Rule 1 - Introductory: Interpretation: Membership: General Provisions

1. Each and every provision of the By-Laws of the Association and these Rules of Class I are applicable to all Protection and Indemnity insurances of the Association. However, without prejudice to the generality of these provisions so far as they apply to this Class I, they shall only apply to Protection and Indemnity insurances contracted under Class III to the extent that they have been expressly incorporated therein.
2. The standard Protection and Indemnity cover afforded by the Association to a Member who has insured his vessel with the Association is set out in Rule 2 below.
3. The cover set out in these Rules may be excluded, limited, modified or otherwise varied by any special terms expressly agreed in writing between a Member and the Managers.
4. The Managers may accept the insurance of vessels on terms which afford cover to a Member against any special or additional risks not set out in Rule 2. The nature and extent of the risks and the terms of such cover shall be as expressly agreed in writing between the Member and the Managers.
5. A Member is only insured against loss, damage, liability or expense incurred by him which arises:
   1. out of events occurring during the period of the policy year when his vessel is insured with the Association; and
   2. in respect of the Member’s interest in the insured vessel; and
   3. in connection with the operation of the insured vessel by or on behalf of the Member.
6. Notwithstanding the terms of Rule 1.1.5 above, a Member maybe insured otherwise than in respect of the insured vessel, or otherwise than in connection with the operation of the insured vessel, but only where this has been expressly agreed in writing between the Member and the Managers.
7. Subject to the provisions of Rule 1.1.8 below, a Member who has insured his vessel with the Association for insurance against any or all of the aforesaid risks is obligated to pay premium to the Association in accordance with Rule 4, such insurance being hereinafter referred to as mutual insurance and premium payable by reason thereof mutual premium.
8. Notwithstanding the provisions of Rule 1.1.7 above, a Member may be insured on special terms to the effect that he is liable to pay fixed premium to the Association, such insurance being hereinafter referred to as fixed insurance, and premium payable by reason thereof fixed premium, but only where this has been expressly agreed in writing between the Member and the Managers.
9. The insurance provided by these Rules is solely for the benefit of a Member, Joint Member, Co-assured, Affiliate or such other parties as set out and defined in Rule 1.3.
10. In these Rules, the words set out in Rule 1.2 below shall have the meaning ascribed to them in the said Rule 1.2.

AFFILIATE:

Any person who is insured in accordance with Rule 1.3.12.

APPLICANT MEMBER:

In relation to a vessel which is desired or intended to be insured with the Association means an owner, operator or charterer (including a bareboat or demise charterer) of such vessel and any other person by whom or on whose behalf an application has been, is being or is to be made for the insurance of such vessel with the Association whether or not he is or is to be a Member of the Association.

ASSOCIATION:

American Steamship Owners Mutual Protection and Indemnity Association, Inc.

BILL OF LADING:
A bill of lading or similar document of title.

BY-LAWS:

The By-Laws of the Association at the relevant times.

CARGO:

Goods, including anything used or intended to be used to secure goods, which are subject to a contract of carriage to which the Member is party, but excluding containers or other equipment owned or leased by the Member.

CERTIFICATE OF ENTRY:

The document issued by the Managers on behalf of the Association evidencing the contract of insurance between a Member and the Association pursuant to the provisions of Rule 1.4.6 to 9 inclusive.

CO-ASSURED:

Any person who is insured in accordance with the terms of Rule 1.3.8 to 1.3.11.

CONTAINER:

A container or similar receptacle, including trailer, flat, pallet or tank, as  may have been expressly agreed to be such in writing by the Managers.

CONVENTION LIMIT:

Has the meaning ascribed to it in Rule 4.15.

DIRECTORS:

The Board of Directors of the Association at the relevant times.

EFFECTS:

Personal property, documents, navigational or other technical instruments and tools brought on board, or being taken to or from an insured vessel by a seaman or supernumerary but excluding cash, valuables, or any other article which, in the opinion of the Directors, is not an essential requirement for a seaman.

ENDORSEMENT:

A document issued by the Managers on behalf of the Association evidencing any variations or additions to the contract of insurance as contained in a Certificate of Entry of which it forms an integral part.

FINES:

Fines, penalties and other impositions similar in nature to fines imposed in respect of any insured vessel by any court, tribunal or authority of competent jurisdiction.

FIXED PREMIUM:

Any premium which is not mutual premium.

FLEET:

Any two or more vessels insured hereunder having common nominal, or beneficial, ownership, management or control.

