Loss of Hire
Please note: The information is a general description. For full conditions, premiums, subjects, and warranties, please contact your team Underwriter.
Loss of Hire Products
Shipowners and charterers are exposed to a complex trading environment. Sometimes one or several parameters that affect an owner’s trade contribute to a disruption in the individual vessel’s trade. Whilst in an ideal situation, the owner will proactively foresee and avoid incidents that have a negative impact on trade, in some cases, this is not possible.
An important consequence of the vessel being unable to trade is that it is bringing in no revenue from hire. In times of tight margins and when cash flow is vital to the owners, such an unexpected shortfall of hire could prove devastating.
The Swedish Club’s Loss of Hire products offers the opportunity for owners and charterers to bridge the gap between a disruption in the vessel’s operations and the resulting financial impact following a traditional Hull and Machinery event and other situations.
Loss of Hire Insurance
The Swedish Club’s Loss of Hire insurance is mostly offered on the Loss of Hire conditions contained in chapter 16 of the Nordic Marine Insurance Plan. Still, we can also tailor our Loss of Hire insurance to fit our member’s Hull & Machinery cover.
Loss of Hire insurance is a loss of earnings insurance, which comes into place when a vessel has sustained damage which is covered under the relevant Hull and Machinery (H&M) policy.
Loss of Hire Insurance is based on days (or part of days) when the vessel is off-hire due to a claim recoverable under H&M insurance. When the period exceeds and agreed number of deductible days – commonly 14 days – the assured has a valid claim under the policy.
There is also a set upper limit per claim, specifying the number of days the assured is paid under the insurance (normally 60, 90, or 180 days). There is also an overall limit per policy year.
Should a vessel exceed the set number of days per year at an early stage in the life of the cover, there is a possibility for the assured to reinstate the cover by purchasing new cover for the remaining period of the policy year.
Who can be covered?
Loss of Hire Insurance. USD 40 million.
To be agreed.