ITC-Hulls 1/10/83 Explained, Clause by Clause

Clause 6 is where the money is. Everything else in Institute Time Clauses (Hulls) 1/10/83 either qualifies clause 6, prices it, tells you what happens when you break some other part of the bargain, or measures the indemnity once clause 6 has been satisfied.

The form runs to twenty-six clauses and dates from October 1983. It has been superseded twice on paper, by ITC-Hulls 1/11/95 and then by the International Hull Clauses 01/11/03, and it is still the form most likely to be attached to a hull placing in this region. Owners renew on it every year without ever reading past the schedule.

What follows is the form in order, with what each clause actually does to you when something goes wrong.

Key Facts: ITC-Hulls 1/10/83

What is ITC-Hulls 1/10/83? The Institute Time Clauses (Hulls) dated 1 October 1983, catalogue reference CL.280, a standard hull and machinery wording originally issued by the Institute of London Underwriters and now maintained through the International Underwriting Association. It insures the vessel for a period of time rather than for a voyage.

Which clause contains the insured perils? Clause 6, split into clause 6.1 for the traditional marine perils and clause 6.2 for the additional perils known in the market as the Inchmaree cover. The due diligence proviso attaches to clause 6.2 only, not to clause 6.1.

How much collision liability does the form cover? Three-fourths, under clause 8.1, calculated on the principle of cross-liabilities under clause 8.2.1 where both vessels are to blame and neither is limiting, and capped by clause 8.2.2 at three-fourths of the insured value of your own vessel for any one collision.

What happens if you do not give notice of a claim? Clause 10.4 imposes a deduction of 15% from the amount of the ascertained claim for failure to comply with the conditions of clause 10. That is a fixed deduction, applied whether or not underwriters were prejudiced.

When does the policy terminate automatically? Clause 4 terminates cover automatically on change of Classification Society, or change, suspension, discontinuance, withdrawal or expiry of class, and on change of ownership or flag, transfer to new management, charter on a bareboat basis or requisition for title or use, unless underwriters agree otherwise in writing.

Where do war risks sit? Outside the form. Clauses 23 to 26 exclude war, strikes, malicious acts and nuclear perils, and cover is bought back separately under Institute War and Strikes Clauses (Hulls, Time) CL.281, whose clause 5.1 allows either side to cancel on 7 days notice.

For the liability side that sits alongside this form, see what P&I insurance is. For the underlying statute the form is written against, see the Marine Insurance Act 1906, and for the product itself see hull and machinery insurance.

The shape of the form

The twenty-six clauses fall into four groups. Clauses 1 to 5 set the conditions on which the insurance stays alive, and clauses 6 to 13 create and qualify the cover itself.

After that the form turns to money. Clauses 14 to 22 measure the indemnity once a claim has attached, and clauses 23 to 26 take four categories of risk out entirely.

Reading the form in that order makes it far easier to follow, because it explains why the deductible sits at clause 12 rather than near the front and why sue and labour sits immediately after it.

Clauses 1 to 3: navigation, continuation and breach of warranty

Clause 1 gives the vessel leave to sail or navigate with or without pilots, to go on trial trips and to assist and tow vessels in distress. It also deals with towage and salvage undertakings, which is where owners engaged in offshore or harbour work should slow down, because the clause restricts customary towage and puts contractual towage on a different footing.

Continuation follows at clause 2. If the vessel is at sea and in distress or missing at expiry, cover continues at a pro rata monthly premium until she arrives at her next port in safety, provided prior notice is given to underwriters.

Held cover for breach of warranty comes next, at clause 3, and it catches breaches as to cargo, trade, locality, towage, salvage services or date of sailing. It is conditional on giving notice immediately after receipt of advices and agreeing any amended terms and additional premium that underwriters require. The practical effect is that a breach is survivable if you tell your broker the moment you know, and fatal if you do not.

Clause 4: the clause that cancels your policy without a letter

Clause 4 is the most operationally dangerous provision in the form because it works automatically. No notice is served, no premium is refused, and the cover simply stops.

Two limbs matter. The class limb terminates cover on change of Classification Society, or on change, suspension, discontinuance, withdrawal or expiry of class, with a carve-out where the vessel is at sea, in which case termination is deferred until arrival at her next port. The ownership limb terminates on change of ownership or flag, transfer to new management, charter on a bareboat basis, or requisition for title or use.

