Absent crew clause means insurers avoid liability
Andrew Jackson solicitors are warning that owners of fishing vessels should carefully check their insurance policies, particularly where the skipper and crew do not stay aboard, following a High Court case in which an insurer successfully avoided liability for fire damage in port.
The Resolute, a 21m steel stern trawler was damaged beyond repair in a fire at North Shields, England, on 11 December 2007. The vessel, usually based at Fleetwood, only had a small cabin and galley by way of living accommodation.
The vessel was all fast at 20:00 hours following a trip and, after landing the catch, etc., the skipper and crew went ashore. At about 22:20 hours, the skipper received a call to say the vessel was on fire. Subsequent investigation showed that the fire was probably due to an electrical fault with equipment in the galley.
The vessel was insured with Aigaion Insurance Company SA and one of the policy "conditions" stated: "Warranted owner and/or owner's experienced skipper on board and in charge at all times and an experienced crew member."
Insurers declined liability for the loss because this "warranty" had not been complied with. Not surprisingly, it was strenuously argued on behalf of the owner that the warranty should not be construed as applying in circumstances where the vessel was safely tied up in port. The vessel was restricted to 227 days at sea each year and the skipper and crew did not usually live on board.
The judge, however, found in favour of the insurers. He held the warranty did apply to the circumstances on the night in question. He accepted that as a matter of common sense, the warranty might not apply where the crew had to be ashore due to an emergency, or for instance to visit the harbour office, but there was no exception where the skipper and crew went ashore for leisure purposes. This was the case even though the judge accepted that it was reasonable for them to do so.
The judge suggested that the owner should consider claiming against his brokers for having negotiated an insurance policy with such an "obviously unsuitable" provision.
Warranties are critical provisions within a policy, because if they are not strictly complied with, insurers can avoid liability. Courts will usually try to interpret a warranty provision in favour of an owner, and the decision here does seem harsh - but it remains the law unless and until overturned in another case.
Owners should check their policies and make sure that they are being complied with, particularly where there are clauses requiring attendance of the skipper or other crew on board in port, or take steps to have them changed.