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MARINE INSURANCE / WARRANTY
 The Act
 Principles
 Warranties
 Common Findings
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103
www.marinesurveyordubai.com www.constellationms.com
The Policy
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
The Marine Insurance
Act, 1906
This act came into force on 1st January 1907.
It did’nt make any new additions law but only
codified the existing legal decisions which had
been recorded up to that time.
Marine insurance contracts are based on the
principles laid down in this Act.
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : WWW.marinesurveyordubai.com
THE PRINCIPLES OF MARINE
INSURANCE
Five basic principles of Marine Insurance
 Insurable interest
 Utmost Good Faith *
 Proximate Cause **
 Indemnity
 Subrogation
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
THE PRINCIPLES OF MARINE
INSURANCE
Utmost Good Faith:
 All contracts of marine insurance are
contracts ‘Uberrimae fidei’ i.e. of the utmost
good faith’.
 …. and if the utmost good faith be not
observed by either party, the contract may be
voided by the other party.
Marine Insurance Act 1906
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
THE PRINCIPLES OF MARINE
INSURANCE
Proximate Cause (or ‘causa proxima’ )
is derived from the legal dictum ‘ causa
proxima non remota spectatur’. This means
that ‘the proximate and not the remote
cause to be considered’. The Act provides
that the insurer is liable for any loss
proximately caused by a peril insured
against.
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
Policy terms….
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : www.marinesurveyordubai.com
Ie: More than 50% crew out
on shore leave and fire
breaks on board. - Or -
Master intoxicated and its
proven negligence of
Command
 Failure of an insured to comply with a warranty, for whatever reason, may result in the
underwriter avoiding claims under the contract, which means the vessel is,in effect,
uninsured as from the moment of the breach of warranty. As an example ,a term of a
standard hull policy is that the insured must exercise due diligence in looking after his
vessel. If a claim is made for, say, damage to the vessel whilst laid up,and it was shown
that he neglected the vessel and did not maintain her, dependent on the circumstances,t he
policy may be avoided and no claim paid.
Warranties
A warranty is a promise made by the assured that a
particular condition shall be fulfilled, or a particular thing
shall be done or otherwise, or confirm / negates that
existence of a particular state of facts.
A warranty must be taken literally and must be exactly
complied with by the assured. Any non compliance will lead
to a breach of warranty and the insurer will be discharged
from all liabilities under the policy from the date of such
breach.
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
Warranties

By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
THE WARRANTY CLAUSES AND
THEIR MEANINGS
WARRANTIES IN MARINE INSURANCE POLICIES
A warranty is the same as a “condition” on any other type of insurance policy. It is an
express or implied contractual undertaking by the assured (the individual taking out the policy)
that something will or will not be done.
The assured undertakes that some particular thing shall or shall not be done or that some
condition shall be fulfilled or he affirms or negates the existence of a particular state of facts.
 A warranty must be literally complied with, whether material to the risk or not.
 An express warranty is written into the policy or contained in some document
incorporated in the policy by reference to it.
 Implied warranties are not written in the policy but are implied by law to exist
in the contract of insurance. They must be strictly complied with as express warranties.
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
THE WARRANTY CLAUSES….
 They may have reference specialised procedures or guidelines to be followed by
the assured.
 They may stipulate that the operation of the covered risk is always to be within
the context of an approved operations manual.
 They may require that the operation be overseen by a named third party whose
professional competence and judgment is accepted by the underwriter as proof
that it was carried out or will be carried out to agreed standards.
 They may require that the competent third party issue a CERTIFICATE OF APPROVAL prior to
the commencement of the operation in order for the insurance policy to become valid.
 In addition the failure of the assured to abide by-the conditions of the
CERTIFICATE OF APPROVAL may invalidate the contract of insurance.
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
THE ROLE OF A WARRANTY SURVEY COMPANY
These companies provide consultancy services to the marine and offshore industries as
third parties (Constellation Marine being one of them) giving professional advice for
fees. Their business success relies on their unquestioned integrity, high
professional standards and expertise.
Their business activities span both the insurance and marine industries and they vary
in size from quite small to very large and diverse companies.