Clause 4 also states that it prevails notwithstanding any inconsistent provision written, typed or printed in the insurance. A broker's clause elsewhere in the slip does not quietly override it.

For owners in Malaysia and Singapore this bites in two ordinary commercial situations. Selling a vessel mid-policy, and putting one out on bareboat charter. Both are routine, both terminate cover under clause 4, and both are fixable with a written agreement from underwriters obtained before rather than after.

Clause 5 is the assignment clause and requires a dated notice of assignment endorsed on the policy before underwriters will recognise it. Financiers with a mortgage over the vessel care about this clause far more than owners do.

Clause 6: the perils, and the due diligence proviso

Clause 6 does the work. It divides into two sets of perils with materially different conditions attached.

The proviso reads that such loss or damage must not have resulted from want of due diligence by the assured, owners or managers. It qualifies clause 6.2 and leaves clause 6.1 alone, which is why the classification of a casualty as a peril of the seas or as an accident in cargo operations can decide the whole claim.

The name attached to clause 6.2 comes from the 1887 House of Lords decision in the Inchmaree case, where a donkey engine damaged by a valve that had been left closed was held not to have been damaged by a peril of the seas. The market's answer was to write the additional perils in expressly, and they have been in every hull form since.

One point catches owners out at the machinery survey. Clause 6.2.2 covers loss or damage caused by a latent defect, which in practice means the damage the defect produces rather than the defective part itself. If you want the cost of the part, that is what the Institute Additional Perils Clauses (Hulls) CL.294 are for, and they are bought as an extension rather than assumed.

Clause 7 is the pollution hazard provision. It covers loss of or damage to the vessel caused by any governmental authority acting to prevent or mitigate a pollution hazard resulting from damage to the vessel for which underwriters are liable, again subject to the due diligence of the assured, owners or managers. It is not pollution liability cover, and owners who read it as such are reading their P&I entry into their hull policy.

Clause 8: three-fourths collision liability

Clause 8.1 indemnifies you for three-fourths of any sum you become liable to pay for loss of or damage to any other vessel or property on any other vessel, delay to or loss of use of any other vessel or property on her, and general average, salvage or salvage under contract of any other vessel or property on her.

Where both vessels are to blame and neither is limiting liability by law, clause 8.2.1 sets the calculation on the principle of cross-liabilities. The cap follows at clause 8.2.2, holding underwriters to three-fourths of the insured value of your vessel in respect of any one collision, and legal costs incurred with underwriters' prior written consent are covered at the same three-fourths under clause 8.3.

Read clause 8.4 twice. It removes from hull cover any sum paid for removal or disposal of obstructions, wrecks, cargoes or any other thing whatsoever; any real or personal property other than other vessels and property on them; the cargo, other property on, or the engagements of the insured vessel; and loss of life, personal injury, illness, pollution or contamination other than to the colliding vessel and property on her.

Every item in clause 8.4 is a live exposure and every item belongs to the club rather than to the hull underwriter. The boundary is mapped exposure by exposure in P&I against hull and machinery.

Clause 9 handles the sistership problem. If your vessel collides with, or receives salvage services from, another vessel wholly or partly in the same ownership or management, you have the same rights as if the other vessel belonged to entirely different owners, with liability and quantum referred to a sole arbitrator agreed between underwriters and the assured. Fleet operators moving cargo between their own vessels rely on this clause more often than they realise.

Renewing your hull cover this year?

Send us the expiring slip and we will tell you which form you are actually on, what the deductible structure does to your loss record, and where the 1/11/95 and IHC 2003 alternatives would change your position. Use the quote request form or message us on WhatsApp.

Clause 10: notice of claim and tenders

Clause 10.1 requires notice to underwriters prior to survey where an accident may result in a claim, and also to the nearest Lloyd's Agent if the vessel is abroad, so that a surveyor can be appointed to represent underwriters if they wish.

Control over where the work is done sits at clause 10.2, which gives underwriters the right to decide the port to which the vessel proceeds for docking or repair and a veto over the place of repair or the repairing firm.

Underwriters may also take tenders, or require further tenders to be taken, for the repair of the vessel under clause 10.3. Where a tender is accepted with their approval, an allowance is made at 30% per annum on the insured value for the time lost between the invitation to tender and its acceptance, with credit given for amounts recovered in respect of fuel, stores, wages and maintenance over the same period.

