ABSTRACT
Section 3-14 of the NMIP 1996 spells out the defence available to the insurer in case of loss of class or change of the classification society of the insured vessel. In order to clarify the extent of the insurer’s defence, sub-para 3 sets out what is deemed as a ‘loss of class’. Accordingly, loss of class occurs where the assured, or someone on his behalf, requests that the class be cancelled, or where the class is suspended,67 or withdrawn for reasons other than casualty.68 In the event of a loss of class or change of classification society, by virtue of sub-para 1, the insurance terminates automatically, although cover would remain in effect until the ship reached port. It has been expressly stated, in the same sub-paragraph, that the insurance cover will not terminate, if the insurer expressly consents to the change in the vessel’s class status.
