Additional Cover

Additional Cover

Damage to Hull

If the ship is physically damaged for any reason relating to the owners, their H&M underwriters would generally cover the costs.  But if the cargo is to blame for the damage or, for example, the port or berth was unsafe, then charterers could face significant claims from owners.  Damage to Hull (DTH) is designed for charterers and traders to cover:

  • Unsafe port or berth claims which can be to the full value of the ship
  • Hull damage caused by contracted stevedores
  • Hull damage caused by dangerous cargoes
  • Hull damage caused by poor cargo stowage  
  • Damage to main or auxiliary engines caused by charterers’ bunkers
  • Time lost repairing any damage detailed above
  • Fees for all of the above and defending claims

Bunker quality is an additional risk for a time charterer contracted to supply bunkers for a vessel.  This is due to the possibility of poor quality or contaminated bunkers damaging the main and auxiliary engines/generators of the ship. Cover can be provided for the resulting costs and expenses incurred in repairing or replacing machinery and components damaged by ‘off spec’ bunkers and the cost of removing those bunkers.

Charterers’ Bunkers

A charterer that puts his own bunkers on board a ship risks the loss of, or damage to, the bunkers in the event of an incident during loading of the bunker fuel, theft or a maritime accident such as, fire, explosion or collision.  The value of bunkers, particularly large tankers and bulk carriers, can be considerable.  Charterers’ bunkers cover is an optional cover for the risks relating to loss of or damage to bunkers whilst on a chartered ship.

Traders' Cargo Liability Cover

There may be occasions when a charterer or trader is the legal owner of a cargo on board a ship, even for a short time.  The trader will have their own cargo insurance, but this only responds to loss of or damage to the cargo itself and would not respond to liabilities or losses caused by the cargo itself.  For example, where a cargo pollutes or damages third party property through no apparent fault of the ship.  The injured party – possibly a government body or authority – could bring claims directly against the cargo owner.  North’s Cargo Liability Cover (also known as “Cargo Owners Legal Cover” and “Cargo Legal Liability Cover”)  covers the liabilities a cargo owner might face during shipment.  Cover is generally available up to a limit of US$50m.

Freight at Risk

If payment terms require all or part of the freight to be paid either after the vessel has left the load port or on delivery of the goods and the vessel is lost on route or does not arrive at the discharge port, the freight may never be paid.  'Freight at Risk Insurance' provides cover for this risk. 

Extended Contractual Liability

At times and for commercial reasons, charterers enter into contracts which take them outside of standard cover, such examples include: 

  • Contracts that impose strict liability or liability irrespective of fault
  • Naming and waiving provisions
  • Liability beyond ocean carriage such as through transport
  • Contracts or indemnities with onerous terms
  • Specialist operations

Where such contractual agreements are anticipated, underwriters should be advised and arrangements can be made to extend cover to include the additional risks.  In such circumstances these covers may attract an additional premium.

Freight, Demurrage and Defence Insurance (FD&D)

Often referred to as FD&D or Defence cover, this protects charterers’ and traders’ interests and supports them to recover any proper claims for uninsured losses and/or in defending and resisting any actions improperly brought against them.  With few exceptions, North FD&D Cover does not have any limit of liability, but as with all defence insurers, FD&D Cover is discretionary.  

We provide cover for legal disputes directly under the slot, voyage or time charterparty; but not disputes arising under a sale contract or relating to general commercial trading issues.  

Our standard FD&D deductible is 25% min $10,000 and max $150,000 each claim (or equivalent policy currency).  Please also visit the FD&D section of our website for more information: