Terms of Ship Insurance

The subject matter of this insurance is the ship, including its hull, lifeboats, machinery, equipment, instruments, rigging, fuel and stores.

This insurance is divided into Total Loss and All Risks Total Loss

This insurance covers the total loss of the insured ship due to:

1. Earthquake, Volcanic Eruption, Lightning, or other natural disaster;

2. Stranding, collision, touching of any fixed or floating object or other object or other marine disaster;

3. Fire or explosion;

4. theft by violence or piracy from outside the ship;

5. abandonment of cargo;

6. malfunctioning or accident of a nuclear device or nuclear reactor.

7. This insurance also covers total loss of the insured vessel caused by;

accidents during loading, unloading or movement of cargo or fuel;

potential defects in the ship's engine parts or hull;

malicious acts of the master and crew against the interests of the insurer;

negligent acts of the master and crew and the pilots, repairers and charterers;

the negligent acts of the master and crew and the pilot, repairers and charterers;

the negligent acts of the insurer and the charterers. negligent acts of the Master;

action of any governmental authority for the purpose of preventing or mitigating pollution caused by damage to the Insured Vessel as a result of a Covered Risk.

Provided that the cause of such loss shall not be due to the failure of the Insured, the Owner or the Manager to exercise due diligence.

All Risks

This insurance covers the total loss and partial loss expenses of the insured vessel resulting from the above causes, as well as the following liabilities and expenses:

Collision Liability

1) This insurance shall cover the insured's legal liability arising from the insured's collision with any other vessel, or from the contact of the insured's vessel with any stationary or floating object or other object.

But this clause shall not be liable for:

a. bodily injury or sickness;

b. cargo or property carried by the insured vessel or liability for its undertaking;

c. removal of obstructions, wreckage, cargo or any other article;

d. pollution contamination of any property or object (including the cost of precautions or removal) ) except pollution or contamination of another vessel or property carried on board such other vessel which is in collision with the insured vessel.

e. Consequential costs of delay or loss of use of any fixed, floating or other objects.

2) When both parties to a collision between the insured ship and another ship are at fault, the indemnity under this article shall be calculated on the basis of cross-liability, except where the liability of one or both shipowners is limited by law. This principle also applies when the insured ship collides with an object.

3) The liability of the insurer under this clause (including legal costs) is in addition to its liability under the other clauses of this insurance, provided that its liability in respect of each collision shall not exceed the sum insured in respect of the vessel.

***Same Sea Damage and Salvage

(1) This insurance shall be responsible for indemnifying the insured vessel against ****same sea damage, salvage, and the apportioned portion of the cost of salvage. In the event of a ****same sea loss sacrifice of the insured ship, the insured shall be entitled to receive full compensation for such loss without first exercising his right to claim his share from the other parties.

(2) ***Same sea loss shall be adjusted in accordance with the provisions of the relevant contract or applicable law or practice, or, if the contract of carriage does not so provide, in accordance with the provisions of the Beijing Adjustment Rules or other similar rules.

(3) When all contributing parties are the Insured or when the Insured's Vessel is sailing empty and there is no other contributing party in interest, *** the same shall be adjusted in accordance with the Beijing Adjustment Rules (except for Article 5) or similar rules expressly agreed upon as if the contributing parties were not the same person. The voyage shall be from the port or place of origin to the arrival of the insured vessel at the first port other than the port of refuge or refueling, and shall be terminated if the scheduled voyage is abandoned at the said port of embarkation.

Salvage

(1) The insurer shall pay the reasonable expenses incurred by the insured in preventing or minimizing the loss for which compensation is payable under this insurance in respect of the loss of the vessel or the vessel being in peril as a result of a covered risk. This section shall not apply *** to the same sea loss, salvage or salvage expenses, nor to expenses otherwise provided for in this insurance.

(2) The liability of the insurer under this section is in addition to the liability provided for elsewhere in this insurance, but shall not exceed the sum insured of the vessel.

