Please note: This information is a general description. For full conditions, premiums, subjects, and warranties, please contact your team Underwriter.
Builder's Risk Insurance is a policy purchased by shipbuilders and contractors to cover a newbuilding project before the owner takes possession.
It is important for a yard to be able to protect the value of the newbuilding during construction. A Builder's Risk policy covers loss and liability from accidents - from keel laying/steel cutting to delivery - including third-party liabilities.
Pre-launch and post-launch accidents are covered, and a Builder's Risks policy might also cover the cost of rebuilding the vessel/unit if it is regarded as a total loss.
If the owner of a vessel or a mobile offshore unit has contracted a yard to carry out significant repair work and/or conversion work, it is possible that the regular H&M policy will not provide cover due to the enhanced or altered risk. In such cases, the owner needs to arrange for a Builder's Risks cover.
Who can be covered?
- Owners of vessels
- Owners of mobile offshore units
UDS 40 million
To be agreed.
In addition, the insurance can be extended to cover:
- Extra costs of rebuilding. This covers the difference between the amount recovered under the Builder's Risks policy and the actual cost of rebuilding.
- The yard's liability in relation to the buyer for the interest accrued on the instalments paid. This liability could be triggered in the event that there is no longer an obligation to deliver as a result of loss or damage which is recoverable under the Builder's Risks policy.
- The yard's loss of interest and daily penalties incurred due to delay in delivery that is due to damage recoverable under the Builder's Risks policy.
- War Risk Insurance - from the time of the launching of the vessel or waterborne newbuildings.
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