Defence (FD&D) Insurance
FD&D Insurance (Freight, Demurrage and Defence) covers a Charterer against any legal costs or expenses resulting from pursuing or defending claims arising from contractual disputes.
The most common cases relate to disputes under the terms of the charterparty, but disputes arising under bills of lading or other forms of contracts of carriage approved by the Club are also covered. The Club has an experienced in-house team that helps to manage and advises clients on how to handle each case.
Cover is discretionary and is based on an assessment of the merits of the case. Where possible we will always look to settle on commercial terms but if a case needs to go to mediation, arbitration or litigation then this process is managed by the Club’s team. Shipping disputes are costly and time-consuming and the services of the Club in helping to manage these problems is invaluable to many of our clients.
We can provide a limit of liability up to
USD 5 million
for FD&D cover.
The deductible and policy terms are structured to suit the Charterers individual needs.
EXAMPLE OF FD&D CLAIMS INVOLVING BOTH TIME AND VOYAGE CHARTERS
This matter involves a Charterer (the Assured) attempting to recover a substantial claim for demurrage from his sub-charterer. The FD&D department of the Club is immediately instructed to provide a preliminary advice on how best protect the disponent owner’s position. Local correspondents, experts and US attorneys are also retained to advise and collect evidence in support of the Assured’s claim.Read More »
This case highlights the exposure of a Charterer to an abusive Owner prepared to deviate from the contractual terms and to lien the cargo as security for an unwarranted claim in terms of quantum. It is only through the assistance of the Club’s experienced FD&D department and that of London solicitors retained by the Club in consultation with the Assured that swift steps are taken to obtain an injunction before the London High Court preventing the Owners from discharging the cargo in a port other than that shown on the bill of lading. The cost of solicitors and barristers (retained to lodge the Court application) amounts to USD 85,000 including the costs of supporting full blown arbitration proceedings. The FD&D claims department calculates more than 20 hours of work devoted to this dispute.Read More »
This case deals with the delicate legal English law principle of frustration where sound legal advice from the Club and English solicitors is paramount to avoid unpleasant consequences arising of a potential repudiatory breach for unlawful termination of contract. The advice received by the Assured after the ship is placed out of service for a long period of time allows him to eventually agree on a mutual termination with Owners which would otherwise have been unlikely. The solicitors’ costs amount to USD 10,000 with the Club’s defence department allocating some 8 hours to this case.Read More »
A premature cancellation can place a party in what is called in English law anticipatory breach allowing the other party to claim damages which otherwise would not have arisen. It is not uncommon for a charterer to be tempted to terminate a voyage charter when realising the contracted vessel is unlikely to meet her laycan. This example offers an insight of the type of legal advice that a charterer can expect from the Club and its solicitors under these circumstances which in this case allowed them to conclude a satisfactory settlement. The Club’s defence department invested some 15 hours in the case whilst legal and correspondents’ costs reached USD 42,000.Read More »