Classification Societies

One of the first Classification Societies was the Lloyds Register of Shipping which was formed as the Register Society  in 1760 by the customers of Edward Lloyd's Coffee House in the City of London. The Society printed its first Register of Ships in 1764 in order to give both underwriters and merchants an idea of the condition of the vessels that they insured. In 1914 the organisation became Lloyds Register of Shipping, not to be confused with the Lloyds of London Insurance Market.

Over the years the number of Classification Societies has grown and now the International Association of Classification Societies has ten members and two associates.

The classification certificate is the document  which confirms that a ship has been designed and built in accordance with the society's rules and, in this respect, is fit for its intended service. To maintain its class while in service, a ship must be surveyed annually, with major surveys every five years. Surveys become increasingly stringent as ships get older.

Classification is vital for the structural and engineering design, construction and operation of ships and  affects shipbuilding, maintenance and repair, shipbroking, chartering, marine insurance, broking and banking.

Failure to meet the relevant standards or non-compliance with recommendations issued as a result of a classification survey may result in the suspension or withdrawal of class -known as disclassing. It follows that statutory certification issued on the basis of satisfactory classification will thus be rendered invalid.

Statutory Surveys

IACS Members undertake statutory work on behalf of individual IMO member states. Well over 100 governments around the world delegate this authority to IACS Members

The most common authorisations are in connection with the Load Line, SOLAS, MARPOL and Tonnage Conventions. Contained in these Conventions are mandatory Codes that address transportation of dangerous goods such as the International Gas and Chemical Codes as well as that addressing safe management practices (International Safety Management Code).

Implications for Cargo Insurance.

Most Cargo Policies will include a Classification Clause which states that cargo carried in vessels classed by IACS members, without any modifications, subject to certain restrictions will be rated according to those rates agreed in the Policy.

The restrictions state that vessels are :
 a) (i) not bulk and/or combination carriers over 10 years of age;
(ii) not mineral oil tankers exceeding 50,000 GRT which are over 10 years of age.

b) (i) not over 15 years of age; OR
(ii) over 15 years of age but not over 25 years of age and have established and maintained a regular pattern of trading on an advertised schedule to load and unload at specified ports.

Chartered Vessels and also vessels under 1000 GRT which are mechanically self-propelled and of steel construction must be classed as above and not over the age limitations specified.

Cargoes carried by Mechanically Self propelled Vessels not falling within the scope of the above are usually held covered subject to a premium and on conditions to be agreed with Underwriters.

Associate members

Croatian Register of Shipping
Indian Register of Shipping