Schedule Part 12 - Insurance

Policies to be taken out by CFL and maintained during the Grant Period

  1. Hull & Machinery Insurance
    • Insureds
      • CFL
      • Scottish Ministers

each for their respective rights and interests in the Agreement.

  • Insured Property

Any Vessel and/or craft under 25 years of age used for or in connection with the Agreement.

  • Coverage
    • Institute port risk clauses including limited navigation but amended to exclude collision liability and protection and indemnity.
    • Institute additional perils clause or equivalent.
    • Institute war and strikes clauses hulls time or equivalent including war. War risks protection and indemnity up to hull values.
  • Sum Insured

At all times for such minimum amount (each Vessel or craft) as shall be agreed between Scottish Ministers and CFL but CFL may, with the agreement of Scottish Ministers, insure, as part of this Agreement, for such greater amount as CFL shall consider prudent or appropriate taking into account current ship prices and/or ship construction costs.

  • Territorial Limits

United Kingdom inland and territorial waters and voyages between, extended to cover all waters outside territorial limits necessary within the scope of the Agreement but no wider than institute trading warranties.

  • Period of Insurance

From the Commencement Date and throughout the Grant Period renewable on an annual basis unless otherwise agreed between the Parties.

  • Cover Features and Extensions

Waiver of subrogation rights against Scottish Ministers.

  • Principal Exclusions
    • Nuclear/radioactive risks.
    • Chemical, biological, bio-chemical, electro-magnetic weapons and cyber-attack exclusion.
  • Maximum Deductible Threshold

Not to exceed 2% of value.

  1. Protection and Indemnity Insurance
    • Insureds
      • CFL
      • Scottish Ministers on a mis-directed arrow co-assured status

each for their respective rights and interests in the Agreement.

  • Insured Property

Any Vessels and/or craft used for or in connection with the Agreement for which the Insured may be responsible.

  • Interest

Legal liability of the Insured (including claimants’ costs and expenses) in respect of:

  • death or bodily injury to or sickness of any person;
  • loss or damage to property;
  • removal of wreck;
  • pollution

arising out of the ownership or operation of Vessels and/or craft used for or in connection with the Agreement happening during the Period of Insurance plus provision to include other Cover Features and Extensions as appropriate.

  • Limit of Indemnity

Not less than (in respect of any one occurrence, the number of occurrences being unlimited);

  • USD4 Billion - general
  • USD1 Billion – oil pollution
  • USD 100,000,000 – liabilities and expenses caused by oil pollution during salvage operations whether they arise in respect of the insured Vessel and/or craft.
  • USD 14,000,000 – tank cleaning (specialist operation (Vessel specific)) and where such cover has been agreed by insurers in writing upon such terms as insurers may require.
  • USD 4,000,000 – contractual liability (Vessel specific) and where such cover has been agreed by insurers in writing upon such terms as insurers may require.
  • USD 15,000,000 – specialist operations (Vessel specific) and where such cover has been agreed by insurers in writing upon such terms as insurers may require.

or such other amount or amounts as are available from clubs that are members of the international group of protection and indemnity clubs.

  • Territorial Limits

United Kingdom inland and territorial waters and voyages between, extended to cover all waters outside territorial limits necessary within the scope of the Agreement but no wider than institute trading warranties.

  • Period of Insurance

From the Commencement Date and throughout the Grant Period renewable on an annual basis unless otherwise agreed between the Parties.

  • Cover Features and Extensions
    • International ocean towage agreement (TOWCON) in un-amended form so as not to increase the liability of the insured vessel. Not United Kingdom standard towage conditions.
    • Contractual liability (Vessel specific) and where such cover has been agreed by insurers in writing upon such terms as insurers may require.
    • Liability to persons being carried on board insured vessels.
    • Specialist operations (Vessel specific) and where such cover has been agreed by insurers in writing upon such terms as insurers may require.
    • Balance 3/4ths collision liability included.
  • Principal Exclusions

Nuclear/radioactive risks.

