The Merchant Shipping (Local Vessels) (Amount of Insurance Cover) (Amendment) Notice 2016 was gazetted today to increase the minimum amounts of liability cover for the compulsory third party risks insurance of local vessels.
The amendment is to accord passengers better protection by raising the statutory minimum amount of the liability cover which has not been adjusted since 2007.
For local vessels permitted to carry more than 12 passengers, except Class I primitive and Class IV vessels which are not let for hire or reward, the minimum liability cover will be increased from $5 million to $10 million.
Regarding local vessels that carry 12 or less passengers, Class I primitive and Class IV vessels not let for hire or reward, the amount will be raised from $1 million to $5 million.
For local vessels with insurance policies made and in force immediately before September 1, the current statutory minimum amount will continue to be applicable until the policy expiry date or the expiry of one year beginning on September 1, or if the policy terms or conditions are altered that would cause it to cease to comply with current statutory requirements, whichever is the earliest.
The amendments were made after reviewing claims statistics, insurance companies' indicated risk capacity, and affordability within the trade.
The Marine Department has consulted and received support from the Local Vessels Advisory Committee and the Legislative Council Economic Development Panel on the amendments.
The amendment notice will be tabled at the council on April 27.
