Attachment_L-5_Insurance_Affirmation.doc

TIME CHARTER

Attachment L-5 Insurance Affirmation

Offeror confirms that it understands and will comply with the requirements of Sections H-1, H-2, and H-3 of RFP N00033-12-R-2002 as reflected by the signature and by the initials next to paragraphs H-1.2.2.2, H-1.2.3.1, and H-1.3.3 below.

Signature of Offeror’s Authorized Representative Printed Name

Date H-1 Insurance.

H‐1.1 Vessel Owner’s Insurance.

H‐1.1.1 During the full period of this Charter Party, Owner shall maintain marine insurance coverage on the Vessel, including:

i.

Hull and Machinery, ii.

Protection and Indemnity (P&I), iii.

War Risk Hull and Machinery, iv.

War Risk Protection and Indemnity (P&I), and v.

Second Seaman’s War Risk.

Except as otherwise expressly provided in Section H‐1.1.3 below or as expressly provided in the section entitled “War (H‐2),” all expense for such insurance coverage (including but not limited to premiums, additional premiums, calls, commissions, overspill claims, advancements, assessments, deductibles, and all other insurance costs regardless of Charterer or Owner fault, neglect, action or inaction, or cause of claim or cost whatsoever) shall be for Owner’s account and shall be deemed to be included in the hire payable under this Charter Party. Within 10 calendar days following award of this contract, Owner shall provide the Contracting Officer copies of policies or cover notes evidencing that required coverage has been obtained and demonstrating that the coverage is consistent with the requirements of this section. Owner shall make insurance claims under applicable policies for all damages, injuries, or claims arising from or related to this charter when directed by Charterer regardless of Charterer’s fault, neglect, action, inaction, or breach of clauses, obligations or warranties (express, implied or otherwise) of this charter contract.

H‐1.1.2 Owner shall obtain an endorsement on all of Owner’s insurance policies listed in Section H-1.1.1 by which Owner’s Insurer “waives all rights of subrogation against the United States of America up to an amount of $350,000,000.”

H‐1.1.3 If Vessel is sent beyond the limits of American Institute Trade Warranties under this Charter Party, the Charterer agrees to reimburse the Owner for the actual extra cost of additional premiums and/or increased deductible levels to the extent such extra cost is occasioned by the Vessel’s trading beyond such limits. Vessel Owner shall immediately notify Charterer whenever any sailing orders will send the Vessel beyond such limits, shall identify to Charterer any anticipated additional cost of insurance relating thereto, and shall obtain Charterer’s approval to proceed outside such limits prior to doing so. If Owner fails to provide the notifications required or to obtain Charterer’s informed prior approval, Charterer shall not be required to reimburse the Owner for the costs described in this paragraph. The issuance of sailing orders, by itself, does not constitute approval in advance by Charterer.

H‐1.1.4 All policies shall contain an endorsement stating that “in the event Insurer receives from Vessel Owner any notice of cancellation or any notice of material change to the policy or its coverage, the cancellation or change shall not be effective until 30 days after written notice thereof is provided to Charterer’s Contracting Officer by the Insurer.” Additionally, Owner shall immediately notify Charterer of any change whatsoever in coverage.

H‐1.2 Charterer Named Additional Assured on Owner’s Hull Policy, War Risk Hull Policy, and Second Seaman’s War Risk Policy.

H‐1.2.1 The United States of America (as Charterer) shall be named as an additional assured with waiver of subrogation under the Vessel Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and Second Seaman’s War Risk policy. Within 10 calendar days following award of this contract, Owner shall provide the Contracting Officer copies of cover notes evidencing that the required coverage has been obtained.

H‐1.2.2 “Other than owner” and “as owner” limitations. If Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and/or Second Seaman’s War Risk policy contain(s) any provision limiting coverage under the policy only to liabilities arising as owner of the vessel, Owner shall arrange for such limiting provision to be stricken from the policy.

H‐1.2.2.1 If Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and/or Second Seaman’s War Risk policy contain(s) any provision designed to limit the effect of striking “other than owner” and/or “as owner” provisions as required in Section H‐1.2.2, such provisions shall also be amended to ensure Charterer is provided full benefit of the insurance for its acts as Charterer.

