ABSTRACT
This chapter investigates the consequences of the Polar Code (PC) for the insurance of ships sailing within the geographic area regulated by the code. The discussion includes hull insurance, loss-of-hire insurance and liability insurance. The question is to what extent the insurance applies to polar waters and, if it does, to what extent the insurer may invoke breach of the PC as a reason for refusing liability in case of a casualty. The results are somewhat different for hull and loss-of-hire insurance, which is governed by the Nordic Marine Insurance Plan (NP), and P&I insurance, which is governed by international P&I conditions. As a starting point, the NP provisions on trading limits exclude polar waters from cover, which means that vessels sailing in these waters do not have ordinary hull and loss-of-hire insurance. The risks that have generated the need for the PC are considered too high to be covered under ordinary NP conditions. The shipowners can, however, obtain cover in this area with special conditions on premium, deductibles and warranties, and/or special safety regulations. In addition, the assured will have to comply with the PC Part I-A as safety regulations according to the ordinary NP conditions. Under this regime, the insurer may invoke breach of the PC if the assured is negligent and there is causation between the breach and the casualty. Further, NP contains rules on part liability in case of combination of causes. P&I insurance, on the other hand, applies as a starting point to polar waters, but the insurance conditions contain provisions on compliance with statutory rules, hereunder the PC Part I-A and II-A. The sanction against a breach of the PC is stricter than that of the NP, as there is no requirement for negligence or causation and no partial liability for combined causes. This means that the Nordic tradition with safety regulations is a more assured-friendly approach than the P&I conditions, which follows the UK warranty approach. The Nordic view is that safety regulations provide a more fair and flexible solution than the use of warranties.
