Date: Mon, 13 Sep 2004


From: "Edna Cox" <>

Subject: S/C Compulsory Insurance - Athens Cc:



Dear Erik,


We note the support given by BankServe Insurance Services Ltd (Graham Barnes) to the position set out in the letter which you kindly circulated to the Correspondence Group on 26th July, and comment further only in relation to the suggestion that "$900 million War P&I cover is currently available in the insurance markets that could be guaranteed".

Regrettably, it is not, and it could not.


It is correct that the British War Risks clubs provide $500 million War P&I liability cover (separate from the cover provided for the hull value), but this cover is restricted to British shipowners. There are few shipowners in this category, and even fewer who are passenger ship owners or operators.

Indeed, some War Risks clubs decline to accept entries of passenger vessels.


One non-British War Risks club, the Hellenic War Risks Club, has a limit of $400 million on its War P&I cover, and is, as its name suggests, limited to the Greek market.


The War Risk P&I liabilities covered by the International Group of P&I Clubs ($400 million excess of hull value or War Risk policy limit, whichever is the greater, for terrorism risks, and $20 million for bio-chem risks) is available only after the underlying War Risk cover has been exhausted. Accordingly, although it is technically possible to envisage a situation in which a British shipowner entered in a War Risks club and an International Group P&I Club has the benefit of "terrorism" cover of $900 million, the limited availability of that cover tends to make this a limited solution to the global problem. Moreover, it touches not at all on the "bio-chem" problem, in respect of which the exclusion affects the whole market, including the War Risks clubs.


BankServe Insurance Services Ltd also advise that "such a War policy is be (sic) limited to the insured value of the ship". It would be more accurate to say that such a war risks policy may be limited to the insured value of the ship, since different policies from different providers have varying limits and different scales for different risks.


Against this background we are driven back to the increasingly obvious solution, namely the inclusion of "acts of terrorism" (including the effects of bio-chemical weapons) in the Protocol's war risks exception (Article 3).

On this basis, we would welcome the views of Member States on the points raised in our previous letter.


I would be most grateful if you would circulate this message to the Correspondence Group.


Lloyd Watkins





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