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Insurance for owners


Hull & Machinery insurance (H&M)

Covers physical loss or damage to the hull and machinery which constitute the ship itself.

The primary insurance against physical damage to the vessel. The vessel is insured to its full value, whereby the insurance, depending on the extent of protection chosen, compensates total loss of the vessel, salvage, partial damages to one's own vessel, collision liability, ice damages, engine-damage, and the vessel's contribution to general average.

Hull Interest insurance (HI), Freight Interest insurance (FI)

Compromised, Constructive and Total loss of vessel, as an addition to H&M

Hull Interest insurance is for total loss (TLO) only and will be paid out following a TLO settlement on the H&M policy. The sum insured of the Hull Interest insurance is allowed upto 25% of the sum insured in respect of H&M. War & Strike risk are excluded but will be covered by a separate War insurance (see below).

Sums insured: 25% of H&M values above

Deductible: Nil

Freight Interest Insurance will cover for loss of anticipated profit from running of the insured ship in the case where the ship becomes a total loss, i.e. this insurance is based on the same conditions as Hull Interest insurance.

Sums insured: 25% of H&M values above

Deductible: Nil

Loss of Hire insurance (LOH)

Loss of Hire insurance protects the shipowner against losses where the ship is wholly or partially deprived of income as a result of the vessel being out of operation. Please note the following HM perils.

The owner may like to protect himself for loss of income if the ship comes off hire due to a particular average. The insurance for this risk is the Loss of Hire (LOH). Such an insurance will indemnify the assured up to an agreed daily amount. However, the UW:ers will require a deductible and to limit their exposure they will also put a cap on the cover in way of maximum number of days per incident and over the year. A normal cover will be 14/90/90, which means that the assured will be paid the daily amount but not more than 90 days per incident and 90 days over the policy period. For each incident a qualification period of 14 days will apply. War risk are normally also included in the cover. LOH will not pay out following a TLO of the ship.

Usual deductible: 14 days


A tailor-made and adapted to the vessel's other insurances. Please note: Includes War P&I as all war actions are excluded from P&I.

Cover against War, Strikes, Riots, Civil Commotions etc. Generally, but not always, arranged separately to a vessel’s Hull and Machinery Insurance and extended to include War Protection and Indemnity Risks. Trading to ‘Excluded’ areas (as defined within the London Market’s list of excluded areas) is customarily subject to specific agreement.

Note: When trading in war areas or in areas deemed to be enhanced risk, underwriters will offer cover provided an additional premium is paid. During such visits to “war areas” it is normally considered to also take out Kidnap and Ransom, and detention (due to piracy) insurance for any loss of charter hire not paid by charterers.

Sums insured: H&M + Hull Interests + Freight Interests

Deductible: Nil

War – Trading to War Area as defined by JWLA 022

Additional insurances required if vessels are to trade to areas decribed in JWLA 022, please contact us for further information.

  • War Risks extention to the trade
  • Kidnap & Ransom
  • Piracy Detention Cover - Depending on charterparty terms, the Charterer is usually liable to continue to pay charter hire should the vessel be hijacked or detained by pirates irrespective if this is inside or outside of War Risks Areas.

Protection and Indemnity insurance (P&I)

A Liability insurance for practically all maritime liability risks associated with the operation of a vessel.

Broadly speaking, it covers the liabilities which may be incurred by the vessel or her owners on account of loss of life or personal injury, or on account of damage to property other than that covered under the collision clause of the Hull Policy. Coverage also includes defence costs, liability for oil pollution and wreck removal as well as owners liability for his crew.

The P&I insurance offers the owner insurance cover for claims or damages occurring to a third person. As such, P&I insurance will protect the owner and his legal liabilities towards a third party. “Third parties” are any person, apart from the shipowner himself, who may have a legal or contractual claim against the ship.

  • Death and Personal injury - P&I cover an owner’s liability for all deaths, personal injuries and illnesses which occur on board, including death or injury to crew, passengers, stevedores, pilots and visitors to the ship.
  • Repatriation of sick or injured crew
  • Loss of or damage to cargo
  • Other risks - Other risks covered include liability for stowaways, liability for oil pollution and other types of pollution and legal liability for wreck removal if the ship sinks and is blocking free navigation for other vessels.