GROUP EXCESS LOSS CONTRACT:

The excess loss reinsurance contract entered into by the parties to the Pooling Agreement.

GROUP REINSURANCE LIMIT

Has the meaning ascribed to it in Rule 4.15.

HULL INSURANCE(S)/HULL POLICY(IES):

Insurance in respect of the insured vessel’s hull and machinery, increased value and excess liability.

INSURED VESSEL:

A vessel which has been insured with the Association.

IN WRITING/WRITTEN:

Visibly expressed in any mode of permanently representing or reproducing words including telegram, facsimile transmission and other electronic communication.

JOINT MEMBER:

Any person who is insured in accordance with the terms of Rule 1.3.5.

MANAGERS:

Shipowners Claims Bureau, Inc.

MEMBER:

An owner, operator or charterer (including a bareboat or demise charterer) of a vessel insured by the Association who according to the By-Laws and these Rules is entitled to membership of the Association, provided that, where the context requires or allows, the term Member shall, in these Rules, include a Joint Member, Co-assured and Affiliate.

MUTUAL PREMIUM:

Premium payable by a Member in consideration of the affording by the Association of mutual insurance and subject to the relevant provisions of Rule 4.

NET PREMIUM:

Has the meanings ascribed to it in Rule 4.7 or Rule 4.11 as the context requires.

OVERSPILL CALL:

Has the meaning ascribed to in it Rule 4.15.

OVERSPILL CLAIM:

Has the meaning ascribed to in it Rule 4.15.

OVERSPILL CLAIM DATE:

Has the meaning ascribed to in it Rule 4.15.

PASSENGER:

A person carried on board an insured vessel under a contract of carriage or who, with the consent of the carrier, is accompanying a vehicle or live animals covered by a contract for the carriage of goods.

POLICY YEAR:

A year from noon GMT on any February 20 to noon GMT on the next following February 20.

POOLING AGREEMENT:

The agreement, to which the Association is a party, between certain protection and indemnity associations dated February 20, 1998 and any addendum to, variation or replacement of, the said agreement, or any other agreement of a similar nature or purpose.

PREMIUM TO RELEASE:

That part of mutual premium capable of being levied and collected under the provisions of Rule 4.8 to 10 inclusive.

RULES:

These Rules as originally framed or as may from time to time be altered, abrogated or added to and in force at relevant times.

SEAMAN:

An employee of a Member falling within the categories of person set out in Rule 2.1.B or, solely and exclusively for purposes of the interpretation of Rule 1.4.34, any person on board an insured vessel who is not a passenger.

SUPPLEMENTARY PREMIUM:

That part of mutual premium capable of being levied and collected under the provisions of Rule 4.5 to 7 inclusive.

VESSEL:

Any ship, boat, hydrofoil, hovercraft or other description of vessel (including a lighter, barge or similar vessel howsoever propelled but excluding a fixed platform or fixed rig) used or intended to be used for any purpose whatsoever in navigation or otherwise on, under, over or in water or any part of such vessel or any proportion of the tonnage thereof or any share therein.

Words importing the singular number only shall include the plural number and vice versa.

Words importing the masculine gender only shall include the feminine and neuter genders.

Words importing persons shall include individuals, partnerships, corporations, associations, joint ventures and any other business entities.

1. Any insurance of a vessel provided to any party falling within the definition of Member in Rule 1.2 above shall give rise to membership in the Association, except where such is expressly excluded by the terms of this Rule 1.3 or where such has been denied through the exercise of a permitted discretion hereunder
2. Any reinsurance by the Association of a vessel insured by another insurer may (at the absolute discretion of the Managers) give rise to the membership in the Association of that other insurer and/or of any party falling within the definition of Member in Rule 1.2 above in relation to that vessel.
3. Membership may be in respect of one or more of the vessels owned, operated, chartered or insured by the Member and shall continue until all of the Member’s insurances shall have ceased or been terminated.
4. All insurances shall be governed by the By-Laws and by the Rules of the Association.
5. If any application for insurance of interests in the same vessel is made in the names or on behalf of more than one person, whether jointly or separately interested, then such persons maybe treated as Joint Members and the insurance of such vessel as joint insurance, the consequences of which, unless otherwise expressly agreed by the Managers in writing, shall be as set out in Rules 1.3.13 to 18 below.

