i-law

Millers Marine War Risks


Page 21

CHAPTER 4

Cancellation and automatic termination of cover Clause

Cancellation and automatic termination of cover Clause

4.1 This clause acts, either upon the giving of notice or automatically depending on the trigger, to cancel the war risks cover otherwise provided upon the occurrence of certain circumstances. From time to time, for example by the previous author of this text, the possibility has been suggested of removing the provision that war risks insurance would automatically cease “upon … any hostile detonation of any nuclear weapon of war” wherever it may occur. The Second Edition of this text (1995) suggested that there should be a simpler provision that only loss of or damage to the insured object caused by “any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter” should be excluded from the insurance. 4.2 Needless to say, no removal or development of the provision has taken place. The format of the clause adopted on 1.10.83, which is quoted in paragraph 4.5, owed its ­origin to the time when only the five Powers who formed the Five Permanent Members of the ­Security Council of the United Nations possessed nuclear weapons, the so-called ­“Nuclear Club”. These were the United Kingdom, the United States of America, France, the USSR, and the People’s Republic of China. If one of these Powers should use an atomic weapon against another such Power, then this was tantamount to a “war” of a nature which would automatically bring the insurance to an end in any event. 4.3 Is the clause still fit for purpose though? In an age of nuclear proliferation, many countries outside the previous five have, or are believed to have, military nuclear capabilities. For instance, Israel, India, Pakistan, and possibly in the not too distant future, North Korea or even, Iran. If one of these nations should employ a nuclear weapon against a neighbour, this may (or may not) start a global conflict involving the Five Permanent Members of the Security Council but, under the Clause dated 1.10.83, deployment of such a weapon would bring all the War Risks insurance to an abrupt end. This would cause great hardship to interests whose insured objects were far from the scene and in no possible danger. One hopes of course the situation will never arise. 4.4 The suggestion made in 4.1 has in fact been adopted by a new Clause dated 1.11.95, but only in respect of ships and their freight. Cargo (where the clause appears at all) and container insurance still contain the clause in its 1.10.83 version. It is therefore necessary to consider their respective positions separately. 4.5 The clause in its 1.10.83 version (“the 1.10.83 version”) reads:

This insurance may be cancelled by either the underwriters or the assured giving seven days’ notice (such cancellation becoming effective on the expiry of seven days from midnight of the day on which notice of cancellation is issued by or to the underwriters). The underwriters


Page 22

agree however to re-instate the insurance subject to agreement between the underwriters and the assured prior to the expiry of such notice of cancellation as to the new rate of premium and/or conditions and/or warranties.

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.