mutual Survey shall be scheduled as soon as practicable at which time each surveyor shall jointly and mutually inspect the vessel and divide the loss, damages, repairs, betterments and improvements to the accounts of either you or us. In the event of disagreement between your or our surveyors, the decision of the neutral surveyor shall be binding. The result of the Mutual Survey shall be in writing and signed dated by the neutral marine surveyor.
10.8.3 The cost of these surveyors are to be paid by the party appointing them and the cost of neutral marine surveyor is to be divided equally between both parties.
10.8.4 In the event that it is necessary for either you or us to litigate in order to enforce any provision of the Mutual Survey Clause of this insurance, the costs and legal expenses incurred therein shall be awarded to the successful party.
10.8.5 This Mutual Survey Clause applies only to disputes in which the amount of or quantum of a claim for physical loss of or damage to an item of property insured under this insurance and which is recoverable under this insurance and it does not apply to claims in which coverage is contested or claims by a third party.
10.9 Unrepaired Damage
10.9.1 Our measure of indemnity in respect of claims for unrepaired damage shall be the reasonable depreciation of that item of property or the Vessel at the time this insurance terminates arising from such unrepaired damage, but not exceeding the reasonable cost of repairs.
10.9.2 In no case shall we be liable for unrepaired damage in the event of the subsequent loss (whether or not covered under this insurance) sustained during the Period of Insurance.
10.9.3 We will not be liable in respect of unrepaired damage for more than the Insured Value of the item at the time of the termination of this insurance.
 

10.10 Discretion To Settle Third Party Liability Claims
We have the sole discretion to settle a claim for liabilities allegedly incurred by you to a Third Party under Sections 1, 5.3 and 8.2 of this insurance, by paying an amount to the Third Party in full and final settlement of their claim against you.
10.11 Contribution
10.11.1 If at the time of any loss, damage or accident that may give rise to liability, there is any other insurance effected by you or on your behalf covering the Vessel insured by us or against liabilities to third parties which are covered by this insurance, then our liability shall be limited to its rateable proportion.
10.11.2 If any other such insurance is subject to any provision excluding it from ranking concurrently with this insurance, whether in whole or in part or from contributing rateably, our liability under this insurance shall still be limited its rateable proportion.
10.12 Change Of Ownership
This Clause 10.12 shall prevail notwithstanding any provision whether written, typed or printed in This Insurance is inconsistent herewith. Should the business (or item of property) insured under this insurance be sold or transferred to new ownership or where the business is owned by a company, should there be a change in the controlling interest(s) of the company, then unless we agree in writing to continue this insurance, this insurance (or the insurance in respect of such an item of property), shall be cancelled from the time of such sale, transfer or change. A pro-rata daily net return of premium shall be made provided always that a minimum of 3 months premium shall not be returned.
10.13 Assignment
No assignment of or interest in this insurance or in any monies which may be or become payable thereunder is to be binding on or recognised by us unless a dated notice of such assignment or interest is signed by you and an Endorsement has been issued and signed by us.
10.14 Claims Procedure
Failure to comply with any of the provisions of this Clause 10.14 may prejudice your claim.
10.14.1If there is an accident which may give rise to a claim under any Section of this insurance you must give notice as soon as reasonably possible to Underwriting Risk Services Limited. (Details in Clause 10.22 below.)
10.14.2In case of theft or malicious damage you must also notify the local police and the port authority as soon as reasonably possible.
10.14.3You must co-operate fully with us in providing and obtaining any information and evidence and must permit us to take proceedings in your name (but at our expense) to recover compensation or secure an indemnity from any third party in respect of anything covered by this insurance.
10.14.4If you make any claim, or statement in connection with any claim, which you know to be false or fraudulent, or you fail to disclose any material information in connection with that claim, you will not be entitled to an indemnity in respect of that claim or any part thereof. 

10.14.5Where you make a claim for physical loss of or damage to items of property insured under this insurance, you must submit estimates to replace or repair the loss or damage. These estimates must provide a detailed breakdown of the cost of materials and labour. Any estimates of the reasonable cost of replacement or repair prepared and submitted by you must be signed and dated by you.
10.14.6Claims for replacement or repair of physical loss or damage under this insurance will only be paid after ourwritten approval of estimates submitted to us by you and after such replacement or repair has taken place.
10.14.7Where you submit a claim for your labour charges and an "Agreed Charge Out Rate for
Labour Costs" is specified in the Certificate, we will pay these charges in accordance with the rate so specified.
10.14.8If we make any payment to you or on your behalf pursuant to this insurance, we will be
subrogated to all of your rights of recovery or contribution against any person in relation to any relevant matter.
10.15 Abandonment
Any abandonment by you of the Vessel or Vessel under Construction to us will only be valid if we have issued an Endorsement specifying that we accept your abandonment.
10.16 Notices
Any notice which you are required to give us can be given by letter or fax to Underwriting Risk Services Limited. (Details in Clause 10.22 below.) Any notice which we are required to give you can be given by registered post to your Postal Address as shown on the Certificate.
10.17 Cancellation
We may cancel this insurance or any Section thereof at anytime by sending 30 (thirty) day's notice by recorded delivery letter to you to your Postal Address as shown on the Certificate. In these circumstances we will pay you a pro rata net return of premium in respect of the unexpired Period of Insurance, provided that we will retain a minimum of 3 months net premium and provided also that no return premium will be payable in the event of a claim having been paid or becoming payable under this insurance for the Period of Insurance.
10.18 Premium
10.18.1 You or your insurance broker or intermediary must pay us all premiums due as specified in the Certificate within 45 days of the date of its issue, unless otherwise agreed by us in writing. If you fail to do so, this insurance will be void from inception.
10.18.2 You or your insurance broker or intermediary must pay us all premiums due as specified in any Endorsement within 45 days of the date of its issue, unless otherwise agreed by us in writing. If you fail to do so, we will be discharged from liability under this insurance from the date the Endorsement is issued.
10.18.3 The premium specified in the Certificate is a minimum and deposit premium. There will be no return of premium under this insurance except where this insurance is cancelled in accordance with Clause 10.7 above. 

10.18.4 Where we require an additional premium under Clause 5.11.4 or where we agree in writing to extend the Period of Insurance of this insurance beyond the Contract Period specified in Section 5 of the Certificate, the additional premium we require will be calculated in accordance with the adjustable rate of premium specified in Section 5 of the Certificate.
10.19 Proper Law
The parties are free to chose the law applicable to this insurance. Unless the Certificate provides to the contrary this insurance shall be governed by and construed in accordance with English law.
10.20 Jurisdiction
Unless the Certificate provides to the contrary this insurance is subject to the exclusive jurisdiction of the Courts of England.
10.21 Complaints Procedure
10.21. 1 If you have any problem or complaint regarding this insurance, please contact your insurance intermediary or Underwriting Risk Services Limited (Details in Clause 10.21.2 below).
10.21.2 If you remain dissatisfied, you may refer the matter to:-
Complaints Department, Lloyd's of London, 1