Additional Insurances

Additional Insurances on Ship Insurance is an insurance policy that insures against loss of freight earned by the carrier in the operation of the ship. The freight is paid to the carrier by the consignee after the goods arrive at the port of destination. If the goods cannot be delivered to the port of destination for any reason, the carrier will not be able to collect the freight. For this reason, carriers often take out additional insurance for freight together with marine insurance during the voyage of paid freight. At present, there is no freight rider insurance in the terms and conditions of China's ship insurance. Special additional insurances for ships are mainly war and strike insurances. This insurance shall not cover loss, liability or expense arising from:

(i) unseaworthiness, including improper manning, rigging or loading, to the extent that the insured knew or ought to have known of such unseaworthiness at the time of sailing of the vessel;

(ii) negligence or wilful act of the insured and its representatives;

(iii) normal wear and tear, rust, corrosion, damage, or loss of life or property of the vessel, which ought to have been detected by due diligence on the insured; and

(iv) any other loss or damage which is not covered by this insurance, including loss of life or property of the vessel. (iv) normal wear and tear, rust, decay or poor maintenance, or defective materials including the replacement or repair of parts in bad condition;

(iv) the extent of liability covered and excluded by the Company's War and Strike Insurance Provisions. (i) Partial compensation for loss due to a covered risk, less the policy deductible per occurrence (excluding claims for collision liability, salvage, *** damage, and salvage).

(ii) Claims for loss of a separate voyage between two connecting ports caused by inclement weather shall be deemed to be one accident.

This section shall not apply to claims for total loss of the ship and reasonable expenses incurred exclusively for inspection of the bottom of the ship after it has run aground. Unless the insurer's prior consent and acceptance of the modified conditions of cover and the additional premium to be paid are obtained, this insurance shall not cover loss and liability arising from;

(i) the insured vessel being engaged in towing or salvage services;

(ii) the insured vessel being engaged in the direct loading and unloading of cargo at sea with another vessel (not a small vessel used in a harbor or along the coast) including approaching, drawing near and departure;

(iii) voyages of the insured vessel for the purpose of shipbreaking or for the purpose of shipbreaking for sale. This insurance is divided into term insurance and voyage insurance:

(1) Term insurance: the term is up to one year. The starting and ending time is subject to the date stated in the insurance policy. Upon expiration of the insurance, if the insured vessel is still under voyage or in danger or docked at port or intermediate port, the insurance shall continue to be responsible until the vessel arrives at the port of destination after prior notification of the insurer by the insured and payment of the premium on a daily pro rata basis. In the event of total loss of the insured vessel during the extended period, an additional premium of 6 months shall be payable.

(2) Voyage insurance: the voyage specified in the policy shall prevail. The starting and ending time shall be as follows:

1. Non-cargo carrying vessel: from the time of untying or anchoring at the port of origin to the time of anchoring or tying up at the port of destination.

2. Cargo-carrying ships: from the time of loading at the port of departure to the time of discharge at the port of destination. However, it shall not exceed a maximum of 30 days from midnight on the day the vessel arrives at the port of destination. (i) This insurance shall automatically terminate once the insured ship has been paid as a total loss.

(ii) This insurance shall automatically terminate when the classification society of the Vessel is changed, or the class of the Vessel is changed, canceled or withdrawn, or the ownership or flag of the Vessel is changed or transferred to a new management, or the bareboat is chartered out or requisitioned or expropriated, unless prior written consent of the Insurer has been obtained, except that the Vessel is laden with cargo or is on a sea voyage and may, on request, be delayed until the Vessel's arrival at the next port or final port of discharge or port of destination.

(c) In the event of any breach of the provisions of this policy in respect of cargo, voyage, sailing area, towage, salvage work or sailing date, the insured shall notify the insurer of such breach immediately upon receipt of such information and agree to accept the revised conditions of cover and the additional premium to be paid, and the insurance shall continue to be in force, otherwise this insurance shall automatically terminate. (i) Term Insurance: The premium shall be paid in full at the time of underwriting. If the insurer agrees, the premium may also be delivered in installments, but in the event of a total loss of the insured vessel within the underwriting period, the undelivered premium shall be paid immediately.

This insurance may be refunded under the following circumstances:

1. In the event of surrender of the insured vessel or termination of the insurance, the premiums shall be refundable to the insured from the date of termination of the insurance, which may be computed on a daily basis on the basis of the daily ratio of the net premiums. However, this paragraph shall not apply to Article 6 (3).

