Section 1 - Introductory Provisions

1.            Each and every provision of the By-Laws of the Association and of these Rules of Class III are applicable to all insurances for Charterers’ Risks provided by the Association. Provided always, however, that the cover provided by these Rules of Class III shall in no circumstances apply to a charterer who has been named as a Co-assured in an insurance of a Member pursuant to the terms of Rule 1.3.8 of Class I, where such a charterer is affiliated to or associated with such a Member.

2.            The standard cover afforded by the Association to a Member who has insured his vessel with the Association for Charterers’ Risks only as defined herein 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:

               i.                  out of events occurring during the period when his vessel is insured with the Association; and

              ii.                  solely and exclusively in respect of a Member’s interest in the insured vessel as time or voyage charterer thereof; and

            iii.                  in connection with the operation of the insured vessel by the Member solely and exclusively as time or voyage charterer thereof.

6.            A Member who has entered his insured vessel for cover against any or all of the risks and losses set out in Rule 2 is obligated to pay premium to the Association in accordance with Rule 4, that is to say by way of fixed premium and not by way of mutual premium as provided for in Rule 4 of Class I. Such premium may hereinafter be referred to as charterers’ fixed premium.

7.            Notwithstanding the provisions of Rule 1.1.6 above, a Member may be insured on special terms to the effect that he is liable to pay mutual premium to the Association in accordance with Rule 4 of Class I where expressly agreed as between the Member and the Managers. This shall hereinafter be referred to as charterers’ mutual insurance and premium payable in respect thereof charterers’ mutual premium.

8.            Provided always, however, that irrespective of whether cover in accordance with these Rules of Class III has been agreed on the basis of the liability of the Member to pay premium as charterers’ fixed premium or as charterers’ mutual premium, each and every insurance provided under the terms of these Rules of Class III shall be subject to a Member’s maximum right of recovery which shall in all cases be set at a prescribed monetary figure for the various interests insured hereunder and as shall have been agreed in individual cases between the Member and the Managers.