P&I INSURANCE
Owner’s liabilities are the contractual and legal liabilities arising from owning and/or operating a ship.
Owner/manager’s vessel will be insured under P&I insurance warranted that the risks have occured either from legal /contractual liability of the owners or the risks are derived from peril’s of the sea.
Vessel will be covered for following risks when vessel is total loss or contractual total loss.
Cover is being provided mainly in the following sections:
- crew claims
- stowaway claims
- collision (unless otherwise specified only ¼ of collision liability is under P&I cover, remaining is included with hull and machinery policy under London, Institute Time Clauses- Hulls.
- wreck removal
- cargo claims
- pollution and mitigation expensed
- towage risks during towage of vessel
- fines and confiscation
- quarantine expenses
| FREIGHT, DEMMURAGE & DEFENCE |
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This type of insurance covers the legal costs and expenses, which a Shipowner is incurs due to a dispute arising under the Charter Party or as a result of a dispute with any party related to the carriage of the goods for which a vessel was chartered.
The reasonable legal costs and expenses are covered in respect of claims and disputes in connection with: hire or off-hire, freight, deadfreight, detention, laytime, demurrage, despatch or any other claim or dispute under the Charter Party, Bill of Lading or another contract of carriage in respect of the Insured Vessel.
It is at Club’s managers discretion as to which risks/expenses would be covered.
| HULL & MACHINERY INSURANCE |
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It is the line of insurance that covers hull, machinery and equipment installed on the vessel against the various perils during the voyages it runs between the ports, whilst operating in the ports, upon anchorage or during their repair or maintenance processes on dockyards.
This insurance is designed to indemnify the shipowner against loss of or damage to ship and liability of shipowner arising from maritime perils which include perils of the sea and other similar perils for a specific period of time, mostly one year.
The policy insures vessels for losses or damages resulting from:
- Perils of the sea such as heavy weather stranding or collision
- Fire
- Lightning
- Explosions
- Loading or discharging cargo
- Going on or off dry docks and marine railroads
- Negligence on the part of the captain and/or crew
- It also provides the insured vessel with liability protection against damage to other vessels in the event of a collision, usually 3\4.
| WAR & STRIKES INSURANCE: |
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War and strikes insurance covers the vessel agains loss or damage to the vessel caused by:
- war, civil war, revolution rebellion insurrection or civil strife arising therefrom or any hostile act
- capture, seizure arrest restraint or detainment and the consequences therepf
- derelict mines, torpedoes bombs or derelict weapons of war
- strikers locked out workmen
- terrorist attack
- confiscation or expropriation
| INCREASED VALUE INSURANCE |
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Increased Value cover protects the shipowner against any difference between the insured value of the vessel and the market value of the vessel.
Ship values fluctuate during the policy year. If values fall, the assured still has sufficient protection in his H&M policy; but if they rise, the assured will not receive sufficient protection for a total loss under his h&m policy to pay for replacement vessel. To provide adequate cover in this respect the assured my wish to protect himself with an increased value insurance as a hedge against inflation and, because it is on a Total Loss Only basis, the premium payable for the IV (Increased Value)policy is lower than would be the case were the insured value under the H&M policy to be increased.
| LOSS OF HIRE INSURANCE : |
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The insurance cover loss due to the ship being wholly or partially deprived of income as a consequence of damage to the ship which which is recoverable under the condition of clause.
The damage that prevents the vessel from sailing regularly has to be recoverable under the Hull and Machinery policy in order to be claimed under a Loss of Hire policy. The insurance does not cover loss of time resulting from a casualty which gives the Assured the right to compensation for total loss. The advantages of the Loss of Hire insurance are very often underestimated as are the financial repercussions, which could occur in consequence of an Hull & Machinery claim. Nearly every Hull & Machinery damages also causes unemployment for the vessel during the time of the repair. During this time the vessel can be "off hire" with no earnings being possible in this time. Nevertheless the daily costs have to be paid and beyond this, the actual loss of time for the vessel can be higher than the time actually needed for the repair. This occurs when the delivery of replacement parts takes a long time or the vessel has to be moved to a far-away/distant shipyard.
The insurance also cover loss due to the ship being wholly or partially deprived of income:
- because it has started
- because it is prevented by physical obstruction ( other than ice) from leaving a port or a similar area, or
- as a consequence of measures taken to salvage or remove damaged cargo or
- as a consequence of an event that is allowed in general average pursuant to the 1994 York Antwerp rules.
| BUILDERS RISK |
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The policy cover all risks, subject to exclusions- that would occur during the course of construction process, including launching and trial periods until final delivery to the Owners of the vessel.
| TERMINAL OPERATORS LEGAL LIABILITY INSURANCE |
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This insurance type provides coverage against liability for loss or damage to vessels, cargo and property of others while in the custody or control of the terminal, dock, wharf or pier operators.
The term ‘terminal’ has a broad definition, which may include the material goods and activities surrounding wharves, piers, docks, stevedores, storage tanks and warehouses. Because of this, the cover is usually tailored to clients’ needs and frequently extended to include stevedores’ liability which provides insurance protection against claims arising out of cargo-handling operations.
Key information requested :
- Types of operation performed
- Contracts/Indemnities (ex. Subcontractors)
- Annual volume
- Information on property and equipments
- Loss Prevention measures
- Claim History
| SHIPOWNERS LIABILITY |
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SOL or Shipowners' Liability to Cargo is a common term used to describe the insurance arranged to cover a member's liabilities arising from a breach of contract of carriage, where such a breach deprives the carrier of the right to rely on defences or rights of limitation which would otherwise have been available to him. A typical SOL example is geographical deviation or departure from the contractually agreed voyage; liability for loss of and/or damage to cargo arising out of such a deviation falls outside the scope of standard P&I.