Then comes the sanction. Failure to comply with the conditions of clause 10 attracts a deduction of 15% from the ascertained claim, under clause 10.4.

That 15% is not discretionary and it is not linked to whether underwriters suffered any prejudice. On a substantial machinery damage claim it is a large number, and it is entirely avoidable by making one telephone call before the surveyor boards.

Clause 11: general average and salvage

Clause 11 covers the vessel's proportion of salvage, salvage charges and general average, reduced in respect of any under-insurance. Adjustment is according to the law and practice obtaining at the place where the adventure ends, unless the contract of affreightment provides otherwise, in which case it follows the contract.

The under-insurance mechanic is the part that costs money. Where the insured value is less than the contributory value, the claim is scaled down in the same proportion, so a vessel insured below her sound market value carries a general average shortfall that nobody discovers until the average adjuster issues the statement.

Most adjustments in this trade are drawn on the York-Antwerp Rules 2016, though the 1994 and 2004 sets are still incorporated in older charterparties and bills of lading. Confirm which set your contract of affreightment names before assuming.

Clause 12: the deductible

Clause 12.1 provides that no claim arising from a peril insured against is payable unless the aggregate of all such claims arising out of each separate accident or occurrence exceeds the deductible in the schedule, in which case the excess is payable. The clause does not apply to a claim for total or constructive total loss, nor to an associated sue and labour claim under clause 13 arising from the same accident.

The heavy weather aggregation rule sits at clause 12.2: damage by heavy weather occurring during a single sea passage between two successive ports is treated as being due to one accident, so a single deductible applies to the whole passage rather than to each individual item of damage.

Recoveries are handled in the same clause, credited to underwriters in full to the extent that the unreduced claim exceeds the deductible. Interest comprised in those recoveries is then apportioned between the assured and underwriters under clause 12.3, by reference to time and to the sums paid.

The heavy weather rule cuts both ways. It saves you multiple deductibles on one bad passage, and it also means that damage sustained on separate passages cannot be aggregated to break a single deductible.

Clause 13: duty of the assured, or sue and labour

Clause 13 puts a positive duty on you and on your servants and agents to take reasonable measures to avert or minimise a loss recoverable under the insurance, and to preserve and exercise rights against carriers, bailees and other third parties.

Underwriters contribute to the charges properly and reasonably incurred in doing so, subject to the proportionate reduction where the insured value is less than the sound value. General average, salvage charges, collision defence or attack costs are dealt with elsewhere in the form and are not recoverable under clause 13.

Clause 13.6 caps the position. The sum recoverable under clause 13 is in addition to the loss otherwise recoverable, but in no circumstances exceeds the amount insured in respect of the vessel.

The duty to preserve rights against third parties is the one owners forget. Letting a time bar run against a repairer or a bunker supplier is a breach of clause 13 and it is also the fastest way to convert a recoverable claim into an argument with your own underwriter.

Clauses 14 to 22: measuring the indemnity

This block is where the amount payable is settled once cover has attached.

Clause 21 is the sleeper. Owners arranging increased value or freight interest cover through a second broker sometimes exceed the permitted percentages without anyone reconciling the two placings, and the warranty is breached on paper long before a claim arises.

Clauses 23 to 26: what comes out, and where it goes

Four exclusions close the form. Clause 23 removes war, civil war, revolution, rebellion, insurrection, civil strife, capture, seizure, arrest, restraint or detainment, and derelict mines, torpedoes and bombs, while clause 24 removes strikers, locked-out workmen and persons taking part in labour disturbances, riots or civil commotions.

The last two are shorter. Clause 25 removes loss caused by any terrorist or person acting from a political motive and by any person acting maliciously, and clause 26 removes nuclear weapons of war.

Hull war cover is bought back under Institute War and Strikes Clauses (Hulls, Time) CL.281 dated 1/10/83. Clause 5.1 of that form allows either underwriters or the assured to cancel on 7 days notice, and clause 5.2 terminates cover automatically on the hostile detonation of a nuclear weapon, on the outbreak of war between any of the five named powers, or on requisition of the vessel for title or use.

A separate 48 hour figure circulates in this market and it means something different. Quotations for additional premium areas, in the areas listed by the Joint War Committee, are commonly held open for only 24 to 48 hours, which is a validity window on the offer rather than a cancellation notice period on the cover.

