All Entries in the "Sea" Category
Conclusion
• Perform a thorough risk assessment on whether armed guards are needed • Contact your Flag State authority • Use due diligence when selecting a PSC • Provide draft PSC services agreement to your P&I Club (at least 10 days before execution) • Have your other insurers (H&M, War Risks, etc.) review and approve the [...]
Arguments against the use of armed guards
• Inability to ensure qualities or standards of PSCs (rent-a-cops) • Not enough qualified guards to go around • Unregulated industry • IMO, IG, BIMCO and Intertanko do not recommend use of weapons • Private contracts make it easier for PSCs to evade compliance with applicable laws leaving shipowners to be ultimately responsible • Uncertainty [...]
Arguments for the use of armed guards
• Complementary solution to multinational naval coalition • Creates a “harder” target for pirates • ICS press release acknowledged benefit of using PSCs • Shipowners should retain all options to deter piracy attacks, defend its crews and vessel • Armed security is preventive measure to avoid high costs associated with post-hijacking efforts (negotiators, ransom, rescue [...]
Shipowner’s right to limit liability
• Include language that specifically reserves this right • Indemnity or “knock for knock” provisions may be deemed to act as a waiver of this fundamental right • To be on the safe side, request the following provision to be included in PSC contract: “Notwithstanding anything to the contrary herein, nothing shall restrict, prevent or [...]
Contractual indemnities
• American Club 2011-2012 Rule Book, Class I, Rule 3, Section 2(8) excludes cover for: “There shall be no right of recovery from the Association in respect of . . . liabilities, costs and expenses which would not have arisen but for the terms of a contract or indemnity entered into by a Member, unless [...]
Contractual provisions that might prejudice P&I cover
• “Knock for Knock” clauses – each party agrees to be responsible for loss / damage to its own property, and injury / death to its employees • Indemnity provisions – broad-sweeping indemnities can be disguised as Knock for knock – read them carefully! • Avoid clauses containing exceptions for “reckless” or “grossly negligent” conduct [...]
PSC’s insurance cover
• Request PSC’s Insurance Cover Note • General third party, public, professional liability insurance to an appropriate level • Maritime employers liability / workers compensation • Personal accident, medical expenses, hospitalization, emergency evacuation and repatriation insurance • Make sure there are no limitations, restrictions, etc., on PSC’s cover • PSC should not be added as [...]
Weapons : licensing issues
• Owner’s obligation to make sure any weapons carried on board are properly licensed • Port of embarkation of guards, transit (canal authorities), coastal states, anchorage / mooring, port of disembarkation • National laws of the country where the security company is based • Many of the top recipient ports for U.S. food aid – [...]
Weapons to be used by PSC – P&I policy exclusions
American Club 2011-2012 Rule Book, Class I, Rule 3, Section 1 provides: “There shall be no right of recovery from the Association in respect of any liabilities, costs or expenses … when the incident giving rise to the liability, cost or expense was caused by the following: Mines, torpedoes, bombs, rockets, shells, explosives or similar [...]
Criteria for selecting security company
PSC selection criteria – see IMO guidance to shipowners • General – company structure, financial position, extent of insurance cover, senior management experience, ISO accreditation • Background Information – maritime experience, written procedures, understanding of Flag State and coastal State requirements on licensing / carriage of firearms, familiarity with BMP3 and Somalia based piracy threat, [...]
