Wreck Removal & Role of Protection & Indemnity Club

 

Wreck Removal & Role of Protection & Indemnity Club

When does a ship become a wreck

• A ship becomes a wreck for insurance purposes when, following a casualty, it becomes an actual total loss (atl), or a constructive total loss (ctl).
• Constructive total loss refers to damage to property that is calculated to be greater than the insurance limit when reviewing restoration or repair as options. it might even be assessed that the cost of restoration or repair can exceed the value of the property.
• An actual total loss refers to complete destruction of insured property to the point where it is completely ruined, has irreparable damages, cannot be recovered, or the owner cannot access it in any way. this type of loss would usually be claimed for the maximum coverage.  
  
  
  
• Under the norwegian marine insurance plan a vessel is considered a ctl when the cost of repair exceeds 80 per cent of the insurable value, or 80 per cent of the value of the ship after repairs if the latter is higher than the insurable value.
• Before the hull insurer accepts that the vessel is a total loss and abandons her to the owner, she is not a wreck for purposes of p&i insurance and any removal order is the concern of the hull underwriter rather than the owner (and his p&i club).

What is ‘’Blue Cards’’

 

• International P&I Clubs issuing “Blue Cards” as proof of the necessary financial security required by other maritime conventions dealing with liability and compensation (i.e. International Convention on Civil Liability for Oil Pollution Damage the “CLC,” and International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, or the “Bunkers Convention”).
• All International Group P&I Clubs are able to issue "blue cards" which will enable members to obtain the Wreck Removal Convention Certificates which must be carried on board in order to comply with compulsory insurance requirements of the Convention. The Certificates must be issued by a State which is party to the Convention.

P&I / IG P&I club V/S Wreck Removal

• In P&I Club a member is covered for costs and expenses in raising, removal and demolition, lighting and marking of the wreck of the entered ship provided the owners are legally liable to do so.
  
  
  
• The International Group of P&I Clubs shares claims that exceed USD 5 million under what is known as a “pooling agreement”.