LAND RIG INSURANCE
Whereas the Insured named in the Schedule has applied
to PT. CHINA INSURANCE INDONESIA
(hereinafter called the "Insurers") for insurance in the terms
hereinafter stated.
It is agreed that in
consideration of the payment of the Premium
by the Insured and subject to the Exclusions, Provisions and Conditions endorsed hereon that the Insurers will
indemnify the Insured against loss of
or damage to the Property Insured caused by insured perils occurring during the Period of Insurance and
within the territorial Limits specified in the Schedule.
Provided
always that the liability of the Insurers shall not exceed in respect of each Section of the Property Insured the Sum
Insured thereon nor in the whole the Total Sum Insured.
BASIS OF INDEMNITY
It is
understood and agreed that in the event of loss or damage under this
Policy (not hereinafter excluded) the basis of indemnity shall be as follows :
a)
In cases where
damage to the Property Insured can be repaired
the Insurers will pay expenses necessarily incurred to restore the
damage machine to its former state of serviceability
plus the cost of dismantling and re-erection incurred for the purpose of effecting the repairs as well as
ordinary freight to and from a repair-shop, plus custom duties and dues, if any, to the extent such expenses have been
included in the sum insured. If the repairs are executed at a workshop owned by the Insured, the Insurers will pay the cost of materials and wages incurred
for the purpose of the repairs plus
a reasonable percentage to cover overhead charges.
Deduction shall be made for
depreciation in respect of parts replaced and the value of any salvages will be
taken into account. If the cost of repairs as detailed hereinabove equals or exceeds the actual value of the Property
Insured immediately prior to the occurrence of the damage, the settlement shall be made on basis provided for in
(b) below.
b)
In cases where
the Property Insured is destroyed the Insurers
will pay the actual Market value of the destroyed item subject to the
sum insured for that item being the maximum indemnity provided, and subject
also to item (c) below. The value of any
salvage will be taken into account.
c)
It is expressly
understood and agreed between the Insured and
Insurers and made a Condition of this Policy, that the Insured shall maintain contributing insurance on
each item of Property Insured as stated in the Schedule of not less than
100% of the actual market value thereof and that failing to do so, the Insured
shall be an Insurer to the extent of such
deficit and bear such proportionate part of any loss or damage (whether partial or total) on each item. If the Property Insured as stated in the Schedule
consists of more than one item then this Condition shall apply to each
item separately.
PERILS
INSURED
This Policy insures against all risks of direct physical
loss of or damage to the insured property from any external cause, except
as hereinafter excluded.
PROPERTY INSURED
Except as hereinafter excluded,
this Policy insures oil or
gas-well-drilling, servicing, workover or specialty equipment as set out in the attached Schedule, the property of
the Insured, or for which the Insured may be legally liable including but not
limited to; tools, portable buildings and their contents, machinery, materials,
appurtenances, derricks, substructure, drill pipe, drill collars, and other
equipment constituting a part thereof, either
while being assembled or while assembled and rigged up for drilling operations or dismantled and
separated for inland transportation, overhaul, maintenance, repair,
adjusting, servicing and other purposes and including whilst inland transit.
Each item or rig shall be deemed a separate insurance;
however, permission is granted the Insured to interchange equipment between
items or units Scheduled hereunder.
AUTOMATIC COVERAGE EXTENSION
This Policy is extended to cover
additional items or units or any
additional equipment added to any item or unit hereunder, leased, rented, or
acquired by the Insured (including transit
risks as covered hereunder) on or after the inception date of
this Policy. In consideration of this extension,
the Insured agrees to report such acquisition to Insurers within 30 days and pay pro-rata additional premium
from date acquired to expiration. This extension also applies to rigs and equipment already owned by the
Insured by previously in storage and notice must be given to Insurers within 30 days
of said
equipment being removed from storage.
In no event shall the Insurers
be liable for more than 10% of the Total
Sum Insured declared herein of any one rig and/or
item of equipment under the terms of this extension.
DEBRIS REMOVAL EXTENSION
This policy also covers expenses
incurred in the removal of debris of the
property covered hereunder which may be destroyed or damaged, by a peril
insured against. In no event shall the
Insurers liability exceed an additional 10% over the amount scheduled herein for that items. The cost of
removal of debris shall not be considered in the determination of the valuation
of the property covered.
