Policies such as an Offshore Package Policy
typically will provide cover for "All risks of physical loss
of or damage to" platforms and pipelines etc., but difficult
questions can arise as to what exactly constitutes
"damage".
In many cases there will be no argument as to whether physical
damage has occurred, but the issue can be less straightforward
where, for example, a pipeline suffers from a blockage, or where it
is established that there was a latent defect in that property.
Defective condition versus damage
Unless expressly covered by the policy wording as in the
Inchmaree Clause of the Institute Time Clauses Hulls (ITCH), marine
insurance does not provide cover for inherent vice or wear and
tear; 'it covers a risk, not a certainty'.1 So where, for
example, a latent defect develops and becomes patent in the
ordinary course of operations, such defect will not, without more,
be covered. However, insured damage may occur where loss is caused
by a fortuitous