6. The Managers may agree, subject to the provisions of this Rule1.3 and to such other terms as they may in their absolute discretion require, to extend the cover afforded by the Association to a Member to:
   1. any person who is affiliated to or associated with that Member (not being a Co-assured or an Affiliate as referred to in Rule 1.3.11), and who shall not be specifically named in the terms of entry; and
   2. any other named co-assured.
7. The cover afforded to a Co-assured in categories (i), (ii) and (iii)below shall extend only to liabilities, losses, costs and expenses arising out of operations and/or activities customarily carried on by, or at the risk and responsibility of, shipowners:
   1. any person interested in the operation, management or manning of the insured vessel;
   2. the holding company or the beneficial owner of the Member or of any Co-assured falling within category (i) above;
   3. any mortgagee of the insured vessel.
8. Notwithstanding the provisions of Rule 1.4.30 below, the cover afforded to a Co-assured who is a time or voyage charterer of an insured vessel and who is affiliated to or associated with a Member (other than a  Co-assured expressly given cover by the Association in accordance with Rule1.3.10) shall extend  only to the risks, liabilities, losses, costs and expenses in respect of which that Member has cover, and is limited as follows:

to the lesser of either (a) the sum to which such Member shall be deemed to be entitled to limit his liability under Rule 1.4.30 plus an additional $50,000,000, or (b)$300,000,000; but if his liability is in respect of oil pollution, recovery shall be limited to $100,000,000.

Provided that where a vessel is separately insured for charterers’ risks by more than one time charterer with the Association or any other association which participates in the International Group of P&I Clubs’ Pooling Agreement and Excess Reinsurance Policies, the aggregate recovery in respect of all claims for oil pollution liability following any one occurrence brought against all time charterers of such insured vessel and/or against the Association and/or against any other association shall be limited to $300,000,000. The liability of the Association in respect of such claims shall be limited to that proportion of $300,000,000that each claim recoverable from the Association bears to the aggregate of the claims recoverable against the Association and such other associations.

9. The cover afforded to a Co-assured who has entered into a contract with the Member for the provision of services for or by the  insured vessel, and any sub-contractor of the Co-assured, shall extend only to liabilities, losses, costs and expenses which are to be borne by the Member under the terms of the contract and which would, if borne by the Member, be recoverable by the Member from the Association, provided that:
   1. the contract has been expressly approved by the Managers; and
   2. the contract provides that each party shall be similarly responsible for any loss or damage to its own (or its sub-contractors’) property or loss of life or personal injury to its own (or its sub-contractors’) personnel.
10. The cover afforded to all other categories of Co-assureds, other than those referred to in Rules 1.3.7 to 9 inclusive, shall only extend insofar as such Co-assured may be found liable to pay in the first instance for loss or damage which is properly the responsibility of the Member, and nothing herein contained shall be construed as extending cover in respect of any amount which would not have been recoverable from the Association by the Member had the claim in respect of such loss or damage been made and enforced against him.
11. The cover afforded to an Affiliate shall extend only to claims made and enforced through the Affiliate in respect of any liabilities for which the Member has cover and nothing herein contained shall be construed as entitling an Affiliate to recover any amount which would not have been recoverable from the Association by the Member had the claim been made and enforced against the Member.
12. To the extent that the Association has indemnified a Co-assured or an Affiliate in respect of a claim, it shall not be under any further liability and shall not make any further payment to any person whatsoever, including the Member, in respect of that claim or of the loss or damage in respect of which that claim was brought.

13. The Managers shall not be bound to issue any Certificate of Entry or Endorsement to more than one Member, delivery of which to whom shall be sufficient delivery to any and all Joint Members and to any and all Co-assureds and Affiliates.
14. Joint Members, Co-assureds and Affiliates insured on any one insurance, or in respect of any fleet as defined in Rule 1.2 above, shall be jointly and severally liable for all sums due to the Association in respect of such insurance or such fleet.
15. Any payment by the Association to one Joint Member, Co-assured or Affiliate shall fully discharge the obligations of the Association in respect of such payment.
16. Any communication by the Association to one Joint Member, Co-assured or Affiliate shall be deemed to be communication to all.
17. Any communication from one Joint Member, Co-assured or Affiliate shall be deemed to have been made with the full approval and authority of all.
18. The conduct or omission of one Joint Member, Co-assured or Affiliate which under these Rules would constitute a breach of the contract of insurance, shall be deemed to be the conduct or omission of all Joint Members, Co-assureds and Affiliates.