H‐1.2.2.2 In the event Owner fails to strike “other than owner” and/or “as owner” provisions per Section H‐1.2.2 or fails to amend supplemental limiting provisions as described in Section H‐1.2.2, Owner shall indemnify Charterer for all liability which would have been covered by Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and/or Second Seaman’s War Risk policy had such provisions been stricken or amended as required.

H‐1.2.3 Limitations of Coverage to U.S. Limitation of Shipowners’ Liability Act (or similar) limitation amounts. If Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and/or Second Seaman’s War Risk policy contain(s) any provision(s) limiting maximum payment to Owner in any instance to the amount to which Owner is able to limit Owner’s liability pursuant to the U.S. Limitation of Shipowners’ Liability Act of 1851, the 1976 Convention on Limitation of Liability for Maritime Claims, or any similar law, Owner shall arrange for such limiting language to be stricken or amended to ensure the policy or policies are not similarly limited in payment or coverage amount with respect to coverage afforded the United States of America as additional assured Charterer.

H‐1.2.3.1 In the event Owner fails to amend provisions limiting payment or coverage as described in Section H-1.2.3, Owner shall indemnify Charterer for all liability which would have been covered by Owner’s Hull and Machinery policy (and Increased Value policy if applicable), War Risk Hull and Machinery policy, and/or Second Seaman’s War Risk policy had such provisions been amended as required.

H‐1.3 Time Charter Protection and Indemnity (P&I) with P&I War Risk Coverage.

H‐1.3.1 Owner shall obtain a Time Charterer Protection and Indemnity policy/entry with P&I War Risk coverage for the United States of America (as Charterer) with coverage amount of $350,000,000 and covering all risks typically covered by Time Charterer Protection and Indemnity entries with P&I War Risk coverages in Protection and Indemnity associations which are members of the International Group. Except as otherwise expressly provided in the section entitle “War,” all expense of such policy/entry described in this section (including but not limited to premiums, additional premiums, calls, commissions, overspill claims, advancements, assessments, deductibles, and all other insurance costs regardless of Charterer or Owner fault, neglect, action or inaction, or cause of claim or cost whatsoever) shall be for Owner’s account and shall be deemed to be included in the hire payable under this Charter Party. Within 10 calendar days following award of this contract, Owner shall provide the Contracting Officer a copy of the policy. Owner shall make insurance claims under the Time Charterer Protection and Indemnity policy/entry described in this section when directed by Charterer.

H‐1.3.2 Charterer shall not be obliged to declare to the insurer all ships chartered by it, and Charterer’s entry/policy shall be so endorsed if required by insurance association rules.

H‐1.3.3 Owner shall not, through action or by failure to act, vitiate or void the coverage afforded by the Time Charterer Protection and Indemnity policy/entry with P&I War Risk coverage (including but not limited to failing to meet all conditions of the policy, causing through action or inaction cessation of the policy, or violating any warranty of the policy). If the policy is vitiated or voided by Owner’s action or failure to act, Owner shall indemnify Charterer for all liability which would have been covered by the Time Charterer Protection and Indemnity policy/entry had such policy remained in full force and effect.

H‐2 War.

H‐2.1 Voyage Instructions. Operating limits of the vessel subject to this contract shall be worldwide. If the Vessel is ordered under this Charter Party to any port, place, or zone involved in a state of war, warlike operations or hostilities, civil strife, or piracy (whether there be a declaration of war or not) where it might be reasonably expected to be subject to capture, seizure, arrest, or hostile act by a belligerent power (whether de facto or de jure), pirate, or terrorist, it shall be unreasonable for the Owner not to prosecute said voyage if insurance against said risks is then available commercially or under a Government program, or if the Government offers the Owner indemnification against said risks pursuant to Public Law 85‐804.

