Attachment L - Insurance Affirmation.pdf

OPERATION & MAINTENANCE

Attachment L Insurance Affirmation

Offeror confirms that it understands and will comply with the requirements of Sections H-5 and H-6 of RFP N00033-12-R-3333 as reflected below.

Signature of Offeror’s Authorized Representative

Printed Name

Date

H-5 INSURANCE (MSC JUL 2009)

(a) During the period commencing with the delivery and terminating with the redelivery of each vessel subject to this contract, the contractor shall secure Protection and Indemnity (P&I) marine insurance coverage (including full four-fourths (4/4s) collision liability and pollution liability coverage), Passenger and Crew, Passenger, P&I War Risks, and Second Seamen's War Risk coverage on each vessel. The P&I insurance shall cover all liabilities (other than liability for loss of or damage to Government cargo carried onboard the vessel) in an amount no less than $3,050,000,000 per vessel per incident. If, at any time during the period of contract performance, the contractor's insurer is NOT prepared to guarantee coverage in the amount of $3,050,000,000, the contractor shall provide written evidence of coverage from another insurer(s) whereby they agree to provide coverage up to this limit. Notwithstanding this overall coverage, the limit for Passenger & Crew liabilities shall be no less than $1,500,000,000 per vessel per incident; the limit for Passenger liabilities shall be no less than $1,000,000,000 per vessel per incident; the limit for pollution from oil and hazardous substances shall be no less than $1,000,000,000 per vessel per incident; and the limit for P&I War Risks shall be no less than $250,000,000 per vessel per incident. War Risk Second Seamen's coverage shall be at least equal to coverage provided under the U. S. Department of Transportation, Maritime Administration Second Seamen's War Risk Policy (1955 Standard Form) including coverage of no less than $200,000 per crewmember for loss of life.

(b) The contractor's obligation to the United States to obtain Second Seamen's coverage shall not confer any third-party beneficial interest to crewmembers and is not a personal entitlement.

Because the vessels subject to this contract are Government-owned and are not covered by a Hull & Machinery (H&M) policy, the contractor is required to secure War Risk P&I coverage for the underlying vessel value (normally covered by a H&M policy) as well as excess of the vessel value up to the limits stated above. To the extent that the insurance provider requires the contractor to provide the notional value of the vessel, the value of each vessel subject to this contract is $30,000,000.

(c) The insurance policy obtained by the contractor shall require the insurance provider to give the Contracting Officer written notice at least seven days in advance in the event the war risk portion of the insurance is cancelled.

(d) Except as provided herein, the contractor shall be responsible for the cost of such insurance, including deductibles, premiums, additional premiums, calls, commissions, advancements, assessments, and overspill claims where applicable. The contractor is responsible for deductibles even if a loss or claim against insurance arises from or is related to any fault, neglect, action, or inaction by the Government.

(e) The contractor must submit evidence of insurance to the Contracting Officer that meets the requirements set forth in this clause prior to contract award. The Contractor shall also provide copies of the insurance policies or certificate of entry, whichever is applicable, upon renewal.

(f) The cover note MUST name the United States as an Assured or Additional Assured under the insurance policies, and indicate the risks insured (including full four-fourths (4/4s) running down clause-collision liability coverage and fixed and moveable objects coverage). The cover note must state the amount of coverage, insurance deductibles (if any), and exclusions (if any) for basic P&I, pollution coverage, P&I War Risk, Passenger and Crew, Passenger, and Second Seamen's War Risk coverage.

(g) The cover note must also contain the following statement from the insurance provider:

“The terms or conditions of insurance contained in this cover note or document shall govern and shall be controlling in the event that there are any inconsistent terms or conditions in the applicable insurance provider rules or insurance policy.

Underwriters agree to waive any rights of subrogation against the United States in all cases, regardless of cause. The United States shall not be liable for (and there shall be no recourse against the United States for) deductibles, premiums, additional premiums, calls, commissions, advancements, assessments, or overspill claims. It is understood that the vessel(s) does not have Hull & Machinery insurance. It is understood that any disputes between the insurer and the United States will be governed by U.S. law, and will be adjudicated in a U.S. Federal Court. The United States has not consented to the arbitration (either domestic or foreign) of any disputes.

It is understood that the insurer is not granted a lien on the covered vessel(s) under any circumstances.”

(h) Before commencement of contract performance, the Contractor shall provide the Contracting Officer with a current copy of all insurance cover notes, policies and binders, a current paper copy of the P&I Club rule book if using a P&I Club or the equivalent from a fixed-premium provider, and such other documentation covering each vessel subject to this contract as is necessary to establish that the required insurance coverage is in full force and effect. The Contractor shall provide the Contracting Officer with a timely copy of any revised or reissued cover notes, policies, or binders. Each year, the Contractor shall also provide the Contracting Officer with a paper copy of the annual P&I Club rule book or the equivalent from a fixed-premium provider.