Cargo war cover works to a different clock again. The Institute War Clauses (Cargo) CL385 dated 01.01.2009 carry a 7 day cancellation notice, and the practical consequences on this side of the trade are set out in the Institute War Clauses guide and in war risk surcharges explained. Routing through the region adds its own layer, covered in Singapore transshipment and war risk.

Where 1/11/95 and IHC 2003 differ

Two later forms sit behind ITC-Hulls 1/10/83 and it is worth knowing what moved, if only so that you know which document a lawyer is quoting at you.

The 180 day bar in IHC clause 43.2 is the single largest practical difference between the forms. A late notification under ITC-Hulls costs you 15%; a late notification under IHC 2003 can cost you the claim.

Frequently Asked Questions

Is ITC-Hulls 1/10/83 still used?

Yes, widely, despite two later forms existing. It remains the most commonly attached hull wording on placings in Asia and elsewhere, largely because underwriters, brokers and average adjusters all know how it behaves. Check the top of your schedule to confirm which form your own policy actually incorporates.

What is the Inchmaree cover?

The additional perils at clause 6.2: accidents in cargo and fuel operations, bursting of boilers, breakage of shafts, latent defect in machinery or hull, negligence of crew, pilots, repairers and charterers, and barratry. The name comes from the 1887 House of Lords decision in the Inchmaree case, which held that machinery damage from a closed valve was not a peril of the seas.

Does the due diligence proviso apply to all the perils in clause 6?

No, only to clause 6.2. Losses under clause 6.1, including perils of the seas, fire and explosion, are not subject to it. That is why the characterisation of a casualty as a clause 6.1 peril or a clause 6.2 peril often decides whether want of due diligence at management level is even relevant.

What is the 15% deduction under clause 10?

A fixed reduction of 15% from the ascertained claim for failure to comply with the notice and tender conditions in clause 10. It applies regardless of whether underwriters were actually prejudiced by the failure. Giving notice before survey and before committing to a repair yard avoids it entirely.

Does the deductible apply to a total loss?

No. Clause 12.1 expressly disapplies the deductible to a claim for total or constructive total loss of the vessel, and to an associated sue and labour claim under clause 13 arising from the same accident or occurrence. Every other claim is subject to it on an aggregate per accident basis.

How does the heavy weather rule work?

Clause 12.2 treats damage by heavy weather during a single sea passage between two successive ports as one accident, so one deductible applies across that passage. It prevents underwriters from applying a separate deductible to each item of damage, and equally prevents an owner aggregating damage from separate passages to break a single deductible.

Can my hull policy terminate without anyone telling me?

Yes, under clause 4. Change of Classification Society, loss or suspension of class, change of ownership or flag, transfer to new management, bareboat charter or requisition all terminate cover automatically unless underwriters have agreed otherwise in writing. Where the vessel is at sea, the class limb defers termination until arrival at her next port.

Where does war risk cover come from if clause 23 excludes it?

From a separate war risks placing, usually on Institute War and Strikes Clauses (Hulls, Time) CL.281 or an equivalent war risks association entry. Clause 5.1 of CL.281 permits cancellation by either party on 7 days notice, and clause 5.2 sets out the automatic termination events, subject to policy terms and conditions.

Voyage Conclusion

ITC-Hulls 1/10/83 is a short document that rewards close reading twice a year, at renewal and on the day something breaks. The three provisions that most often decide the outcome of a claim are the due diligence proviso in clause 6.2, the 15% deduction in clause 10.4 and the automatic termination triggers in clause 4, and none of them is buried.

Voyage places hull and machinery cover directly with the underwriters who write these forms for owners and operators in Malaysia and Singapore, alongside P&I and marine liability placements, and we will tell you where your wording differs from the standard form rather than assuming it does not. Operators running specialised tonnage should also look at ship repairers' liability and project cargo cover, and owners in the bulk trades at metals and minerals cargo insurance. Send the slip through the quote request form or on WhatsApp.

Disclaimer: This article provides general guidance on Institute Time Clauses (Hulls) 1/10/83 as of September 2026. Coverage terms, conditions, and availability vary by insurer, policy, and jurisdiction. Regulatory requirements differ between countries and may change.

Always review your specific policy wording and consult a qualified insurance or legal professional before making coverage decisions.