2. If the insured ship, whether or not repairing or loading or unloading cargo at a shipyard, is berthed for more than 30 days in a port or area agreed to by the insurer, the premium for the period of berthedness shall be calculated at 50% of the daily ratio of the net premium, but this paragraph shall not apply to the ship in the event of a total loss. If this paragraph for a period of mooring in excess of 30 days is split between two consecutive policies of the same insurer, the mooring refund shall be calculated separately on the basis of the number of days covered by the two policies.

(ii) Voyage Insurance:

No surrender or refund shall be made from the commencement of the insurance liability. (i) The insured shall notify the insurer within 48 hours of an accident or loss to the insured ship, or if the ship is abroad, immediately notify the nearest insurance agent, and take all reasonable measures to avoid or minimize the loss covered by this insurance.

(ii) The taking of steps by the Insured or the Insurer to avoid or minimize a loss covered by this insurance shall not be deemed a waiver or acceptance of the commission or prejudice to any other rights of the parties.

(iii) The Insured shall obtain the prior consent of the Company when determining with the parties concerned the liability and expenses to be borne by the Insured Vessel.

(iv) When the insured seeks compensation for the loss, the insured shall hand over the necessary documents to the insurer and assist the insurer in recovering the loss from the third party, if the liability or expense of the third party is involved. (i) When the insured ship is damaged and is to be repaired, the insured is to act like a careful uninsured shipowner and tender for the repair of the damaged ship in order to accept the most favorable offer.

(2) The insurer may also tender or request re-tendering for the repair of the ship, and when such tender is accepted with the consent of the insurer, the insurer shall indemnify the insured against the payment of fuel, materials, and wages and sustenance of the master and crew from the date of the notice of tender given at the request of the insurer to the time of acceptance of the tender. However, such compensation shall not exceed 30% of the insured value of the ship for the year.

(c) The insured may decide where the damaged ship is to be repaired and if the insured fails to act like a careful uninsured shipowner, the insurer shall be entitled to exercise its right of veto over the place of repair or repairer decided by the shipowner, or to deduct from the indemnity any increase in the cost thereby incurred. (i) This insurance shall not pay if the insured fails to provide the insurer with the relevant claim documents within two years after the occurrence of the insured accident or loss.

(ii) Total Loss

1. If the insured vessel is totally destroyed or seriously damaged beyond restoration or if the insured inevitably loses the vessel, it shall be treated as an actual total loss and compensated according to the insured amount.

2. If the insured ship has not been informed of its whereabouts for more than two months after the expected date of arrival at the port of destination, it shall be regarded as an actual total loss and compensated according to the insurance amount.

3. When the actual total loss of the insured ship seems to be unavoidable, and the cost of restoration, repair and salvage, or the sum of these costs exceeds the insured value, the ship shall be deemed to be a constructive total loss after notice of commissioning has been given to the insurer, and shall be indemnified in accordance with the insured amount regardless of whether or not the insurer accepts the commissioning. If the insurer accepts the assignment, the subject matter of this insurance shall belong to the insurer.

(C) Partial Loss

1. No deduction will be made for claims for sea loss under this insurance on a new-for-old basis.

2. The insurer shall not be liable for claims for descaling, or painting of the bottom of the vessel, unless directly related to the repair of the marine damage.

3. When the shipowner makes necessary repairs to make the ship seaworthy or normally enters a dry dock, the insured ship shall also be required to enter the dock for repairs in respect of the covered damage, and the cost of the time spent in and out of the dock shall be equally apportioned.

If the Vessel is required to be docked for repairs only in respect of damage covered by this insurance, the Insurer shall not deduct the cost of docking time payable by the Insured for inspections or other repairs while the Vessel is in dock, provided that the Insured's repairs do not prolong the time that the Insured Vessel is in dock or increase the cost of use of any other dock.

(iv) This insurance shall not reimburse the insured for time and labor expended by the insured in obtaining and furnishing information and documents, nor for the commissions and expenses of any manager, agent, management or agency, etc., appointed by or acting in the name of the insured, except with the consent of the insurer.

(v) Where the sum insured is less than the agreed value or less than *** the amount apportioned for the same sea loss or salvage expenses, the insurer's indemnity in respect of the losses and expenses covered by this insurance shall be calculated in the proportion which the sum insured bears to the agreed value or apportioned amount.

(6) Collision or salvage between the insured ship and a ship owned by the same owner or operated by the same management organization shall be deemed to be the same as a third-party ship, for which this insurance shall be liable.