Any person or company chartering a vessel is partly responsible to the ship and its cargo
Even the most careful charterer can face a claim for liability in the event of loss, damage or injury to the vessel its cargo its crew or third parties.
In a worst-case scenario, these liabilities could amount to millions of dollars.
But unlike Shipowners’ P&I insurance, Charterers’ Liability insurance is not a mandatory insurance by law, facultative. Charterers may be required to provide bank guarantees as security for any claims and face the full costs of any legal liabilities that arise while they are chartering the vessel.
Standard industry contracts such as the Gencon and NYPE Charterparties state that Charterers are liable towards the owners of the vessel for a wide range of potential liabilities including:
- Providing a safe port/berth/anchorage
- Loading/stowing/discharging
- Acts of stevedores as servants of the charterers
Remember, wherever the ultimate liability lies, in the first instance the charterer is liable to reimburse the owner and may have to pursue their own claim against a third party. If something goes wrong, these open- ended risks can result in substantial costs, but there is an alternative.
Charterers’ Liability insurance can provide full cover of any legal liabilities, costs and expenses that arise in respect of the Operation of the Insured Vessel. These include:
- Liability to people
- Liability to property
- Liability to the environment
Some charterers still resist taking out insurance, often because they do not fully understand the liabilities to which they are exposed or, never having experienced a claim, they believe they never will.
If this is you, we recommend reading Ten reasons for not buying Charterers’ Liability Insurance. It may make you think again.
Our Charterers’ Liability products can provide insurance against the full range of risks, provide support against claims, and cover any costs of claim.
What does it cover There are plenty of things that can go wrong when chartering a vessel – from lost cargo and hull damage, to passenger, crew or third-party injuries. Our product is designed to cover you for these liabilities, but more importantly we are there to help prevent risks and, if things do go wrong, to help mitigate the costs and disruption to your business.
Typical clients Charterers’ Liability cover is specifically designed for operators, freight forwarders, traders, manufacturers, the offshore wind industry and any other party chartering a vessel for any purpose.
Although we always aim to build your cover around your business, Charterers’ Liabilities fall under three broad categories:
- Loss of or damage to the chartered vessel, including damage caused by stevedores, an unsafe berth/ port or use of the wrong fuel.
- Liability to cargo, including loss, damage, late delivery, or delivery to the incorrect port.
- Other marine liability risks, including death, injury or illness suffered by the crew or third parties, collision, pollution, salvage, or fines.
Additional cover options War P&I Global trading and operations can face significant risks due to a civil or international conflict. Our War P&I keeps you protected against liabilities arising during war.
Marine Defence (FD&D) A dispute arising from charter parties and other contracts, can lead to significant legal costs. Our Marine Defence product can provide protection.
Tailor-made additional Every situation is different and when standard Charterers’ Liability is not enough, we offer a wide range of additional covers like War, Bunker insurance, Freight insurance to ensure you are fully protected.