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
OVERVIEW OF TYPICAL PRECAUTIONERY WORK
 On-Site Evaluation at Departure Port
Tug Approval Survey
Barge Survey
Cargo Securing Inspection
Operational Survey
 Jack-up Rig Move
The example is a three-leg jack-up drilling unit (barge). It is presently located at
position A where it is completing a workover on a platform and is to proceed to
position B, a distance of about 150 nautical miles, where it is to perform an
exploration drilling operation in an “open” location.. The client is the owner of
the barge.
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
TUGS AND TOWING GEAR
 Practical knowledge required
 Towing Vessel Requirement and Selection
 Criteria – Minimum Towing Force – A well known warranty survey
company requires that:
Sufficient towing power is available to hold the vessel being towed at zero
speed against the following conditions:
Wind speed 44 knots
Current speed 4 knots
Significant wave height 25 feet
 Determining the power of oilfield tugs
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
SURVEYOR’S INSPECTION OF A TOWING VESSEL
Inspection of the Vessel
 The Towing Gear
 Ancilliary Gear
 Towing Machinery
 Working Deck Area
 At the Bow
 Mooring Ropes
 Machinery Spares
 Bridge Area
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS-
RD- Middle East
Following faults are grounds for outright rejection of OSVs/tugs for service:
1. Insufficient fuel, food, water, lubricating oil.
2. Main engine broken down, steering gear broken down, tow winch broken down.
3. Main or spare tow wire unserviceable due to being outside standard criteria for use either due to
damage or under size or length.
4. Any main certificates out of date (including survey range dates).
5. Damaged/in-sufficient life saving firefighting equipment.
Boat under-powered for service required. Does not meet bollard pull criteria. 8. Damaged and inoperative
power generation machinery leaving only one
generator.
9. Hull damage to boat such that stability criteria is impaired.
10. Contaminated fuel such that engine reliability is doubtful.
11. Tow Pennants, Towing Shackles, Towing Sprigs insufficient in number,
insufficient in strength terms or damaged so as to be unserviceable.
12. Navigational equipment outfit including radar, gyro compass etc, inoperative or
damaged or insufficient such that accurate position fixing and navigation is
unreasonably difficult.
13. Incompetence of the master and officers such that lack of knowledge of
towing and ship handling would imperil the operation.
SURVEYOR’S INSPECTION OF A TOWING VESSEL
-PRECAUTIONS-
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
SURVEYOR’S INSPECTION OF A TOWING VESSEL
The following areas are those where experience and judgement count “more than” rigid
guidelines or meeting precise criteria:
1. The true condition of tow wires, pennants, stretchers and all other towing running gear.
2. The true condition of main engines and towing winches and steering gear.
3. The amounts of spare parts and tools/equipment for the repair of main engines and
auxiliary machinery. Class society spares are the minimum required.
4. The knowledge and skill of the master, officers and crew.
5. Defects which are borderline cases can be judged on deciding how they affect the
operation of the boat for the particular operation concerned and whether they can be
rectified or mitigated.
Charter’s (or) Operators are always in a desperate rush to get the vessel into the fields
- Go to Reputable Operators
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
www.constellationMS.com
- BY Capt. Zarir Irani, MIIMS- RD-
Middle East
WARRANTY SURVEYORS REPORT AND RECOMMENDATIONS EXTRACTS
Section Title Page No.
1. Documentation 000
2. Drilling derrick and blocks 000
3. Securing of legs 000
4. Inspection required 000
5. Helicopter deck 000
6. Compartmentation 000
7. Sounding pipes 000
8. Pumping arrangements 000
9. Openings in hull 000
10. Anchors 000
11Stowage of deck cranes 000
12 Signalling equipment 000
13 Navigation lights, sound signals and safety equipment 000
14 Damage control equipment 000
15 Additional recommendations 000
Lastly - The term I most
often use is….
UTMOST Good Faith:
Marine insurance contracts are “Uberrimae Fidel” Contracts or
contracts of Utmost Good Faith.
Hence, it is of very high importance for owners to have their vessel
“seaworthy” at the start of the voyage.
To a lawyer sea worthiness is an absolute mine field, they are still
discovering this term as we speak……..
any thoughts !