TERRORISM EXCLUSION CLAUSE FOR
CONTAMINATION AND EXPLOSION
It s agreed that,
regardless of any contributory causes, this policy or any endorsement thereto
does not cover any loss, damage, liability, cost or expense directly or
indirectly arising out of.
a) biological or chemical
contamination
b) missiles, bombs,
grenades, explosives due to any act of terrorism
for the purpose of this
clause an act of terrorism means an act, including but not limited to the use
of force or violence and/or the threat thereof, of any person or group(s) of
persons, whether acting alone or on behalf of or in connection with any organization(s)
or government(s), committed for political, religious, ideological or ethnic
purposes or reasons including the intention to influence any government and/or
to put the public, or any section of the public, in fear.
For the purpose of a) “contamination” means the contamination,
poisoning, or prevention and/or limitation of the use of objects due to the
effects of chemical and/or biological substances.
If the Company alleges
that by reason of this exclusion, any loss, damage, liability, cost or expense
is not covered by this policy the burden of proving the contrary shall be upon
the Insured. Subject otherwise to the Terms, Conditions and Exceptions of this
Policy.
TERRORISM EXCLUSION CLAUSE
Notwithstanding any
provision contained herein to the contrary, this policy or any endorsement
thereto excludes loss damage, liability, cost or expense of whatsoever nature
directly or indirectly caused by, resulting from or in connection with any act
of terrorism regardless of any other cause or event contributing concurrently
or in any other sequences to the loss.
For the purpose of this
clause an act of terrorism means an act, including but not limited to the use
of force or violence and/or the threat thereof, of any person or group(s) of
persons, whether acting alone or on behalf of or in connection with any organization(s)
or government(s), committed for political, religious, ideological or similar
purposes including the intention to influence any government and/or to put the
public, or any section of the public, in fear.
This clause also
excludes loss, damage, liability, cost or expense of whatsoever nature directly
or indirectly caused by, resulting from or in connection with any action taken
in controlling, preventing, suppressing or in any way relating to any act of terrorism.
If the Company alleges
that by reason of this exclusion, any loss, damage, liability, cost or expense
is not covered by this policy the burden of proving the contrary shall be upon
the Insured.
In the event any
portion of this clause is found to be invalid or unenforceable, the remainder
shall remain in full force and effect. Subject otherwise to the Terms,
Conditions and Exceptions of this Policy.
PHYSICAL DAMAGE CLARIFICATION
CLAUSE
Property damage covered
under this Policy shall mean physical damage to the substance of property.
Physical damage to the
substance of property shall not include damage to data or software, in
particular any detrimental change in data, software or computer programs that
is caused by a deletion, a corruption or a deformation of the original
structure.
Consequently the
following are excluded from this policy:
i.
Loss of or damage to data software, in particular any
detrimental change in data, software or computer programs that is caused by a
deletion, a corruption or a deformation of the original structure, and any
business interruption losses resulting from such loss or damage.
Notwithstanding this exclusion, loss of or damage to data or software, which is
the direct consequence of insured physical damage to the substance of property,
shall be covered.
ii.
Loss or damage resulting from an impairment in the
function, availability, range of use resulting or accessibility of data,
software or computer programs, and any business interruption losses resulting
from such loss or damage.
Subject otherwise to
the Terms, Conditions and Exceptions of this Policy.
INDONESIA
Notwithstanding
anything contained herein to the contrary, it is agreed that the indemnity
provided herein shall not apply to:
1. Compensation for
damages in respect of judgment delivered or obtained in the first instance
otherwise than by a court of competent Jurisdiction in
2. Cost and expenses of
litigation recovered by any claimant from the Insured which are not incurred in
and recoverable in
DEDUCTIBLE CLAUSE
In respect of each claim for loss
or damage, the Insurers shall be liable
for their due proportion of the loss or damage
to the Insured property as set forth by the terms and conditions of this
Policy, after deducting US$ ……………. from the amount of said loss or damage but
in respect of tools and equipment otherwise
US$ ……………. each and every loss.
PROPERTY NOT
INSURED
This Policy does not insure :
A.
Compounds
commonly known as; mud, cement or chemicals and any materials or expense
incidental to fighting fire or attempting to control blowout or cratering.
B.
Motor vehicles,
trailers, or tractors (except trucks, carriers or trailers on which equipment
is permanently attached as part of an item or unit Scheduled herein or trailers
used as quarter for crews).
C. Property
,which is not part of a rig Scheduled hereunder while in storage in any
warehouse or storage yard owned, leased, or
controlled by the Insured, unless specifically Scheduled herein.
