Benefits of FD&D to a Charterer
International trade relies heavily on maritime transport and often, people don’t realise just how much we all benefit from it. Without shipping, the import and export of food, medicines, and every other good would not be possible. In fact, according to the International Chamber of Shipping, 90% of world trade is done by the international shipping industry and over 50,000 merchant ships transport different kinds of cargo internationally.
Every country relies on shipping to buy what they need and sell what they have. In the UK, especially, the demand continuously grows. According to Maritime and Shipping Statistics, total freight tonnage in major UK ports increased by 6% to 119.3 million tones from January to March 2019, compared with January to March 2018.
In an industry as large and as indispensable as maritime transport, the stakes are high. And it’s not uncommon for disputes to arise and accidents to happen. This is where marine insurance comes in.
Why get Marine Insurance?
There are different types of marine insurance but every kind is developed mainly for one reason: managing and minimising risks in case of loss or damage to property or even loss of life. In order to manage these risks without the problem of lacking in monetary funds, maritime insurance was made compulsory for shipowners.
According to Marine Insight, maritime insurance policies are based on the Marine Insurance Act of 1906. While there are different kinds of marine insurance, one kind that ship owners and charterers would greatly benefit from investing in is Freight, Demurrage, and Defence Insurance.
The value of FD&D
Freight, demurrage and defence insurance compensates shipowners and charterers legal costs that are due to unexpected events and accidents. This maritime insurance protects them from losing money in case they face increased costs, operational expenses or legal challenges. It is legal cost insurance that covers the cost incurred from disputes that may arise from owning and operating a vessel.
Here are some of the most common disputes that an FD&D Insurance can help you with:
- Disputes in laytime, dispatch, and demurrage
- Underperformance of vessel
- Passenger and crew claims
- Building, mortgage, and sale contracts of the ship
Investing in an FD&D Insurance also assists the shipowner in minimising the risks of the business. FD&D insurance will pay for the cost of legal advice, including mediation, arbitration, or litigation in order to end up with a resolution. Additionally, another great value of Freight, Demurrage and Defence Insurance is that it gives the insured immediate access to legal advice whenever there’s a need for it.
Preparing for possible risks
No one can predict the kind of disputes that may arise, and it’s always better to be prepared and think ahead than lose assets in the end. The MECO Group takes pride in having an international team of trusted and reputable marine insurance professionals that can help you to stay safe and secure in a high-demand industry such as shipping. Currently, we have insured over 400 charterers and 16,000 vessels which we consistently provide with support and advice that properly
Find the right insurance that can protect you against the risks you’ll face in the industry. For charterers, the MECO Group offers high-quality insurance products to protect you from liability risks. We have insured more than 400 charterers and 16,000 vessels from large shipping companies and cargo interests.