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
Thank You very much
By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI,
National Association of Marine Surveyors - USA ( NAMS-CMS)
International Institute of Marine Surveying - UK (Regional Director-Middle East)
Call : +971 50 8979103 : Website: www.marinesurveyordubai.com

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constellation marine surveyors dubai presentation on warranty and marine

  • 1. MARINE INSURANCE / WARRANTY  The Act  Principles  Warranties  Common Findings By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 www.marinesurveyordubai.com www.constellationms.com
  • 2. The Policy By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 3. The Marine Insurance Act, 1906 This act came into force on 1st January 1907. It did’nt make any new additions law but only codified the existing legal decisions which had been recorded up to that time. Marine insurance contracts are based on the principles laid down in this Act. By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : WWW.marinesurveyordubai.com
  • 4. THE PRINCIPLES OF MARINE INSURANCE Five basic principles of Marine Insurance  Insurable interest  Utmost Good Faith *  Proximate Cause **  Indemnity  Subrogation By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 5. THE PRINCIPLES OF MARINE INSURANCE Utmost Good Faith:  All contracts of marine insurance are contracts ‘Uberrimae fidei’ i.e. of the utmost good faith’.  …. and if the utmost good faith be not observed by either party, the contract may be voided by the other party. Marine Insurance Act 1906 By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 6. THE PRINCIPLES OF MARINE INSURANCE Proximate Cause (or ‘causa proxima’ ) is derived from the legal dictum ‘ causa proxima non remota spectatur’. This means that ‘the proximate and not the remote cause to be considered’. The Act provides that the insurer is liable for any loss proximately caused by a peril insured against. By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 7. Policy terms…. By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : www.marinesurveyordubai.com Ie: More than 50% crew out on shore leave and fire breaks on board. - Or - Master intoxicated and its proven negligence of Command  Failure of an insured to comply with a warranty, for whatever reason, may result in the underwriter avoiding claims under the contract, which means the vessel is,in effect, uninsured as from the moment of the breach of warranty. As an example ,a term of a standard hull policy is that the insured must exercise due diligence in looking after his vessel. If a claim is made for, say, damage to the vessel whilst laid up,and it was shown that he neglected the vessel and did not maintain her, dependent on the circumstances,t he policy may be avoided and no claim paid.
  • 8. Warranties A warranty is a promise made by the assured that a particular condition shall be fulfilled, or a particular thing shall be done or otherwise, or confirm / negates that existence of a particular state of facts. A warranty must be taken literally and must be exactly complied with by the assured. Any non compliance will lead to a breach of warranty and the insurer will be discharged from all liabilities under the policy from the date of such breach. By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 9. Warranties  By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 10. THE WARRANTY CLAUSES AND THEIR MEANINGS WARRANTIES IN MARINE INSURANCE POLICIES A warranty is the same as a “condition” on any other type of insurance policy. It is an express or implied contractual undertaking by the assured (the individual taking out the policy) that something will or will not be done. The assured undertakes that some particular thing shall or shall not be done or that some condition shall be fulfilled or he affirms or negates the existence of a particular state of facts.  A warranty must be literally complied with, whether material to the risk or not.  An express warranty is written into the policy or contained in some document incorporated in the policy by reference to it.  Implied warranties are not written in the policy but are implied by law to exist in the contract of insurance. They must be strictly complied with as express warranties. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 11. THE WARRANTY CLAUSES….  They may have reference specialised procedures or guidelines to be followed by the assured.  They may stipulate that the operation of the covered risk is always to be within the context of an approved operations manual.  They may require that the operation be overseen by a named third party whose professional competence and judgment is accepted by the underwriter as proof that it was carried out or will be carried out to agreed standards.  They may require that the competent third party issue a CERTIFICATE OF APPROVAL prior to the commencement of the operation in order for the insurance policy to become valid.  In addition the failure of the assured to abide by-the conditions of the CERTIFICATE OF APPROVAL may invalidate the contract of insurance. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 12. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East THE ROLE OF A WARRANTY SURVEY COMPANY These companies provide consultancy services to the marine and offshore industries as third parties (Constellation Marine being one of them) giving professional advice for fees. Their business success relies on their unquestioned integrity, high professional standards and expertise. Their business activities span both the insurance and marine industries and they vary in size from quite small to very large and diverse companies.
