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Insurance Matters 2020

The ICS Insurance Committee’s raison d’être is to liaise with the London commercial hull insurance and war risks markets.

Ferry navigates through Islands

Liaison with other major insurance markets, in Europe and Asia, is also maintained, not least through regular contact with the International Union of Marine Insurance (IUMI), which represents the global marine insurance industry.

ICS engagement with marine insurers is of great importance. This ongoing dialogue, which has been maintained over many years, irrespective of the state of the market, provides a useful forum for consultation and discussion, and is valued by insurers and by ICS.

While discussion of issues of scope of cover and how marine insurers assess risk is of particular importance to both parties, in recent years the commercial insurance sector has shown increased interest in engaging at IMO and in other, more political, intergovernmental debates. Topics recently on the agenda for discussion with ICS have therefore included matters as wide ranging as environmental, social and governance risks in marine underwriting, assessment of risk for the London Market Joint War Committee’s Excluded Areas, and the insurance implications of the IMO 2020 sulphur cap.

The ICS Insurance Committee also informs ICS positions with regard to salvage matters and recently confirmed its support for a new iteration of the Lloyd’s Open Form (LOF), and accompanying arbitration clauses, which were launched in January 2020.

ICS remains a staunch supporter of LOF which, with its standard agreed terms, avoids the need to negotiate in
emergency situations. ICS believes it is also in shipowners’ interests for salvors to be encouraged to accept LOF, and for the salvage industry to remain viable and competitive. Accordingly, it is considered important that LOF remains the default contract for use in genuine emergency situations when time is of the essence so that the provision of salvage services is not delayed.

In 2020, ICS and OCIMF will be publishing a new edition of their guidance to Masters on Peril and Salvage at Sea, which will highlight the use of LOF.