In the case of Cruise and Maritime Services International Limited v Navigators Underwriting Agency Limited (the MARCO POLO), a holiday sales agent failed to recover under a marine liability policy on a number of grounds.

The MARCO POLO was a cruise ship which been chartered and then sub-chartered to Transocean Tours Touristik GmbH. Transocean entered into a sales agency agreement with the claimant, CMS, in order to market and sell cruises on the vessel. CMS subsequently contracted with a number of tour operators which marketed cruises to passengers.

When the MARCO POLO was struck by an outbreak of norovirus two days into a cruise, the cruise had to be cancelled and a number of passengers became ill. CMS paid compensation to passengers in respect of personal injury and ruined holidays and sought to recover an indemnity from the marine liability policy purchased by the head charterer, which named CMS as a co-insured. The court rejected CMS’ claim on the following grounds:

  1. Its liability to the passengers was said to be pursuant to the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea. However, the Athens Convention only provided for claims made by passengers against entities with whom the passengers had entered into a contract of carriage (carriers). In this case, CMS had not contracted with the passengers, but with the individual tour operators who were the carriers for the purposes of the Athens Convention.
  2. Although named as a co-insured, the policy did not respond to claims made against CMS. The interest under the policy was described as ‘charterers liability’ and the conditions provided the insurance was “to cover Charterers Liability per Clause MM.No. 1416”. The court found that CMS could not, on any view, be regarded as a charterer. The addition of CMS’ name to the policy made no difference – no additional premium was charged and no indication of what might be covered was given. Thus, “the mere naming of the claimant as co-assured does not itself mean that the alleged liability in respect of which this claim is advanced fell within the Policy”.
  3. The court did not need to reach a conclusion on whether CMS had in fact been negligent but commented that the mere outbreak of norovirus was not enough to so establish.

Following the decision on second point, parties hoping to rely on policies in which they are named as a co-insured need to be careful that the policy actually responds to the type of loss they may suffer.