D. Property 'situated or installed on Barges
or Vessels or while waterborne, (except as defined herein) unless
Insurers are notified in advance and their permission is granted.
E. Property situated on piers or piling structures, except property which is situated thereon incidental to
loading and unloading on a regular scheduled ferry or barge.
F. Causeways,
roadways, or earthen pits.
G. Aircraft.
H. Blueprints,
plans, records or specifications.
I. Insured
property situated below the earth's surface for which the well owner or
operator has contractually or legally assumed liability.
J. Insured property situated below the
earth's surface unless loss or damage is caused by :
1) Fire,
lightning, tornado, windstorm, flood, theft, vandalism, malicious mischief,
sabotage, strikes, riots, civil commotion or aircraft;
2) Explosion
above the surface of the ground; blowout or cratering as defined herein;
3) Pull-in or collapse of derricks or masts;
4) Total loss of the rig.
K. Insured
property used to drill a relief-well to control or to attempt to contr.-o]- blowout, cratering or fire in any oil or gas well unless approval is
obtained from Insurers.
L.
Property
consisting of a complete unit or parts thereof, leased, loaned, or rented to
others, unless prior notice has been given to Insurers and this Policy is
extended to cover such property in use
by others.
M.
Railroad rolling
stock.
N.
Casing, Tubing.
PERILS NOT INSURED
This Policy does not insure against
loss, damage or expense caused by or resulting from :
A. Wear and tear; gradual deterioration; corrosion; rust;
dampness or atmosphere; freezing or
extremes of temperature; mechanical breakdown or failure unless fire or
explosion ensues and then only for loss or damage caused by such ensuing fire
or explosion.
B. Electrical injury or-disturbance to
electrical appliances or devices of any kind (including wiring) from artificial
causes; unless fire ensues and then only for such ensuing loss.
C. Loss of use or delay; loss of hole; loss of contract
or income or profits; or any loss of a consequential nature.
D. Infidelity or any dishonest act on the part of the
Insured or other party or interest, his or their employees or agents or any person or persons to whom the
property may be entrusted (carriers for hire excepted).
E. Unexplained loss; mysterious disappearance; nor loss
or shortage disclosed upon taking inventory.
F. The neglect of the Insured to use all reasonable means
to save and preserve the property at time of and after any disaster insured
against.
G.
(1) War, hostile or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or
expected attack
H.
a)
by government or sovereign power (de jure or de facto), or by any authority
maintaining or using
military, naval or air forces;
b)
by military, naval or air forces;
c)
by an agent of any such government, power, authority or forces.
(2) Loss or damage caused by any
weapon of war employing atomic fission or radioactive force whether in time of peace or war.
(3) Insurrection, rebellion,
revolution, civil war, usurped power, or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under quarantine or Customs regulations, confiscation
by order or any Government
or Public Authority, or risk of contraband or illegal transportation or trade.
H. Nuclear reaction or nuclear radiation or radioactive contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or remote or be in whole or in part caused by,
contributed to or aggravated by the peril(s) insured against in
thisPolicy; however, subject to the foregoing and all provisions of this
Policy, direct loss by fire resulting from nuclear reaction or nuclear
radiation or radioactive contamination is insured against by this Policy.
I. Loss or damage to steam engines, steam
boilers, steam slush pumps, steam pipes or connection, steam water locators internal combustion engines, power
slush pump, fly-wheels, pulleys, abrasive wheels, moving or rotating parts of machinery caused by or resulting
from explosion, unless fire ensues and
then only for loss and damage directly caused by ensuing fire.
WARRANTIES
A.
The Insured
Warrants that the property insured hereunder shall be operated only by the
Insured's employees unless prior notice is
given to Insurers and their permission is granted. Permission is granted for the insured property to be
operator as required in the drilling contract.
B.
The Insured
Warrants that a blowout preventer of standard design
and make will be set on the "surface casing", such preventer
to be properly installed and tested. However, subject to prior approval of
Insurers, permission may be granted to
waive this warranty. In any event this warranty does not apply to "spud-in" equipment or cable tool rigs.
C.
It is further
Warranted that when drilling or workover operations use air or gas in lieu of
conventional mud a blowout preventer or
rotating head will be installed with bled
off lines to avert such air or gas away from the rig. It being further agreed that the Insured shall in
addition promptly notify Insurers
of-their intention to use air or gas
in lieu of mud in their drilling or workover operations.
