Beast from the East

The difficult ice conditions have forced many shipowners and charterers to carefully review insurance contracts and charterparty ice clauses. In this Insight, we take the opportunity to review the treatment of ice under Hull and Machinery terms and charterer’s liability policies.

Hull and Machinery insurance has always paid attention to the hazards of ice and underwriters have regulated their exposure through different ice related warranties and exclusions. There are permanently excluded areas, such as Arctic and Antarctic areas, where ice and navigational risks are very high due to such factors as multi-year ice, remoteness, inadequacy of charts, limited emergency response and extreme weather variations. There are also “conditional area” such as Gulf of St. Lawrence, Alaska, Sakhalin area and Baltic Sea, including Gulf of Bothnia and Gulf of Finland, where policy terms allow trading on terms agreed by the underwriter. Below, we will be looking at the treatment of conditional areas. For more information about operating in the Arctic region see Gard’s article about the Polar Code.