5.1 Introduction
A prerequisite for cover under the Nordic Marine Insurance Plan is that the peril results in a casualty that causes a loss for the assured. The purpose of this chapter is to further define the term “loss” for hull insurances, and thus go into detail regarding the covered losses caused by faulty material and error in design.
The discussion regarding hull insurance will be twofold, as it consists of both cover of damage in accordance with Chapter 12 and total loss in accordance with Chapter 11.
The starting point of the discussion is the scope of Cl. 12-4, to be discussed in Chapter 5.2, as this is the most central clause regarding losses caused by error in design and faulty material. Due to the consolidating structure of the Nordic Marine Insurance Plan, the regulation in Cl. 12-4 also affects the cover for total loss. Thus, Cl. 12-4 is central in understanding the structure and logic of the Nordic Marine Insurance Plan when it comes to losses caused by error in design and faulty material.
Due to the complexity of Cl. 12-4, the discussion will be divided in several parts. Firstly, the concept of damage will be discussed in Chapter 5.2.1, followed by a discussion about the term “part” and class approval in Chapter 5.2.2. Lastly, the economic extent of cover in accordance with Cl. 12-4 will be discussed in Chapter 5.2.3.
The discussion regarding damage under the hull insurance and Cl. 12-4 will be followed by a discussion about the losses covered under the hull insurance for total loss in Chapter 5.3.