Products & Services

Having covered a vessel’s market value under Hull insurance, an owner may choose to cover the additional costs associated with replacing a lost ship, including sundries such as office expenses, Increased Value/Hull Interest cover meets these requirements.

Often required when a vessel is fitted with a high level of specialist equipment to fulfil a specific project. Examples of this could be equipment employed in:

• Dredging
• Geophysical research
• Cable laying
• offshore exploration or drilling such as remotely operated vehicles (ROV’s)
• Autonomous underwater vehicles (AUV’s)
• Trenchers or ploughs
• Oceanographic survey equipment – buoys
• Towed sonars
• Cameras
• Seismic streamers
• Diving equipment – suits, hats, umbilical’s
• SCUBA
• Diving bells and saturation environments and manned submersibles

Normally used in conjunction with Hull and Increased Value insurance in order to cover anticipated earnings on future freight (revenue derived from movement of cargo) and commonly insured on a Total Loss Only cover. The maximum permissible insured amount varies according to the conditions applicable to the Hull & Machinery insurance.

Protects against risks caused by crew’s negligence or a latent defect in machinery provided the owner has used due diligence to ensure a seaworthy vessel.

This cover protects Mortgagees, often named as additional assureds under a Hull & Machinery policy, for outstanding loans and interest should there be any non-payment of a claim by underwriters due to a breach of warranty by the operator of the vessel.

Expropriation insurance protects against confiscation, expropriation, nationalisation, and other host government actions which deprive foreign investors of their rights of ownership or control of their assets. Related political risks that are covered include:

• Forced abandonment
• Selective discrimination
• Business interruption and “creeping expropriation” which is a series of individual government actions which, taken together, effectively result in expropriation.

This political risk insurance can also cover:

• Non-transfer of dividends
• Royalties, or other funds following the sale of an asset or disposal of an investment
• Arbitral award default and denial of justice coverage for debt and equity investors

Designed to specifically meet the needs of vessel owners in dealing with these risks. Among the benefits are crisis-specialists to assist with negotiating and handling ransom delivery. The policy also normally covers all related costs incurred specifically to secure the prompt safe release of the vessel, crew, cargo, the ransom and certain additional expenses and legal liability.

Global extremists or from domestic turmoil and unrest, businesses face the risk of damage to property, business interruption, forced abandonment/relocation costs and the risk of human casualties/emergency repatriation of staff.

Cover may include terrorism and sabotage, property and equipment damage both domestic and international, business interruption following physical damage, potential third party and employee liabilities.

Also referred to simply as “Defence” in most instances an optional adjunct to P&I cover this insures the shipowner from legal costs associated with either the defence or pursuit of a claim relating to the insured vessel, for example, the legal fees resulting from disputes with charterers agents, in respect of sale and purchase, hull and machinery or loss of hire. Limits are generally upto USD2million or multiples thereof.

Liability of the charterer for damage to the hull or cargo. There are a number of special extensions to the basic charterers liability wording which can be included as appropriate such as:

• Wide definition of vessel damage
• Trapping and blocking
• Charterers bunkers
• Back-to-back sub-charters
• Substitute vessels
• Detention
• Transhipments

The main exclusions from the policy are the risks of General Average, Salvage and Salvage Charges. Demurrage is only covered subject to details of the number of days indemnity and daily indemnity required and then only following a marine peril covered by the policy. Under Time and Voyage Charter Parties charterers are exposed to substantial area of risk where damages are caused to the vessel such as supply of defective or contaminated bunkers, if charter parties charterers warrant that the vessel will always be employed in lawful trades “between good and safe ports or places” and it’s not, damage caused to the vessel by stevedores during loading or discharging operations, damage resulting from over-loading.

Cover needs to be broad enough to address the two basic areas of operations, namely loading and unloading of cargo and storage of cargoes. A stevedore is likely to have responsibility for the cargoes that they are handling and also for third party bodily injury claims resulting from the loading or unloading activity including any incidental movements of the cargo.

The main areas of exposure may be identified briefly as follows:

• Damage to cargo being handled – ranging from such things as damage to motor vehicles whilst being unloaded to the deterioration of cattle due to the failure of a refrigeration unit
• Damage to the vessel from which cargo is being unloaded – Usually caused by the stevedore’s equipment
• Damage to leased/hired equipment – It is common for a Stevedoring Company to supply personnel only and lease or hire equipment necessary to carry out their operations. The contracts for such hire or lease invariably create risk exposures
• Contractual liability exposure – Working within a port area any company will find itself required to sign contractual agreements regulating its relationship with the port authorities and other companies working there and these will create liabilities that must be covered
• Third Party Bodily Injury and Property Damage – in the situations where other parties and/or their property can come into contact with the operations being covered
• Errors and Omissions – attributable to a failure to provide the represented services or where due to the incorrect application of expertise a loss results.