Please note it is an indemnity policy and “pay to be paid” might be upheld strictly.

Liability Extensions required for “deviations”

Deviations are NOT covered by normal P&I Insurance.

  • Deck Cargo - A normal Bill of Lading stipulates that cargo shall be stowed under deck. If the carrier despite this carries some cargo on deck (which is normal in the timber trade) he is liable without limitation to any damage resulting from this breach of the contract of carriage. The carrier can cover such liabilities by a separate insurance.
  • Deviation - This insurance covers liability for loss of or damage to cargo arising out of a geographical deviation or another breach of the contract of carriage amounting to a deviation in the widest sense (see e.g. Deck Cargo).

Freight, Demurrage and Defence (FD&D)

Optional defense cover for contractual disputes.Also referred to simply as “Defense” insurance.

In most instances an optional adjunct to P&I coverage. This insures the ship owner from legal costs associated with either the defense or pursuit of a claim relating to the insured vessel, for example, the legal fees resulting from a charter party dispute.

Note: This is a discretionary insurance for legal costs in relation to any contracts that the Owner has entered into. Please be reminded that the insurer will decide which cases has a merit, and will not support cases where the merits are not good.

Usual deductible: A %-age of any legal costs.

Strike & Delay (Owners Risk)

Class III - Cover for costs owing to ship related events.

This insurance is a delay-cover for a whole array of perils. As a combination with normal Loss of Hire- they do offer some marine perils such as stranding, grounding, collision as well as machinery damage (the latter, however on very strict basis). These perils are offered with a low deductible (4 days (but machinery 7 days)) and can be combined with a traditional LOH to offer an enhanced cover. It is also very common that the Strike Club will also add delay cover for some P&I incidents with only one day deductible.


  • Crew and officers strikes
  • Collision, stranding, grounding, or striking of fixed or floating objects
  • Illness, injury, death on board or directly caused by the entered vessel
  • Actual or alleged presence of drugs on board
  • Desertion of members of the crew
  • Quarantine Actual or alleged pollution by the entered vessel
  • Certain detentions of an entered vessel in the same beneficial ownership or management
  • Stowaways, saving life at sea, rescuing of refugees
  • Fire, explosion or breakdown in machinery
  • Piracy, kidnap and ransom
  • War, civil war or any hostile act by or against a belligerent power

Typical cover (excl onboard strike) is as follows:

Type of Cover Class III (onboard incidents (“Owners risks”))

  • Rule 10(a)(ii) – Grounding, Stranding, Collision: 10 days in excess of 4 days deductible
  • Rule 10(a)(iii to ix) – Delay (pollution, medical, deviation sickness, etc.): 10 days in excess of 1 days deductible
  • Rule 10(a)(x) – Machinery damage, fire explosion: 7 days in excess of 7 days deductible
  • Rule 10(a)(xi) - Piracy, Kidnap & Ransom: 10 days in excess of 2 days deductible
  • Rule 10(a)(xii) – War, civil war, …: 10 days in excess of 2 days deductible

There are many ways to combine this Class III cover with the LOH. One economic way is to take Class III but at the same time increase deductible days under the traditional LOH. Please note that basic cover Class III can include delay caused by piracy (but for a basic period of 10-14 days).


Insurance for managers


Managers Professional Indemnity Insurance

Professional indemnity insurance provides cover for claims brought against you for losses suffered by your customers as a result of your negligence or error and omission. These claims can extend to subcontracted services for which you were the agent, representative or lead contractor.

Examples of claims:

  • Failure to maintain ship – one of the largest claims paid by ITIC was as a result of a delay to the repair of a ship.
  • Appointing unqualified crew - if the crew are not certified to perform the jobs for which they are hired, the owner will be in breach of the terms of his insurances and the ship manager will be liable.
  • Failure to arrange insurance – ITIC has seen reports of claims against ship managers where banks or ship owners have sued them for negligence in failing to arrange adequate insurance.
  • Error in fixing ship – for example a ship with a Cyprus flag being fixed to discharge in Turkey.

