B-4 Increase in risk, Watercraft Hull Insurance, Basis

B-4.1 An increase in risk exists where, after you make your contractual declaration, the circumstances actually present are changed such that the occurrence of the insured event, or an enlargement of the loss, or an unjustified claim on us would become more likely. An increase in risk may in particular, but not only, exist where a circumstance material to the risk about which we asked before conclusion of the contract changes. An increase in risk exists in particular where the craft is hired out, chartered out or otherwise handed over to third parties for payment, unless this was agreed with us; exceeding the cruising limits set out in the policy schedule is permissible under these conditions only by agreement with us, case by case, before the risk begins. German law applies to the contract. The German wording of the conditions alone is binding; this translation is provided for understanding only.

B-4.2 After making your contractual declaration you may not bring about an increase in risk, or permit a third party to bring one about, without our prior consent. If you subsequently realise that you have brought about or permitted an increase in risk without our prior consent, you must notify this to us without delay. An increase in risk that occurs after your contractual declaration independently of your will must be notified without delay after you learn of it.

B-4.3 If you breach your duty under B-4.2, we may cancel the contract without notice where you breached your duty intentionally or through gross negligence. Where the breach is based on simple negligence, we may cancel the contract giving one month's notice. We may not cancel if you prove that you are not responsible for the breach of duty. If an increase in risk in the cases under B-4.2 becomes known to us, the contract may be cancelled giving one month's notice.

B-4.4 Instead of cancelling, we may from the time of the increase in risk demand an increased premium corresponding to our business principles, or exclude cover for the higher risk. If in that case the premium increases by more than 10 per cent, or if we exclude cover for the higher risk, you may cancel the contract within one month of receiving our notification without observing a period of notice. In the notification we must draw your attention to that right of cancellation.

B-4.5 Our rights to cancel or to adjust the contract lapse if they are not exercised within one month of our learning of the increase in risk, or if the state that existed before the increase in risk has been restored.

B-4.6 If the insured event occurs after an increase in risk, we are not obliged to pay where you breached your duties under B-4.2 intentionally. If you breached those duties through gross negligence, we are entitled to reduce our payment in the proportion corresponding to the severity of your fault. The absence of gross negligence must be proved by you.

B-4.7 In the case of an increase in risk under B-4.2 we are not obliged to pay, where your duties were breached intentionally, if the insured event occurs later than one month after the point at which the notification should have reached us. If you breach your duties through gross negligence, B-4.6 sentences 2 and 3 apply accordingly. Our obligation to pay remains in place if the increase in risk was known to us at the point named in sentence 1.

B-4.8 Our obligation to pay further remains in place 1 so far as you prove that the increase in risk was not causal for the occurrence of the insured event or for the extent of the obligation to pay, or 2 where at the time of the occurrence of the insured event the period for our cancellation had expired and no cancellation had been made.