  1. Marine Property Damage “All Risks” Insurance
    • Insureds
      • CFL
      • Scottish Ministers

each for their respective rights and interests in the Agreement.

  • Insured Property

Any marine property of whatsoever nature or description associated with and used for or in connection with the Agreement.

  • Coverage

“All Risks” of physical loss, destruction or damage to the Insured Property from any cause not excluded.

  • Sum Insured

At all times an amount not less than the total reinstatement or replacement value of the Insured Property plus provision to include other Cover Features and Extensions as appropriate.

  • Territorial Limits

Worldwide.

  • Period of Insurance

From the Commencement Date throughout the Grant Period renewable on an annual basis unless otherwise agreed between the Parties.

  • Cover Features and Extensions
    • War risks whilst waterborne
    • Collision liability, removal of wrecks salvage whilst waterborne
    • Automatic reinstatement of sum insured
    • Replacement/reinstatement basis of claims settlement with cash option for non-reinstatement.
    • Waiver of subrogation rights against Scottish Ministers.
  • Principal Exclusions
    • Nuclear/radioactive risks.
    • Wear, tear and gradual deterioration.
    • Chemical, biological, bio-chemical, electro-magnetic weapons and cyber-attack exclusion.
  • Maximum Deductible Threshold

Not to exceed 2% of value, subject to a maximum of £100,000 each occurrence.

  1. Marine Third Party Liability Insurance
    • Insureds
      • CFL
      • All sub-contractors of any tier employed in connection with the Agreement

each for their respective rights and interests in the Agreement.

  • Interest

Legal liability of the Insured to pay damages (including claimants’ costs and expenses) in respect of:

  • death or bodily injury to or sickness, loss of sight, anguish or shock whether mental or otherwise, or illness or disease contracted by any person;
  • loss or damage to property;

happening during the period of insurance and arising out of or in connection with the Agreement.

  • Limit of Indemnity

Not less than £50,000,000 in respect of any one occurrence or series of occurrences arising out of one event, the number of occurrences being unlimited in any annual policy period plus provision to include other Cover Features and Extensions as appropriate.

  • Territorial Limits

Worldwide

  • Period of Insurance

From the Commencement Date throughout Grant Period renewable on an annual basis unless otherwise agreed between the Parties.

  • Cover Features and Extensions
    • Full contractual liability
    • Third party property in care, custody and control of an Insured
    • Cross liability clause
    • Waiver of subrogation rights against Scottish Ministers
    • Indemnity to principal’s clause under which Scottish Ministers shall be indemnified in respect of claims made against Scottish Ministers in respect of death or bodily injury or third party property damage arising out of or in connection with the Agreement and for which CFL is legally liable.
  • Principal Exclusions
    • Liability for death, illness, disease or bodily injury sustained by employees of the Insured arising out of the course of their employment.
    • Liability arising out of the use of mechanically propelled vehicles whilst required to be compulsorily insured by legislation in respect of such vehicles.
    • Liability in respect of predetermined penalties or liquidated damages imposed under any contract entered into by the Insured.
    • Liability arising from seepage and pollution unless caused by a sudden unintended, unexpected and accidental occurrence.
    • Nuclear/radioactive risks.
    • War and related perils.
    • Chemical, biological, bio-chemical, electro-magnetic weapons and cyber-attack exclusion.
  • Maximum Deductible Threshold

Not to exceed £150,000 each occurrence or series of occurrences arising out of any one event. 

  1. Compulsory Insurances (including Employers Liability Insurance and Motor Vehicle Third Party Liability Insurance)

CFL is required to meet United Kingdom statutory insurance obligations in full. Insurances required to comply with all statutory requirements relating to the Agreement including, but not limited to, United Kingdom employers' liability and motor third party liability insurances.

Compulsory insurances shall contain an indemnity to principals clause or additional insured equivalent.