U.S. COFR (Certificate of Financial Responsibility) covers the legal liability in the event of an oil incident or release of a hazardous substance. A COFR is required by all vessels exceeding 300 gross tons using the navigable waters of the U.S. In addition, any vessel, regardless of tonnage, that is lightering or transshipping oil in the U.S. must have a COFR.

Most time charters contain off hire clauses which may be triggered when the vessel is damaged. Shipowners may suffer significant losses when faced with the time lost during repairs. Loss of Hire is designed to cover this exposure when the ship is wholly or partially deprived of income whilst repairing damages.

There are three main categories of strikes risk for which a Shipowner or Charterer of vessels can cover themselves as follows:

• Against loss of their ships’ daily running costs when delayed by a strike or lockout during the actual period of a strike, but excluding a strike by the crew of the entered ship.
• Against loss of their ship’s daily running costs when congestion has caused a delay after the end of a strike or lockout.
• Against loss of their ship’s daily running costs arising out of a strike of the entered ship’s officers or crew.

Cover can also cover strikes by workers in factories, mines or transport which interfere with the movement of cargo to or from a port, facility or vessel.

A break in the supply chain can result in lost revenues and profits as contracts are not won or fulfilled, extra costs may be incurred in sourcing alternative supplies from elsewhere; difficulties in distribution can result in contract cancellation or contractual penalties being incurred. Trade Disruption protects against the effects of such disturbance and policies may encompass physical, logistical and political perils and are a valuable means to ensure the liquidity and balance sheet integrity of a company.

This cover is designed for companies that import, distribute, or export merchandise. The policy provides cover for all moveable goods (inventory) that are the subject of the insured’s trade, including raw materials, semi-finished, and finished products. The goods are covered at all times whether in transit, undergoing process (although damage caused by the manufacturing process is excluded), or in storage at owned or third party premises.

Purchasing a separate stock throughput policy rather than basic transit coverage in a property “all risk” insurance policy can provide seamless coverage of goods (preventing overlap in cover and more importantly gaps), will produce premium saving and more control of inventory risks throughout the entire supply chain, from the supplier or point of origin through the goods’ final destination.

Covers loss of or damage from strikers, locked out workmen or persons taking part in labour disturbances, riots or civil commotions, terrorism, violence or political motive.

There is virtually nothing too large that cannot be transported. Generally anything that cannot be sent by container or other conventional method is categorized as a project cargo. They often involve heavy objects, over a ton in weight or large, long or awkward objects.

Very often plant and equipment is assembled and then loaded onto special transport platforms for movement sometimes short distances other times over continents. Other examples are boilers, generators, turbines, reactors, boilers, engines and machinery, vessels, trains and military equipment.

All these items can be covered for movements by any conveyance on all risk conditions including storage and installation. Coverage can be extended to include loss of anticipated earnings or profit and expenses including delayed start-up expenses.

To cover Banks and Traders interest in raw materials such as aluminum, copper, nickel, gold, silver but also coffee, cocoa, cotton and orange juice. This type of policy will include cover during storage and transit by any conveyance over land, water or air by steamer, barge, parcel post, road, rail or messengers and every conveyance overland or by inland waterways of any description.

This specialized insurance provides coverage for rejection or condemnation of the goods or cargo by government, port, health or veterinary authorities. Typically the cover is sought for seafood, meat and certain agricultural produce.

Cover is normally arranged for a sea voyage from port of departure to port or place of destination and terminates on arrival at warehouse or store. Period of cover can be extended for an inland transit or until the goods have been passed as fit by the government of the country of import. Normally the goods need to be produced, prepared and packed in accordance with regulations of country of origin and inspected as fit prior to commencement of risk.

Exposures in relation to the ownership and leasing of containers. The requirement is normally for physical loss or damage and third party liability solutions to protect these valuable business assets in this highly specialised and compact market. In addition it is often required to cover chassis liability and this cover is available.

Freight forwarders insurance covers liability, errors and omissions and marine cargo. Cover is designed to provide protection up to the limits of liability outlined within the trading conditions, or by international convention or as otherwise agreed, where appropriate. The main conventions normally affecting international trade are either Hague-Visby Rules: sea transport, CMR Conventions: road transport, Warsaw Convention: air transport.

For further details of the Marine Cargo insurance products please refer to the above section.

Errors and omissions covers mistakes in handling the minefield of various shipping terms and conditions and customs requirements. Claims made arising from breach of duty, negligent act, error or omission such as incorrect instructions, faulty arrangements or clerical errors or omissions.

Offered an as optional extra to property insurance. Covers loss of income during periods when the insured cannot trade as usual due to a loss from an insured peril. This cover aims to place the business back in the same trading position it was in before the event occurred covering loss of pre-tax profits. Most business interruption policies, but not all, provide cover for ICOW (Increased Costs of Working) which relates to expenditure incurred by the Owner of the business in restoring it to its pre-loss position (eg overtime payments to staff etc.).