No loss or damage resulting from or occurring during a
breach of any warranty shall be covered or
paid hereunder.
DEFINITION OF
BLOWOUT AND CRATERING
A.
Blowout - "A
sudden and uncontrolled expulsion from the well «move the earth's surface of
oil, gas water, or drilling fluids resulting
in complete loss of control of the well".
B. Cratering - "A bowl shaped depression in the
earth's surface around the well caused by
the erosive and eruptive action of oil, gas, or water flowing without
restriction".
IN-HOLE SALVAGE EXPENSE
In the event in-hole salvage expense is incurred with
respect to a drill stem lost or damaged as a result of a peril insured against,
this policy shall cover that proportion of
such expense that the value of the drill stem below the Earth's Surface (at the time of loss) bears to the
aggregate cost of the hole at the attained depth (at the time of loss) plus the
value of the drill stem below the earth's
surface (at the time of loss). Subject to a maximum limit of indemnity
of US$ 15,000.00 per anyone event.
However, this Policy shall not :
A.
Cover salvage
expense contractually assumed by or made the responsibility of the well owner
or operator.
B.
Provide coverage
for any amount in excess of the value of the drill stem below the earth's
surface (at the time of loss) as respect salvage expense of loss or damage to
the drill stem or both combined.
WAIVER OF
INVENTORY OR APPRAISEMENT
In the event the aggregate
claim for loss does not exceed five percent (5%) of the total amount of
insurance in respect of each item of property damaged at the time such loss
occurs, no special inventory or appraisement of the
undamaged property shall be required. If this Policy
be divided into two or more items, the foregoing condition shall apply to each
item separately.
BENEFIT OF THIS POLICY
This Policy shall in no wise
insure directly or indirectly to the
benefit of any bailee to whom the property insured hereunder is entrusted.
OTHER INSURANCE
The insurance afforded by this policy-shall be excess over any other valid and
collectible insurance, other than insurance that is specifically state to be in excess of
the Sum Insured set
forth herein.
SUBROGATION
A.
Insurers grant the Insured permission to waive its rights of subrogation under this Policy
against any person, Firm or Corporation,
including their joint interest holders and co-venturers, with whom the Insured has a written contract to work at a definite well-site or sites, provided
such waiver is in writing and executed prior
to the time of loss. Such waiver shall not extend nor enlarge the insurance herein provided, nor
insure any Person, Firm or Corporation for whom such waiver is provided.
B.
Insurers, shall, at the time of payment of any loss under this Policy, be subrogated to all
the Insured's rights or recovery
existing at the time of loss against any Person, Firm or Corporation, and suit may be brought
thereon at Insurers option, either in the name of Insurers or the Insured, and the Insured shall, at
the request of Insurers or their Agents, execute and deliver all assignments, instruments and papers necessary
or proper to secure such subrogation
rights to Insurers and co-operate with Insurers in recovery or suit against any party so subrogated against to the extent that payment
therefore is made by Insurers.
C.
Insurers agree to waive their right of recovery against any subsidiary
company of the Insured for any loss paid under this Policy except to the extent
that such interests are protected by other valid and collectible insurance
which would apply.
Any act of the Insured which prejudices Insurers rights at the time of or after loss shall void this
Policy.
ASSIGNMENT
Assignment of interest under this
Policy shall not be made by the Insured without the written consent of Insurers.
POLLUTION
HAZARD
In consideration of the premium
charged and subject to the terms and conditions of this Policy, it is understood and agreed that this insurance covers
loss of or damage to the property insured directly caused by any Governmental Authority acting under the powers
vested in them to prevent or mitigate a pollution hazard, or threat thereof, resulting directly from damage to
the property insured for which the Insurers are liable under this Policy, provided such act of
Governmental Authority has not resulted from fact of due diligence by the
Insured, the Owners or Managers of the property insured or any of them to prevent or mitigate such hazard or
threats.
CANCELLATION CLAUSE
This Policy may be cancelled by
the Insured at any time by written notice or by surrender of this Policy. This
Policy may also be cancelled by or on behalf of the Insurers by delivering to
the Insured or by mailing to the Insured, by registered, certified or other
first class mail, at the Insured's address as shown in this Insurance, written notice stating
when, not less than 30 days thereafter, the cancellation shall be effective. The mailing of such
notice as aforesaid
shall be sufficient proof of notice and this policy shall terminate at the date
and hour specified in such notice.
If this Policy shall be cancelled
by the Insured the Insurers
shall retain the customary short rate proportion of the premium stipulated herein.
