Operational Joint Assured Policy

or Transport Operator’s

Liability Insurance Policy

TT Club Policy Book 2004

General Information

• This policy is valid from 6/6/2007 to 5/6/2008

• This policy covers:– Cargo Liabilities– Errors and Omissions– Third Party Liabilities– Fines and Duty– Costs– Discretionary Insurance

Transport

Operator Cover

T1 – Cargo Liabilities

T2 – Errors & Omissions

T3 – Third Party Liabilities

T4 - Fines & Duty

T5 - Costs T6 – Discretionary

Insurance

1- Definition/ cover / deductible2- NOT insured3- Approved Contracts4- Uninsured Subcontractors5- CIS6- Iraq7- Personal Effects8- Valuable Cargoes

1- Definition / Cover/ Deductible2- NOT insured

1- Definition / Cover/ Deductible2- NOT Insured3- Employees4- Equipment Sale5- Limit of Liability

1- Definition / Cover / Deductible2- NOT Insured3- Additional Clauses

1- Definition / Cover / Deductible2- Calculation of misdirection3- General Average and Salvation

Policy Conditions Clause

• To avoid rejection of a claim– KGLL should ensure that it does not fail at

any time to provide full and accurate material information

– Pays promptly any amounts due to TT Club

– Makes declarations immediately, whenever applicable

T1 - Cargo Liabilities Clause

• KGLL is insured for its liability for physical loss/damage of cargo and consequential loss arising from this.

• Deductible per accident US$ 2’500/-

• Limit per accident US$ 7’000’000/-

KGLL is NOT insured under this clause

• To the extent that KGLL’s liability is incurred/increased by:– A declaration of value by the customer– An incorrect statement in or omission from the bill of

lading– Package/unit enumeration in the subcontractor’s bill

of lading* for sea carriage which fails to correspond with the enumeration in KGLL’s bill of lading*

– For liabilities in respect of bullion, precious stones or cash/securities

– For liabilities arising from unexplained losses discovered on inventory/stocktaking

Approved Contracts

• KGLL is insured if its liabilities arise under a compulsory applicable transport law, or convention or a contract in KGLL’s approved contract schedule, if it is established by court or approved TT club.

Uninsured Subcontractors

• KGLL is not insured for liabilities on cargo carriage within:– Afghanistan– Iran– Lebanon– Syria– Yemen (entire territory)– Africa (except Republic of South Africa)– Commonwealth of Independent States (CIS)

Commonwealth of Independent States

• CIS are the eleven countries that were part of the former soviet republics;– Armenia / Azerbaijan / Belarus / Georgia / Kazakhstan

/ Kyrgyzstan / Moldova / Russia / Tajikistan / Ukraine / Uzbekistan

• Exception: If the subcontractor’s insurer or broker provides KGLL with a written confirmation that the first is fully insured on the date of the accident for its liabilities to KGLL under any contract and under any applicable mandatory law.

Additional Exceptions to CIS

• There are many other exceptions that can be provided to you on a case by case basis

• However, these exceptions shall NOT apply to the following territories:– Abkhazia / Chechnya / Dagestan / Ingushetia/

Kabardino Balkaria / Nagorno Karabakh / Ossetia (North & South) / Tajikistan

Iraq

• Iraq may be insured only if:– Carriage within Iraq is subcontracted– KGLL’s liability is limited to the amounts

recovered from the subcontractor– KGLL is merely an agent and may not be held

liable for any loss, damage or claim which does not directly arise from KGLL’s own negligent act or omission.

Personal Effects

• May be insured only if:– KGLL did not know that cargo contained

personal effects

– KGLL’s customer is a transport operator

– KGLL specifically offered in writing to arrange for cargo insurance

Special Limit: Valuable Cargoes

• Special Limit of US$ 200’000/- and deductible of US$ 2’500/- for each accident of:– Processed tobacco/tobacco products– Bottled spirits– Precious jewelry/precious metal– Valuable works of art– Thoroughbred horses– Computers/handheld electronic products/ mobile

telephones (and electronic components of these)

T2 - Errors and Omissions Liability Clause

• KGLL is insured for its liability for financial loss incurred by Customer arising from– Delay in performing its KGLL contractual obligations– Failure to perform, not arising from loss/damage to

cargo– The person entitled to delivery as per BoL arising

from delivery of cargo contrary to contractual obligation

– Physical loss/damage to cargo caused by incorrect statement or omission by KGLL.

• Limit per accident US$ 100’000/-• Deductible per accident US$ 2’500/-

KGLL is NOT insured

• If delay is caused by special instructions by customer• For KGLL own operational loss• Intentional and reckless conduct• Package enumeration• Valuable cargo• Approved contracts• Uninsured subcontractors• Iraq• Personal effects• Valuable cargo (special limits)

T3 – Third Parties Liabilities Clause

• KGLL is insured for its liability;– For physical loss/damage to 3P property– For death, injury or illness of any 3P– For liability of KGLL’s 3P to any of its 3P for

loss/damage and/or death or injury of 3P– To compensate 3P if KGLL’s liability arises out of a

contract• For lease/sale of equipment for use in KGLL’s insured

service• With KGLL’s subcontractor/venturer

• Limit per accident US$ 7’000’000/-• Deductible per accident US$ 2’500/-

KGLL is NOT insured under this clause;

