The Importance of Chartering Insurance before going out to the water!

by Bluewater Yacht Blue Water Yacht Insurance | Boat Insurance | Sail

What is one of the first things that most charterers organize before they enter the market? It is the same that most ship owners ask from their counterparties before they conclude a fixture i.e. the chartering insurance. But what is it about? As ship owners have a P & I cover so as to indemnify third parties for any liability which may arise from the Ship’s action, a alike cover also exists for charterers.

In contrast to owner’s P & I Club insurance, chartering insurance cover is not mandatory as well as the Charterers may decide to take all the risk themselves. However, there are a number of reasons which make most of the Charters- if not all of them- prefer to be protected with Charters liability insurance cover.

Main Risks covered in the Charters insurance

· Cargo- in case of any cargo damage, cargo shortage or else late delivery, the charters may be liable directly to the cargo owner when they are the carries under the bill of lading or else when an interclub clause has been agreed or else in case where the claim is unsecured as well as it cannot be recovered from the ship owner.

· Pollution- Under certain jurisdictions, the charterers may be considered accountable for oil pollution especially if they are considered as the operators of a vessel. In this case, the charters liability insurance is very imperative in order to place the appropriate security as well as the vessel to resume passage.

· Indemnification of third parties- In Chartering insurance third parties may have claims against charterers from actions which have been arisen due to Charterers negligence. In some of the cases under the charter party, the accountability for the loading or else discharge operations passes from owners to Charterers and therefore the Charterers may be subject to third parties claims.

· Indemnification of ship owners- in case of a breach of the charter party from Charterers, owner’s claims is enclosed. There are number of issues which may arise and the chartering liability insurance comes to cover, a few of which are:

o Bunkers

o Stevedore damage

o Safe port

o Dangerous Cargo

· Damage to vessel’s Hull- The P & I cover offered to the charter owners does not insure the damages to the hull. However, this is imperative for chartering insurance cover due to the numerous ways that a charter may be liable for the damage to vessel’s hull. A dangerous cargo or else any mishandling at the load port from stevedores or the Cargo’s bad stowage may result in such a smash up which is recoverable from charterers.

Bluewater Yacht Insurance insures boats and cruises globally. For over 30 years, they have been insuring boats as well as cruisers all over the world including the Caribbean Sea, Trans-Atlantic passages, Transit through the Panama Canal, Mexico, Canada, Hawaii, Japan and Italy. They also provide quotes and insurance for trips to Cuba.