(i) The Government shall retain such risks of property loss or damage to each vessel subject to this contract and associated fixtures, as would be covered by an American Hull Institute policy (Attachment E to the RFP). The Government shall also retain the risk of property loss or damage to any Government cargo loaded on each vessel subject to this contract. The Contractor shall notify the Contracting Officer of all incidents within the scope of such coverage by the most expeditious means within six hours of the discovery of the incident, and shall provide amplifying information when required. The Contractor shall submit claims for reimbursement for repairs and other expenses, pursuant to the Government’s undertakings, to the Contracting Officer in accordance with applicable billing instructions. Mark any such claim as an “Insurance Claim.”

(j) As an operator of public vessels of the United States, the Contractor may become involved in litigation maintainable against the United States under the Public Vessels Act, 46 U.S.C. §§ 31101-31113. Section 31103 of the Act incorporates the “not inconsistent” provisions of the Suits in Admiralty Act, 46 U.S.C. §§ 30901-30918. It is understood that under this contract, and by law (28 U.S.C. §§ 501-530), the Attorney General of the United States and designated U.S.

Department of Justice Attorneys have ultimate control over any resulting litigation on behalf of the United States.

(k) The Contractor shall provide the Government with immediate notice of any legal action, libel in admiralty, or claim of any nature whatsoever, brought against the Government, any Vessel subject to this contact, the Contractor, or the Contractor's underwriters arising during the performance of, or as a result of this contract. The Contractor shall also provide the Government with immediate notice of any legal action brought by the Contractor that arises from, or is related to the performance of this contract. Such notice shall include copies of any summons and complaint or of any notice to show cause, notice of motion, or notice of petition which may be brought, made, or filed in any District Court of the United States or in any other court purporting to have jurisdiction thereof; and such notice shall be sent by the fastest mail service provided by the United States Postal Service to:

Director, Torts Branch - Civil Division Aviation & Admiralty Office U.S. Department of Justice P.O. Box 14271 Washington, D.C. 20044-4271 and

Military Sealift Command ATTN: Code N00L 914 Charles Morris Court, SE Washington Navy Yard, D.C. 20398-5540 [telephone (202) 685-5160]

(l) Thereafter, at the direction of the Contracting Officer, the Contractor will at its own expense refer claims, notices of legal action, or libels in admiralty, brought against the Government, any Vessel subject to this contact, or the Contractor, arising during the performance of, or as a result of this contract, to the insurer for adjudication and defense. The Contractor will at its own expense fully cooperate with and support the insurer with information and necessary assistance during the adjudication of claims and the defense of any legal actions. The Contractor shall ensure that its underwriters and its attorneys cooperate with Government counsel in maintaining the defense of any such action or application for relief. Attachment D to the RFP provides instructions and guidelines on the required liaison between private and Government counsel, which guidelines shall be strictly observed. Any and all costs of complying with Attachment D shall be borne solely by the Contractor or its underwriters.

(m) The Contractor shall not terminate the insurance without the Contracting Officer's prior written approval and shall promptly notify the Contracting Officer of any pending change or potential cancellation of the insurance.

(n) WAR RISK. Operating limits of vessels subject to this contract shall be worldwide. THE CONTRACTOR SHALL IMMEDIATELY NOTIFY THE GOVERNMENT (i) whenever any sailing orders will result in a vessel subject to this contract being sent beyond the limits of the American Institute Trade Warranties or of War Risk Trading Warranties of applicable policies (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 applicable policies (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 Government under this contract. The contractor shall ensure that the insurers provide it relevant information in a timely manner. If the Contractor has given this required notice to the Government, the Government will reimburse the Contractor for the increase in costs (if any) of insurance premiums, charges, or deductibles which arise from the vessel sailing beyond the applicable 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 Government. The issuance of sailing orders, by itself, does not constitute approval in advance by the Government. The Government may give the Contractor 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 clause entitled Government War Risk Insurance/Indemnity (H-6).

(o) The Government shall have the right to require the Contractor to secure additional insurance to cover different types of risks, or to change the dollar amount of existing insurance coverage.

In such event, the Contractor shall exercise its best efforts to obtain such additional insurance coverage at reasonable rates and in any event, the Contracting Officer's approval is required prior to final placement of the insurance. The cost of such additional risk coverage shall be for the Government's account.

(p) The attention of the Contractor is called to those portions of the Performance Work Statement, which require the use, training, transportation, and storage of firearms and explosives.

H-6 GOVERNMENT WAR RISK INSURANCE/INDEMNITY (MSC JUL 2009)

(a) General - Upon receipt of notice and instruction from the Contracting Officer, as specified in Section H-5, 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 Contractor’s commercial War Risk coverage, the Contractor 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 contractor shall accept the Government’s indemnity or War Risk insurance, whichever is applicable, in lieu of such commercial War Risk insurance. The Contractor 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 Contractor shall retain the same risks, such as deductibles (if any), that it has under its commercial insurance.

(b) 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 each 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 Contractor’s commercial marine War Risk trading warranties, and which are designated by notice from the Contracting Officer to the Contractor.

(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.

(c) 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 Contractor against loss from risks that would be covered by MARAD war risk coverage as set forth in subparagraph (b) above.