• If the contract states that KGLL incurs liability without fault or negligence

• Liquidated damages• Death, illness and/or injury of KGLL employee• Which is covered by employer’s liability insurance• By using unlicensed vehicle• Arising from accident in USA/Canada

owned/leased chassis/trailer for use on public road

• In respect of KGLL handling equipment during its use by someone else

KGLL is NOT insured under this clause;

• In respect of KGLL equipment not insured for loss/damage

• As owner/lessee of land which is not insured• Arising from erection or dismantling of insured

handling equipment unless for maintenance, inspection or repair

• Arising from relocation of handling equipment outside the KGLL premises

• Which are contractual liabilities to compensate someone else for physical loss/damage to KGLL owned/lease property.

Employees

• Employees of KGLL are insured as long as they are assured by another insurance company.

Transfer of Interest in equipment under contract of sale

• Such sold equipments are insured only if:– TT agrees to insure the item directly before

the sale– Item is sold “as is where is”– New owner is only given right to quiet use– Expressly exclude any warranty, fitness of

use and merchantability– The accident occurs during KGLL’s period of

insurance

Limit of Liability

• Shall cover any third party in accordance with the minimum requirements under the applicable law for injury or death of a person or damage to property.

T4 – Fines and Duties Clause

• KGLL is insured for fines, penalties, duties, taxes and fiscal charges imposed on it by an authority due to confiscation of property including KGLL insured equipment. (carrying or handling equipment). This applies to:– Import/Export carriage of cargo, conveyance or equipment– Immigration– Safety at work– Security/anti-terrorism– Pollution (only if arising from physical loss/damage of cargo or

equipment)– Joint venturer/partners are insured for their liability arising from

KGLL’s failure to perform its contractual obligations

• Limit per accident US$ 100’000/-• Deductible per accident US$ 2’500/-

KGLL is NOT insured

• For Tariffs on companies• In respect of KGLL owner/leased equipment

which is NOT insured for loss/damage• For liability/confiscation arising from KGLL

making customs bond/guarantee available to another operator, unless arising from:– Assistance which the operator provides to KGLL in its

insured services, or– Insured services which KGLL provides to the

operator. • Intentional or reckless conduct (claims may be

reduced or rejected by TT)

The following clauses also apply:

• Valuable cargo (exclusions)

• Uninsured subcontractors

• CIS

• Iraq

• Valuable Cargo (Special Limits)

T5 – Costs Clause

• KGLL is insured for:– Mitigation (costs minimizing claims)– Investigation & Defense (including survey fees)– Disposal– Quarantine & Disinfection (including fumigation) – other than in

the normal course of business– Misdirection– General Average and Salvage– Uncollected Cargo= Costs by failure of consignee to collect

cargo – proceeds from such cargo – sums which can be recovered from someone else

– Completion of carriage (additional costs to normal expenses)• Limit per accident US$ 7’000’000/-• Deductible per accident NIL

Calculation of Misdirection

• Costs of carriage of cargo from the place where KGLL originally received them + cost of carriage to the place where it was misdirected – freight or other charges that KGLL would have paid for the normal course of carriage.

• Carriage will NOT be by air unless that was the original means of transportation or the TT agrees to the same.

• Deductibles: if costs arising from the above equation are less than 500$ then no claim will be accepted under this clause.

General Average and Salvation Guarantees

• TT may assist KGL in releasing cargo licenses for general average or salvage contributions, usually by: – Arranging for cargo underwriters to give necessary

guarantee, or– TT giving the guarantee directly

• When TT gives a guarantee KGLL will obtain:– A complete valuation form for the cargo– Prior to delivery of the cargo, counter security

acceptable to TT from the consignee or its cargo underwriters.

T6 – Discretionary Insurance

• KGLL is insured at the discretion of TT for the following;– Incidental to insured services– Interference of international organizations or

authorities (which TT considers unwarranted)– Where TT considers this to be its interests or

those of its members

• Limit per accident US$ 7’000’000/-• Deductible per accident NIL

Definitions

• Cargo: includes – Carrying equipment unless supplied by KGLL– Anything used for packing or securing goods

• Carrying Equipment:– container/ chassis / trailer / rolling stock /

genset / swap body / igloo– Anything else specified as carrying equipment

in your assets schedule.

• Insured Services: services set out on the KGLL certificate in respect of which TT has agreed that KGLL is insured;

Operations Trading Area Traffic Modes

Freight Forwarder

Haulage Operator

Logistics Operator

Warehouse Operator

Worldwide

Middle East

Middle East

Kuwait and Qatar

Air/Road/Sea

Road

Road

Excluded Cargoes

Personal effects (if more than 10% of turnover)

Bulk Cargo

Flexi tank

Project

• General Average and Salvage: sacrifice or expenditure to save property in a sea voyage, to which in principle, all owners of the saved property contribute proportionally.

• General: reduction of reimbursement of a claim because the value of equipment or property in KGLL declaration is less than its actual or new replacement value.

• Declaration: is a declaration of information which is to be provided by KGLL to TT in order to calculate the premium.

Thank you

&

Be Safe