INSURANCES 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 “Defence” 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.

Deductible: Usually a %-age of any legal costs

 
 
 
 

Strike & Delay (Charterers Risks)

This insurance covers the losses normally being the charterers risk. Usually this is bought by covering Strike and/or Delay.  We are flexible with regards to the number of days covered and the number of deductible days. For ease of reference the perils are:

Perils covered ashore

Cover for costs owing to shoreside events.

Strike

  • A strike

  • Lockout

  • Resistance 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

 Delay

  • 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

Cover for consequential costs owing to shoreside events
Usually these delays occur due to congestion.

  • The daily cost for the insured vessel due to delay caused by a peril covered under strike and delay cover as listed above.