Hull & Machinery
Hull & Machinery Insurance
Hull & Machinery (H&M) insurance is insurance against physical damage to the vessel. The vessel is insured to its full value, whereby the insurance, depending on the extent of protection chosen, compensates total loss of the vessel, salvage, partial damages to one’s own vessel, collision liability, ice damages, engine-damage, and the vessel’s contribution to general average.
Increased value insurance is a cover against total loss of the insured vessel. A total loss of the vessel can put the Shipowner in a situation, where the hull value insured is insufficient to cover the costs for replacing the lost vessel. The increased value insurance makes it possible for the ship owner to replace the vessel and moderate the economic effects of a total loss. By taking out freight interest insurance the shipping company can safeguard itself against a long-term future loss of income, and in that way get cover for loss of income, which is excluded in the loss of hire insurance. The insured value of each insurance is normally a maximum of 25% of the hull & machinery insurance value.
Loss of Hire Insurance
Through a loss of hire insurance the Shipowner protects the potential loss of income when a casualty occurs and vessel is off-hire. Compensation is subject there is recoverable damage on the H&M insurance but would exempt a total loss situation. The extent of the insurance and the insurance premium are based upon an agreed daily indemnity during a certain period per occasion and year. The daily indemnity should correspond to the ship owners’ actual loss of income if the vessel is off-hire for an extended period of time.
P&I insurance covers the legal liability for damages that ship owners or operators can be exposed to in connection with operating the vessel.
Charterers’ liability cover for time and voyage charterers.
Legal Expenses/Freight, Demurrage and Defence cover for legal costs relating to disputes arising from the ownership, operation, sale, purchase or building of ships.