Following situtations normally require SOL insurance to be arranged; Geographical deviation of the vessel from the contractual voyage; cargo being carried on vessels other than that named in the bill of lading; cargo being loaded on the vessel after a casualty prior to dry-docking or repair; cargo being carried beyond its destination and returned by the same vessel; cargo being shipped on board vessels other than those of the member prior to the delivery of such cargo to the member's vessels for the carriage thereof and similarly after such carriage; cargo, including mail and/or merchandise, being stowed in spaces not certified for the carriage of cargo; cargo remaining on board the vessel during dry-docking; cargo being transferred to and/or from and/or being carried on board feeder vessels; cargo being transferred from one point to another by water and/or rail and/or air and/or motor trucks and/or other conveyances; cargo being transhipped at any port or ports, place or places (including both under-carriage and over-carriage of cargo) instead of being carried on board the original vessel to the destination stated in the bill of lading; cargo being discharged from and reloaded upon the same vessel and/or cargo being shifted within the confines of the vessel for any reason whatsoever at any port or place of shipment or destination and/or at any port or place between the point of shipment and the point of destination; cargo being discharged onto lighters at any port or place prior to the surrender of bills of lading by the consignees or their representatives; cargo being lightered to other than the scheduled loading or unloading berth; cargo being stored on lighters before loading or after discharging from vessels.
STRIKE INSURANCE
Strike Insurance also called Delay Insurance is provided by The Strike Club which works similar to mutual clubs (advance call, supplementary call, release call). The concept of the cover is the time lost in situations that the other traditional policies are not fully cover or not cover at all.
Covers are segmented into classes:
Class I - was created to protect ship owners against financial losses because of delays caused by shore labor disruption
Class II – was introduced to include delays caused by congestion after the end of a strike
One example is the disruption of loading or discharging operations because of destroyed port facilities due to heavy weather such as Katrina or deviations to other ports and consequent transshipment costs.
Class III - was introduced for delays due to crew strikes
Cover later extended further for delays caused by collision, grounding, stranding,
striking FFO’s as well as fire, explosion and breakdown of machinery.
An example is the deviations to other ports due to breakdown of several piston rings in machinery or deviations for repair due to collision with another vessels or time lost during repairs following a physical damage to ship.
| CHARTERER’S LIABILITY |
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This coverage provides insurance for a time charterer, voyage charterer, a charterer in partnership or space charterer in relation to a charter party of an insured vessel.
Under usual clauses the policy would cover :
- Physical loss of or damage to the vessel
- Demurrage, detention and loss of use of the vessel following physical damage
- Contribution to general average, salvage, salvage charges, and/or sue and labor expenses in respect of owner’s interest as Charterer in hire, freight and/or bunkers.
- Physical loss of or damage to the vessel as a consequence of war or strikes activities.
| MORTGAGEE INTEREST AND MORTGAGEE INTEREST- ADDITIONAL PERILS |
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MII provides cover in respect of perils which are covered by the vessel’s policy (and / or club cover ) but not paid for one of the following reasons.
- Breach of warranty, Unseaworthiness, breach of warranty, non- payment of premium, class and or ISM breach, misrepresentation, etc.
In addition to the above, MII policy responds at situations where a claim under a Hull policy not being proven to be caused by a peril of the sea, where vessel sinks and the cause is not proven, disputes between Hull and War underwriters and also time barred claims.
MII-Additional Perils
Responds to situations and liability claims –pollution – for an insured peril, where Owners pandi policy limits are not adequate. Particularly important where Shipowner has arranged a “fixed premium” pandi insurance for limits less than available from a mutual entry in an IGA club.
| PORT RISKS |
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Port Risks Insurance is a time policy covering the loss of or damage to the ship which is confined to a specified area. An alternative form of cover allows the ship to navigate outside the port area.
This is a more extensive type of hull time policy covering the full fourths of collision liability and protection and indemnity risks
| SHIP REPAIRER’S LEGAL LIABILITY |
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The policy will indemnify for loss and damages Assured for legal liabilities arising out of Ship repairers activities, on vessel or craft which is in care/custody /control of the Assured, including cargo on board or discharged from subject vessel.
| AQUACULTURE INSURANCE |
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This is a type of insurance to minimize the complex risks of the fish farm industry. A standard aquaculture insurance policy would provide cover for following risks;
- Pollution incidents
- Theft
- Storm damage
- Freezing, supercooling, ice damage, frost damage, frazil ice
- Electrical breakdown
- Deoxygenation due to competing biological activity
- Any other sudden change in concentration of the normal chemical constituents of water including change in pH or salinity
- Disease
- Predator attack
| YACHT INSURANCE: |
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This insurance covers loss or damages occurred on the vessel under the standard clauses listed below.
- perils of the sea rivers lakes or other navigable waters
- fire
- jettison
- piracy
- contact with dock of harbor equipment or installation, land conveyance, aircraft or similar object or objects falling there from
- earthquake volcanic eruption or lightening
- accidents in loading, discharging, or moving stores, gear, equipment, machinery or fuel
- theft of the entire vessel or her boas, or outboard motors provided it is securely locked to the vessel or her boats by an anti theft device in addition to its normal method of attachment
- latent defects in hull or machinery, breakage of shafts or bursting of boilers
- the expenses of sighting the bottom after stranding even if no damage is found
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