  • 13. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East OVERVIEW OF TYPICAL PRECAUTIONERY WORK  On-Site Evaluation at Departure Port Tug Approval Survey Barge Survey Cargo Securing Inspection Operational Survey  Jack-up Rig Move The example is a three-leg jack-up drilling unit (barge). It is presently located at position A where it is completing a workover on a platform and is to proceed to position B, a distance of about 150 nautical miles, where it is to perform an exploration drilling operation in an “open” location.. The client is the owner of the barge.
  • 14. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East TUGS AND TOWING GEAR  Practical knowledge required  Towing Vessel Requirement and Selection  Criteria – Minimum Towing Force – A well known warranty survey company requires that: Sufficient towing power is available to hold the vessel being towed at zero speed against the following conditions: Wind speed 44 knots Current speed 4 knots Significant wave height 25 feet  Determining the power of oilfield tugs
  • 15. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East SURVEYOR’S INSPECTION OF A TOWING VESSEL Inspection of the Vessel  The Towing Gear  Ancilliary Gear  Towing Machinery  Working Deck Area  At the Bow  Mooring Ropes  Machinery Spares  Bridge Area
  • 16. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East Following faults are grounds for outright rejection of OSVs/tugs for service: 1. Insufficient fuel, food, water, lubricating oil. 2. Main engine broken down, steering gear broken down, tow winch broken down. 3. Main or spare tow wire unserviceable due to being outside standard criteria for use either due to damage or under size or length. 4. Any main certificates out of date (including survey range dates). 5. Damaged/in-sufficient life saving firefighting equipment. Boat under-powered for service required. Does not meet bollard pull criteria. 8. Damaged and inoperative power generation machinery leaving only one generator. 9. Hull damage to boat such that stability criteria is impaired. 10. Contaminated fuel such that engine reliability is doubtful. 11. Tow Pennants, Towing Shackles, Towing Sprigs insufficient in number, insufficient in strength terms or damaged so as to be unserviceable. 12. Navigational equipment outfit including radar, gyro compass etc, inoperative or damaged or insufficient such that accurate position fixing and navigation is unreasonably difficult. 13. Incompetence of the master and officers such that lack of knowledge of towing and ship handling would imperil the operation. SURVEYOR’S INSPECTION OF A TOWING VESSEL -PRECAUTIONS-
  • 17. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East SURVEYOR’S INSPECTION OF A TOWING VESSEL The following areas are those where experience and judgement count “more than” rigid guidelines or meeting precise criteria: 1. The true condition of tow wires, pennants, stretchers and all other towing running gear. 2. The true condition of main engines and towing winches and steering gear. 3. The amounts of spare parts and tools/equipment for the repair of main engines and auxiliary machinery. Class society spares are the minimum required. 4. The knowledge and skill of the master, officers and crew. 5. Defects which are borderline cases can be judged on deciding how they affect the operation of the boat for the particular operation concerned and whether they can be rectified or mitigated. Charter’s (or) Operators are always in a desperate rush to get the vessel into the fields - Go to Reputable Operators
  • 18. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 19. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 20. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 21. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East
  • 22. www.constellationMS.com - BY Capt. Zarir Irani, MIIMS- RD- Middle East WARRANTY SURVEYORS REPORT AND RECOMMENDATIONS EXTRACTS Section Title Page No. 1. Documentation 000 2. Drilling derrick and blocks 000 3. Securing of legs 000 4. Inspection required 000 5. Helicopter deck 000 6. Compartmentation 000 7. Sounding pipes 000 8. Pumping arrangements 000 9. Openings in hull 000 10. Anchors 000 11Stowage of deck cranes 000 12 Signalling equipment 000 13 Navigation lights, sound signals and safety equipment 000 14 Damage control equipment 000 15 Additional recommendations 000
  • 23. Lastly - The term I most often use is…. UTMOST Good Faith: Marine insurance contracts are “Uberrimae Fidel” Contracts or contracts of Utmost Good Faith. Hence, it is of very high importance for owners to have their vessel “seaworthy” at the start of the voyage. To a lawyer sea worthiness is an absolute mine field, they are still discovering this term as we speak…….. any thoughts ! By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com
  • 24. Thank You very much By : Capt Zarir Irani, MBA, DipMarSur, FICS, FIIMS, AFNI, National Association of Marine Surveyors - USA ( NAMS-CMS) International Institute of Marine Surveying - UK (Regional Director-Middle East) Call : +971 50 8979103 : Website: www.marinesurveyordubai.com