This policy cover the loss of rent or rental value to an insured peril that renders the leased premises uninhabitable, thereby excusing the tenant from paying rent.

The main areas of our comprehensive range of services for the construction industry encompass construction all risks, erection all risks, public / products liability, employers liability, delay in start-up, non-negligent liability, professional indemnity, environmental liability, latent defects, performance bonds.

Protects loss or damage to vessels at all times whilst in the ship repairers care, custody and control including whilst being worked upon, being shifted in tow or otherwise or on trials. The basis of cover is normally the London market wording which covers:

• Loss/damage to the vessel in the care of the Assured for the purposes of being worked upon
• Shifting and moving within the port confines, including trial trips
• Loss/damage to cargo etc. on or discharged from the vessel being subject of repair
• Loss/damage to machinery whilst removed from vessel for the purpose of being worked upon, including whilst in transit between vessel and repairers premises
• Removal of wreck
• Loss/damage to Third Party property arising from ship repairing activities
• Sudden and accidental Seepage & Pollution

Dependent on the location of the yard and facilities it is possible that more than one vessel could be damaged in the same accident; a common cause would be fire, which could spread to other vessels in the yard awaiting repair or re-delivery.

The standard cover afforded by the London market wording form as written does not include liability for third party bodily injury, loss of life or personal injury although cover for these exposures is available by negotiation.

Ship Repairers Liability (SRL) insurance is designed to provide cover against liabilities arising from acts of negligence which result in loss or damage to the property of others whilst being worked upon at the yard or personal injury to others whilst visiting the yard.

• Other work, being repair and modification operations carried out by the yard which do not fall with the scope of ship repair
• Coverage for workmen employed by the Assured whilst away from the yard, including whilst repairs are carried out onboard vessels or rigs or at other yards
• Legal liability for death or personal injury (other than liabilities arising under employers’ liability or workmen’s compensation schemes)

Every shipyard will have a unique blend of exposures created from the type of vessels under construction and the facilities of the yard. Institute Builders Risks Clauses covers the builder for physical damage to a vessel while under construction and it is usual to supplement the standard cover with extensions to address the specific exposures appropriate to the operation.

In addition to providing cover for physical loss or damage, insurance cover will normally also include cover for third party liabilities, damage arising from faulty design, sea trials, war risks (whilst waterborne) and strikes coverage. Where appropriate, cover can be extended to include cargo risks for parts and machinery during storage and transportation to the yard, towage of a hull from a sub-contractors yard and expenses incurred by the yard following postponement of a launch.

The yard will need to consider covering the following:

• Physical loss or damage to the vessel under construction
• Liability to third parties
• Physical damage to ship yard buildings and assets
• Loss or damage to parts, equipment in store
• Loss or damage to parts in transit
• Penalties arising from delayed or non-delivery
• Loss of revenue
• Employers liability, public liability, contractual liability and general liability

Shipbuilding construction contracts usually incorporate guarantees given by the builder which warrant against faulty workmanship or defective materials used in the construction of a vessel. Such guarantees usually run for 12 months following delivery of a vessel or rig, although the warranty period may extend beyond 12 months for specific parts or materials used in construction.

Cover will customarily include costs of opening up, dismantling, repairing, refitting and replacing of faulty parts or workmanship at the builders yard. Where required, coverage may be extended to include cost of travel to other locations (eg if it is not practical for the vessel to be returned to the original yard) and increased costs of repair at alternate shipyards.

These insurances are designed to protect the builder against loss of interest and financial penalties in the shipbuilding contract following delay or non-completion of a vessel under construction. The trigger for a claim under the Delay in Delivery policy is generally linked to an insured peril under the Builders’ Risks insurance. Cover may also be provided where a buyer lawfully refuses delivery of a vessel, following a delay. The nature of this cover means it is normally available only to established shipyards with a proven track record of delivering vessels within acceptable parameters.

Losses arising from delay are covered separately from those arising from total loss or contract cancellation. The risks covered as defined by the insured events are, however, the same. There are four classes of insured events each one has, as a starting point, that all events within the group are covered subject only to the specified exclusions. This approach makes for simpler clauses and is more favourable to the Assured. It also means that we can avoid the notorious phrase ‘latent defect’ which has caused so much confusion and litigation.

All damage to the vessel or any part of it is regarded as an insured event unless proximately caused by one of a limited number of standard exclusions. The Insured Events can be categorised as follows:

• Physical loss of or damage to the vessel or any part thereof including loss or damage during transportation
• Damage to the premises, plant or equipment of the Builder or any sub-contractor including any contractor for Buyer’s supplies
• Failure during launching, even though there is no damage to the vessel or yard or the blocking of any waterway, harbour etc., or any transport way or facility on land by any physical obstruction
• Any event defined as force majeure in the construction contract

Dependent on the location of the yard and facilities it is possible that more than one vessel could be damaged in the same accident; a common cause would be fire, which could spread to other vessels in the yard awaiting repair or re-delivery.