Liability (P&I) Insurance
Cover under the Liability Class breaks down into three main areas.
Liability for loss of/damage to the Chartered vessel (Damage to Hull, DTH), Liability for loss of/damage to the Cargo being carried (Cargo) and other general liability risks associated with the operation of the ship and carriage of cargo (P&I).
DAMAGE TO HULL
Liability for loss of/damage to the Chartered vessel
A DTH (Damage to Hull) claim might arise as a result of the Charterer sending the vessel to an unsafe port or berth, or as a result of damage caused by stevedores during cargo handling operations. DTH claims can also result from damage caused by the cargo itself, for example a stowage breakdown or a cargo fire. Where a Charterer is responsible for a DTH claim then he will normally also be liable for the time lost repairing any damage. There is also a risk of the Charterer being liable for engine damage as a result of supplying off-spec bunkers.
Liability for loss of/damage to the Cargo being carried
Cargo claims typically arise under a bill of lading or similar contract of carriage, or by way of indemnity to a vessel owner under the terms of a charterparty.
Other general liability risks associated with the operation of the ship and carriage of cargo (P&I)
P&I covers the Charterer against any claims that might arise from risks such as death and personal injury, fines or penalties, pollution, wreck removal or stowaways to cover just a few of the ways that a Charterer can find themselves legally liable under a charterparty or bill of lading.
We can provide a limit of liability up to
USD 500 million
for Liability cover.
The deductible and policy terms are structured to suit the Charterers individual needs.
EXAMPLES OF LIABILITY (P&I) CLAIMS
This case illustrates Charterer's exposure to an (implied) indemnity claim by Owners who are able to prove a loss as a result of complying with Charterer's orders. Equally it highlights the need to combat indemnity claims where there is merit to do so. This example explains how an Assured is able to rely on the Club and its external legal advisors to assess the need compromise on a shortage claim on the one hand and fight a personal injury claim on the other. Legal costs exceed USD 30,000 including indemnity costs received from Owners. The Claims Department invests some 20 hours in handling this claim.Read More »
There is often the perception that a very limited third party liability risk is attached to a voyage charterer. Whilst to some extent this is accurate, the reality is that the exposure could be substantial in the event of a claim typically for breach of a safe berth/port warranty or, as described in this example, for serious damage caused to the vessel by the stevedores or their equipment. In this case the Club is forced to put up security in respect of a substantial indemnity claim presented by Owners for damage to the ship caused by barges hired by the Assured in the cargo discharge process.Read More »
This claim example illustrates the exposure of a time charterer to cargo claims in the first instance when trading with bills of lading on its own form as carriers. With the valuable assistance of Club correspondents and local surveyors, the Club is able to establish that the nature of the damage is salt water ingress through the hatch covers. Whilst the Club is forced to settle numerous cargo claims at the port of destination, the threat of a recourse action from Owners pursuant to the terms of the Inter Club Agreement allows the Assured to enter into a good settlement that includes a contribution to costs. The Club incurs USD 80,000 in legal and expert fees and computes some 35 hours of management time.Read More »
The quality of bunkers stemmed by the vessel has always been a major concern to Charterers who are commonly required by contract to supply bunkers of a certain specification. This example highlights the exposure that a Charterer has to very significant claims for damage to engine caused by the use of off-spec bunkers which will include any detention time for repairs. A swift and coordinated team response lead by the claims department is considered critical when handling this type of casualties. In this case the immediate attendance of qualified experts and lawyers has been key to the Assured achieving a sensible settlement.Read More »