Protecting Charterers Through Marine Insurance

Every country, even landlocked ones, relies on shipping. It is the means by which most goods and commodities are transferred around the world. Without it, the modern world would look very different indeed. However, the sea is not as predictable nor as easy to work in as land and accidents happen frequently. In order to provide some form of protection to shippers, different kinds of marine insurance are available for both shipowners and charterers.


Keeping safety in the sea

In order to mitigate the effects of uncertainties of the sea, marine insurance was developed to protect businesses from loss or damage to cargo and injuries and loss of life due to accidents. Marine insurance is the oldest form of developed insurance, dating back from the 15th century.

The maritime industry is a high-risk and litigious one. And even with the best and most careful operations, the possibility of unfortunate events can only be managed and minimised through choosing the marine insurance that is best for your business’ needs.

Different kinds of insurance have been developed to cater to different business needs. Charterer’s liability insurance is now available, giving some buffer against the financial turbulence to be found in the shipping industry.


Benefits of Protection and Indemnity Insurance (P&I)

P&I insurance is marine liability insurance that practically covers all liability risks associated with the vessel operation. Each P&I insurance policy has specific terms and conditions which is based on the nature of the risks and the amount of insurance that the insured desires. However, since this is indemnity insurance, the insurer will only pay once the insured must pay for a claim against them.

Included in the P&I Insurance are risks in pollution, cargo, personal injury, and damage to hull.


What is Damage to Hull (DTH)?

Charterers face the risks of physical damage of the vessel, time, and financial loss in repair. Damage to Hull provides coverage for liabilities on operations and disasters such as:

  • Damage by cargo – charterers are responsible for the cargo, and claims against them can be made for ship damage caused by cargo.
  • Safe Port or Berth – This pertains to the warranty on ordering the ship to call at safe ports. Failure to provide a safe port will be in breach of this warranty.
  • Bunkers – Even though the ship’s machinery is not damaged, charterers can still be liable for off-specification bunkers. The insurance may cover the costs of removing and replacing the bunkers, as well as cleaning tanks and engines.
  • Operations – The transfer of cargo Claims on operational damage can be presented against the charterer. This includes damage that was acquired during ship to ship transfer and lighterage.


No one can predict the kind of risks that may actually happen during shipping, and charterer’s liability insurance is the best way to be prepared and think ahead in order to avoid losing assets. 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 respond to their businesses’ needs. Contact us today for high-quality maritime insurance products and consultancy services.

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