Payment
or tender of any earned premium by the Insurers shall not be a condition precedent to the effectiveness of
cancellation but such payment shall be made as soon as practicable.
If the period of limitation relating to the giving of
notice is prohibited or made void by any
law controlling the construction thereof, such period shall be deemed to be
amended so as to be equal to the minimum period of limitation permitted by such
law.
SUE AND LABOR
In
the event of loss or damage to property insured by this Policy, it shall
be lawful and necessary for the Insured, their factors, servants, and/or
assigns to sue, labor and travel for, in and about the defense, safeguard and recovery of the property insured hereunder, or any
part or parts thereof, without prejudice to this Policy, the charges whereof, the Insurers will pay, and it is especially declared and agreed that no acts of
the Insurers or Insured in recovering
saving or preserving the property insured shall be considered as a
waiver or acceptance of abandonment.
AUTOMATIC
REINSTATEMENT
It is
a condition of this Policy that 'the amount of any Insured loss shall be automatically reinstated for the value of repairs and replacements made as they are made,
loss or damage paid under this Policy. Said reinstatement is made with
further premium charges.
NOTICE AND PROOF OF LOSS
The Insured shall immediately
report to Insurers or their Agent every loss or damage which may become a claim
under this Policy, and shall also file with Insurers or their Agents within
ninety-one (91) days from the date of loss, a detailed sworn proof of loss stating the time, cause and extent of damages resulting in claim for loss or
damage under this Policy.
The Insured shall further make
available to Insurers or any person named by Insurers, any
remains of the property
Insured, all books of accounts,
bills, invoices, vouchers,
rental agreement and contract to drill of the unit involved in the loss, in
substantiation of claim for loss or damage, and so far as is within his or
their power, shall
cause all persons interested in the property or their employees and the employees of
the Insured to submit to examination under oath as to the facts and extent of claim for loss or
damage. Failure by
the Insured either to report the said loss or damage or to file such written proof of loss or to comply with the
requirements as herein provided shall invalidate any claim under this Policy.
Any claim for theft must be
reported to the Insurers and the Police
of Local Law Enforcement body by the Insured as soon as discovered. The Insured shall
co-operate with Insurers and all reasonable means exhausted in the recovery of such property, before Insurers shall
be held liable for such loss. The Insured shall not be deemed to have knowledge of an occurrence until the Insurance
manager or person responsible for reporting losses has knowledge of said
occurrence.
COLLECTION FROM OTHERS
No loss shall be paid hereunder
if the Insured has collected the same from others.
SETTLEMENT WITHOUT INSURERS CONSENT
Insurers
shall not be liable for any loss, damage or expense
which, without their consent, has been settled or compromised with
others who may be liable therefore.
SUIT
No
suit or action on this Policy for the recovery of any claim hereunder,
shall be sustainable in any
court of law or equity unless the
Insured shall have fully complied with all
requirements herein, nor unless commenced within twelve (12) months next after the happening of the loss;
provided that where such limitation
of time is not prohibited by the laws
of the State wherein this Policy is issued, then and in that event, no suit or action under this Policy
shall be sustainable unless commenced
within the shortest limitation permitted under the laws of such State.
MISREPRESENTATION
OR FRAUD
This Policy shall be void, if the
Insured has concealed or misrepresentated in writing or otherwise, any
material fact or circumstances concerning this insurance or the subject
thereof; or in case of fraud or false swearing by the Insured touching any
matter relating to this insurance or the subject thereof; whether before of
after a loss.
APPRAISALS
In case the Insured and Insurers
shall fail to agree as to the amount of loss or damage or the actual cash value of the items or units
involved, then, on the written demand of either, each shall select a competent
and disinterested appraiser and notify the other of the appraiser selected
within twenty (20) days of such demand. The appraisers shall first select a
competent and disinterested umpire; and
failing for fifteen (15) days to agree upon such umpire, than at the request of the Insured or Insurers, such
umpire shall be selected by a Judge of a District Court of a Judicial
District where the loss occurred. The appraiser shall then appraise the loss, stating separately the actual cash value (as defined herein) and/or, the actual
amount of loss or damage to each item
or unit, and failing to agree shall submit their difference to the
umpire. An award in writing, so itemized, of
any two when filed with Insurers shall determine the amount of loss or
damage. Each appraiser shall be paid by the
party selecting him and the expenses of appraisal and umpire shall be
paid by the parties equally.
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