During loading at Los Angeles, a ship’s master received a report of an injury to a stevedore, who had allegedly slipped on a patch of grease on board. The master notified the ship manager of the incident; the master also noted that, in his opinion, the alleged injury was a “fabricated story”. The manager simply filed the report from the master, and failed to advise the matter to the ship’s P&I insurers. Thirteen months later, a summons from the Los Angeles court was served on the owner at the manager’s office. The stevedore was claiming US$1,000,000 for his alleged injury. The claim against the owner was eventually settled for US$ 900,000 but the P&I insurers, relying on a clause in the insurance policy under which the assured had to repor t any incident at the latest within twelve months of the assured becoming aware of it, only agreed to pay 50% of the claim (or US$450,000) on an ‘ex gratia’ basis. The owner successfully claimed the balance of US$450,000, plus legal costs of a fur ther US$50,000, from the manager, which was indemnified by ITIC.

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