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Presentation to Houston Marine Insurance Seminar 2009 Barbara Jennings Tuesday 22 September 2009

Presentation to Houston Marine Insurance Seminar 2009 Barbara Jennings Tuesday 22 September 2009. Interface between CAR insurance and Contractors’ Liability Coverages . Agenda. how does P&I insurance work? how does it fit with CAR insurance? how do we handle the gaps between P&I and CAR?.

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Presentation to Houston Marine Insurance Seminar 2009 Barbara Jennings Tuesday 22 September 2009

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  1. Presentation to Houston Marine Insurance Seminar 2009Barbara JenningsTuesday 22 September 2009

  2. Interface between CAR insurance and Contractors’ Liability Coverages

  3. Agenda • how does P&I insurance work? • how does it fit with CAR insurance? • how do we handle the gaps between P&I and CAR?

  4. P&I – what do we cover…..?

  5. P&I – what don’t we cover? • “non-mutual” risks are excluded • IG agreement limits access to pool by reference to: • type of ship • type of work • type of contract

  6. Exclusions:when is a ship not a ship?

  7. Exclusions: what does “a ship” do?

  8. Exclusions:liabilities under contract Oil company/ operator Construction company Installation contractor Marine contractor

  9. Why are these risks “non-mutual”? • disproportionate assets at risk • contractual issues • owners’ traditional defences not available

  10. P&I insurance: how can we cover “non- mutual” risks? • insured through individual clubs • lower limits and higher cost • reinsured in the market • rated as marine risks

  11. P&I insurance: how can we cover “non- mutual” risks? • “non-marine” risks excluded • OEE/EED type risks • “contract works” and failure to perform

  12. How does P&I insurance fit with CAR? • cover for the entered FPSO: • subsea installation • liabilities iro the FPSO from sailaway • hook-up/commissioning

  13. P&I cover during subsea installation • the installation spread • ships, ROVs, divers • mutual P&I cover • includes pollution from ship, wreck removal

  14. P&I cover for the installation spread • exclusions - non-entered ships ü - liabilities arising during specialist operations ü - contract worksû

  15. P&I cover for the FPSO • mutual P&I • liabilities during tow to field ü • wreck removal of FPSO ü • pollution from FPSO ü • loss of/damage to FPSO û

  16. How does P&I insurance fit with CAR?

  17. P&I cover duringhook-up and commissioning • FPSO is a production risk • P&I to US$ 1 billion • pollution from FPSO ü • wreck removal of FPSO ü • loss of/damage to the FPSO û • subsea pollution û • contract works û

  18. P&I cover duringhook-up and commissioning Club covers liabilities this side of the PLEM FPS not covered FPSO and anchoring system covered Risers covered up to, but not including PLEM Wellhead/ PLEM not covered Anchors

  19. P&I insurance – the interface with CAR • P&I helps maximise capacity • effective coverage of risks • pollution/ ROW cover • contracts paramount • CAR/OEE/EED risks always excluded • are there any gaps….?

  20. P&I and CAR – the gaps • contractual issues • unequal bargaining power • cascading deductibles • weakened indemnities • insurance provisions

  21. P&I and CAR – the gaps • contract works/project property? û • wreck removal • entered ship ü • contractor’s other equipmentû • other debrisû

  22. ? P&I and CAR – the future

  23. The Standard Setting the standard for service and security www.standard-club.com Authorised and regulated by the Financial Services Authority of the United Kingdom

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