H‐2.2 The Vessel Owner shall immediately notify the Charterer: (i) whenever any sailing orders will result in a vessel subject to this contract being sent beyond the limits of the War Risk Trading Warranties of insurance policies required under this contract (to include entry into a war risk exclusion zone or when the vessel will enter, sail for, or deviate towards the territorial waters of any of the Countries or places, or any other waters described in the Lloyd’s Joint War Committee’s current List of Areas of Perceived Enhanced Risk); (ii) if there are any changes to the War Risk Trading Warranties of insurance policies required under this contract (including changes to the exclusion zones or the List of Areas of Perceived Enhanced Risk) or changes to War Risk premiums, charges, or deductibles; or (iii) whenever additional premium charges or costs will be incurred as a direct result of compliance with any sailing orders issued by the Charterer under this contract. The Owner shall ensure that the insurers provide it relevant information in a timely manner. If the Owner has given this required notice to the Charterer, the Charterer will reimburse the Owner for the increase in costs (if any) of insurance premiums, charges, or deductibles which arise from the vessel sailing beyond the applicable War Risk Trading Warranties (including changes to the war risk exclusion zones) when entry into any exclusion zone or Area of Perceived Enhanced Risk under such insurance has been approved in advance by the Charterer. The issuance of sailing orders, by itself, does not constitute approval in advance by the Charterer. The Charterer may give the Owner notice and instructions concerning suspension of commercial War Risk insurance coverage and substitution of Government indemnity or Government War Risk insurance as detailed in the section entitled “Government War Risk Insurance/Indemnity” below.

H‐2.3 Additional Wage Costs. The Charterer shall reimburse Owner for the cost of provable additional master and crew wages (including all additional bonuses and payments required) to the extent that such additional costs arise directly from exposure of the Vessel, and/or Vessel’s master and crew, to the risks described in the paragraph entitled “Voyage Instructions” above. However, any of said wages or payments shall not exceed in amount that which would be payable, under applicable laws and regulations, to U.S. civil service mariners in the employ of the Military Sealift Command in a similar port, place, zone, or route. Owner shall notify Charterer of all anticipated additional wage costs prior to entering any location which would trigger such additional costs; and no such costs shall be reimbursable unless Charterer, after notification of such costs, provides approval to enter such location.

H‐3 Government War Risk Insurance/Indemnity.

H‐3.1 General. Upon receipt of notice and instruction from the Contracting Officer, as specified in the last sentence of Section 2.2 of the section entitled “War (H‐2)” above, with respect to any area excluded by the War Risk Trading Warranties or included by the Lloyd’s Joint War Committee on the Hull War, Strikes, Terrorism and Related Perils Listed Areas (also known as Listed Areas of Perceived Enhanced Risk) under the Owner’s commercial War Risk coverage, the Owner shall, as soon as practicable, contact its insurance brokers or underwriters and arrange for the suspension of its commercial War Risk insurance upon entry of the vessel into, or extension of stay of the vessel in such area(s), or when the vessel will enter, sail for, or deviate towards the territorial waters of any of the Countries or places, or any other waters described in the Lloyd’s Joint War Committee’s current Listed Areas of Perceived Enhanced Risk, as the case may be, subject to resumption of its commercial War Risk insurance upon exiting such area(s). In such instances, the Owner shall accept the Government’s indemnity or War Risk insurance, whichever is applicable, in lieu of such commercial War Risk insurance. The Owner shall ensure that the suspension of its commercial War Risk coverage is coincident with the time that any Government indemnity or War Risk insurance becomes effective, and shall likewise ensure that its commercial War Risk insurance is resumed at the time when any Government indemnity or War Risk insurance becomes ineffective. The Owner shall retain the same risks, such as deductibles (if any), that it has under its commercial insurance.

H‐3.2 Government War Risk Insurance. Under the authority of 46 U.S.C. § 53905, the United States Maritime Administration (MARAD), at the request of Commander, Military Sealift Command, may furnish the following war risk insurance coverage, which will be effective during the vessel’s transit under this Contract in areas which are in war risk exclusion zones, or waters described in the current Lloyd’s Joint War Committee Listed Areas of Perceived Enhanced Risk, or otherwise excluded under the Owner’s commercial marine War Risk trading warranties, and which are designated by notice from the Contracting Officer to the Owner:

(1) War Risk Protection and Indemnity insurance covering all liabilities up to an amount of $250,000,000;

(2) War Risk Second Seaman’s coverage, the principal sum of which shall be $200,000 per Crew Member for loss of life.

H‐3.3 Government Indemnity. Under the authority of Public Law 85‐804 (72 Stat. 972, August 28, 1958) and Executive Order 10789, as amended by Executive Order 11610, the Secretary of Defense or the Secretary of the Navy may authorize the Contracting Officer to indemnify the Owner against loss from risks that would be covered by MARAD war risk coverage as set forth in the paragraph entitled “Government War Risk Insurance” directly above.

Attachment L-5