Cruise And Maritime Services International Ltd v Navigators Underwriting Agency Ltd Re Marco Polo

A party named as a co-insured under a liability policy is not thereby covered for every liability connected with its business. Cover depends on the wording of the policy and the insured interest identified in it. Where cover is for charterers’ liabilities, the claimant must show that it was a charterer and that the liability falls within the insured risks. A general sales agency agreement for marketing cruises is not a charterparty merely because payments are calculated by reference to passengers or cruise nights. Commercial payments or discounts made to preserve business relations do not establish a legal liability. Nor does a norovirus outbreak alone establish fault or neglect.

The claimant was named as a co-insured under a charterers’ liability policy held by the head charterers of the cruise ship Marco Polo. Following a norovirus outbreak, the claimant sought an indemnity for money and discounts made available to passengers. It contended that it was liable as a contracting carrier under the Athens Convention and that its general sales agency agreement with the cruise operator was, in substance, a sub-charter. The issues were whether the claimant was a contracting carrier, whether it incurred liabilities as a charterer within the policy, and whether the payments represented insured liabilities.

1. The claim was dismissed. The claimant was not a contracting carrier under the Athens Convention. The passengers contracted with the tour operators, whose booking confirmations created the relevant contracts of carriage. The claimant’s general sales agency agreement and its passenger information form did not create contractual relationships between the claimant and the passengers.
2. The policy covered charterers’ liabilities under the applicable charterers’ liability clause and the relevant UK Club Rules. The claimant was not a charterer. Its agreement with the cruise operator appointed it as a general sales agent to market cruises and appoint tour operators. It did not hire the vessel, place it under the claimant’s orders, or operate as a charterparty. Calculations based on passenger numbers and cruise nights did not amount to hire.
3. The claimant’s inclusion as a co-insured did not itself extend the policy to liabilities outside its terms. The wording covered what it covered, and the alleged liabilities did not fall within losses, costs and expenses incurred as charterers.
4. The money and future-cruise discounts were made available for commercial and reputational reasons, rather than because of a legal liability to passengers. They therefore did not establish an insured liability. The fact that the claimant acted quickly, before assessing fault or neglect, did not alter that conclusion.
5. The mere occurrence of a norovirus outbreak was insufficient, without more, to establish fault or neglect. The court did not need to decide whether fault or neglect existed because the claim failed on the contractual and insurance issues.