Class warranty (ship classification)

A twenty-year-old bulk carrier receives from her classification society a recommendation to repair a corroded area of deck before the end of June. The owner defers it, the deadline passes, class is suspended on July 1, and a fire in the engine room on July 14 destroys the ship. The hull insurer refuses to pay: the policy fell away with the class. The classification clauses of hull policies (the standard clauses of the Institute Time Clauses Hulls and their Nordic variants) make maintenance of class the essence of the insurance. The warranty comes down to four ideas. The ship must be classed with a society that is an IACS member or approved by the insurer. She must keep her class, up to date with annual, intermediate and special surveys. The society's recommendations must be carried out within the set deadlines. A change of class, suspension, withdrawal or expiry of class ends cover, automatically or at the insurer's initiative, unless prior written agreement is given. Since the Insurance Act 2015, under English law, a breach of warranty suspends cover for the time of the breach, instead of discharging it, and an insured who has remedied recovers cover for the future; for clauses meant to reduce a specific risk, it may also prove that the breach could not have influenced the loss. In a contract that terminates automatically, the effect is the same as before. The market reads the clauses closely at every renewal.