Ship Repairers' Liability Insurance

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Item Information

Revision History

Date Status ID Title
2018-06-21 Active G5001C Ship Repairers' Liability Insurance (2018-06-21) G5001C
2014-06-26 Superseded G5001C ARCHIVED: Ship Repairers' Liability Insurance (2014-06-26) G5001C
2008-05-12 Superseded G5001C ARCHIVED: Ship Repairers' Liability Insurance (2008-05-12) G5001C

Remarks – Recommended Use of SACC Item

Use the following clause in contracts for ship repair (including emergencies) and conversion contractual documents. Note that general contractors who are only performing casual and intermittent work on ships (e.g. welders) may not have a specialized policy. Commercial General Liability clause G2001C, including option (p) of paragraph 2, should be used accordingly.

Whenever the liabilities of Canada and the contractor with respect to the contract are difficult to separate, contracting officers must replace paragraph 2. (a) by the following option:

"Additional Named Insured: Canada is added as an additional named insured, but only with respect to liability arising out of the performance of the Contract."

Contracting officers must choose option (f) in paragraph 2 below when applicable to their contract.

Contracting officers must consult PWGSC Risk Management Advisory Services, at: if the suggested limit of $10,000,000 per accident or occurrence is not considered adequate as alternate limits may be established.

Legal text for SACC item

  1. The Contractor must obtain Ship Repairers' Liability Insurance and maintain it in force throughout the duration of the Contract, in an amount usual for a contract of this nature, but for not less than $10,000,000 per accident or occurrence and in the annual aggregate.
  2. The Ship Repairers' Liability insurance must include the following:
    1. Additional Insured: Canada is added as an additional insured, but only with respect to liability arising out of the Contractor's performance of the Contract. The interest of Canada as additional insured should read as follows: Canada, represented by Public Works and Government Services Canada.
    2. Waiver of Subrogation Rights: Contractor's Insurer to waive all rights of subrogation against Canada as represented by _________ (insert department) and Public Works and Government Services Canada for any and all loss of or damage to the vessel, however caused.
    3. Notice of Cancellation: The Contractor will provide the Contracting Authority thirty (30) days prior written notice of policy cancellation or any changes to the insurance policy.
    4. Contractual Liability: The policy must, on a blanket basis or by specific reference to the contract, extend to assumed liabilities with respect to contractual provisions.
    5. Cross Liability/Separation of Insureds: Without increasing the limit of liability, the policy must protect all insured parties to the full extent of coverage provided. Further, the policy must apply to each Insured in the same manner and to the same extent as if a separate policy had been issued to each. (Contracting officers must insert the following option, if applicable.)
    6. Litigation Rights: Pursuant to subsection 5(d) of the Department of Justice Act , S.C. 1993, c. J-2, s.1, if a suit is instituted for or against Canada which the Insurer would, but for this clause, have the right to pursue or defend on behalf of Canada as an Additional Named Insured under the insurance policy, the Insurer must promptly contact the Attorney General of Canada to agree on the legal strategies by sending a letter, by registered mail or by courier, with an acknowledgement of receipt.
      For the province of Quebec, send to:
      Director Business Law Directorate,
      Quebec Regional Office (Ottawa),
      Department of Justice,
      284 Wellington Street, Room SAT-6042,
      Ottawa, Ontario, K1A 0H8

      For other provinces and territories, send to:
      Senior General Counsel,
      Civil Litigation Section,
      Department of Justice
      234 Wellington Street, East Tower
      Ottawa, Ontario K1A 0H8

      A copy of the letter must be sent to the Contracting Authority. Canada reserves the right to co-defend any action brought against Canada. All expenses incurred by Canada to co-defend such actions will be at Canada's expense. If Canada decides to co-defend any action brought against it, and Canada does not agree to a proposed settlement agreed to by the Contractor's insurer and the plaintiff(s) that would result in the settlement or dismissal of the action against Canada, then Canada will be responsible to the Contractor's insurer for any difference between the proposed settlement amount and the amount finally awarded or paid to the plaintiffs (inclusive of costs and interest) on behalf of Canada.