International Navigating Limits
The hull policy trading limits a charter incorporates, renamed from the Institute Warranty Limits on 1 November 2003, and why the change from warranties to provisions matters.
The International Navigating Limits are the geographical trading limits a hull and machinery policy sets, which a time charter incorporates so that the charterer’s employment orders keep the vessel inside cover. Trading outside them without prior notice to and agreement from underwriters exposes the shipowner, which is why breach of trading limits is one of the standard grounds on which an owner may refuse an employment order.
The Institute Warranty Limits were revised and renamed the International Navigating Limits with effect from 1 November 2003. The legally significant change was not the geography but the character of the provisions: they became provisions rather than warranties, so a breach avoids only losses occurring outside the permitted area rather than discharging the underwriter from the date of breach under section 33 of the Marine Insurance Act 1906. That is a substantial narrowing of the consequence of an inadvertent excursion.
The permanently excluded areas include the polar regions, the St Lawrence Seaway and the Great Lakes outside their open season, the Aleutian and Queen Charlotte Islands and the Bering Sea. The full article will set out the limits area by area with their seasonal windows, the held covered and additional premium mechanism, and how the limits interact with charter party ice clauses and with the Polar Code.