Insurance for charterers


Charterers Liability insurance (CL)

A charterer needs standard P&I cover for the same risks as are usually insured by an owner – and will therefore have cover for his direct liabilities to third parties in respect of risks.

  • Cargo - A charterer will be liable directly to the owner of damaged or lost cargo when he is the carrier under his own bill of lading, or, as may happen in some jurisdictions, if he is considered to be the carrier under an owner’s bill of lading.
  • Pollution - In certain jurisdictions a charterer can incur direct and strict liability for pollution caused by the ship by force of law due to the vessel’s operations (e.g. OPA 90 in the USA).
  • Third Parties - A charterer may incur liability directly to a stevedore, or any third party, who suffers personal injury or property damage, as a result of the charterer’s negligence, such as improper description of noxious cargo resulting in injury.
  • Fines - A charterer, if falling into the definition of “carrier” (the entity that controls the vessel), can be subject to fines.
  • Indemnification of owners - A charterer will have an obligation to indemnify the owner for third party liability where this results from a breach of the charterparty by the charterer, or arises out of activities which are the charterer’s responsibility, such as orders to proceed to unsafe port, dangerous goods, stowage incident such as under NYPE clause 8 where charterers are responsible loading, bunker quality.
  • Damage to hull - Charterer may become liable for damage to a ship. Traditional P&I liabilities are also situations where the chartered ship may be damaged and the costs thereof may be recoverable from the charterer.

Charterers Freight, Demurrage and Defence (FD&D)

Optional defense cover for contractual disputes. Also referred to simply as “Defense” insurance.

In most instances an optional adjunct to P&I coverage. This insures the ship owner from legal costs associated with either the defense or pursuit of a claim relating to the insured vessel, for example, the legal fees resulting from a charter party dispute. Note: This is a discretionary insurance for legal costs in relation to any contracts that the Owner has entered into. Please be reminded that insurer will decide which cases has a merit, and will not support cases where the merits are not good.

Usual deductible: A %-age of any legal costs

Strike & Delay (Charterers Risks) - Class I: Perils covered ashore

Class I and II cover the losses normally being the charterers risk. Usually this is bought by covering Strike and/or Delay. The Club is usually quite flexible as regards the number of days covered and the number of deductible days. For ease of reference the perils are:

Cover for costs owing to shoreside events


  • A strike
  • Lockout
  • Resistant of labour (whether partial or general)
  • Revolution
  • Rebellion
  • Riot
  • Political protest
  • Civil commotion
  • Action by environmental objectors or religious zealots when such an incident deprives the entered ship of necessary goods, services or facilities
  • Stoppage
  • Insurrection


  • Fire, explosion or mechanical breakdown on land
  • Storm, tempest, flood, sandstorm, snow, ice, fog or lightning
  • Earthquake, volcanic eruption, avalanche, heave, landslide or subsidence
  • Aircraft impact or accident, or delay to or misdirection of air cargo
  • Accidental loss of or damage to any vehicle, vessel or aircraft carrying or transhipping cargo or spare parts to or from the entered ship
  • Partial or total closure of any port, berth, sea-lane or navigable waterway as a result of an order made lawfully by an authority of competent jurisdiction
  • Physical obstruction, high or low levels of water in any port, berth, sea-lane or navigable water
  • Closure of any border for political purposes or the imposition of any import or export controls, embargo or prohibition
  • Physical or electronic damage caused by strikers, locked-out workmen, vandals, terrorists, saboteurs or malicious persons
  • Expropriation, confiscation or seizure of a cargo loaded, partially loaded of discharged or intended to be loaded on board the entered ship

Strike & Delay (Charterers Risks) - Class II: Cover for consequential costs owing to shoreside events

  • The daily cost for the insured vessel due to delay caused by a peril covered under class I.
  • Usually these delays occur due to congestion.



For information about our claims services, visit the claims page