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Charterer’s Liability Insurance

Charterers' Liability Insurance Policy

Charterers' Liability Insurance Policy

Legal Protection and Defense for Chartered Vessel Operations

Settling Your Claim

"Settling Your Claim" in maritime insurance involves a defined process for resolving and compensating claims:

  • Policy Deductible: Initially, the claim is subject to the policy's deductible, which the policyholder pays before insurance coverage applies.

  • Claims Staff Evaluation: Experienced claims staff assess the claim, focusing on legal liabilities and costs.

  • Prompt Indemnification: The insurer aims to quickly compensate the policyholder, up to the agreed policy limit for legal liabilities and costs.

  • Coverage Limits: Compensation is provided up to the predetermined limit set in the policy for legal liabilities and associated costs.

  • Support Throughout the Process: The insurer offers guidance and support in handling documentation, legal procedures, and maritime law complexities.


The statement "Important" emphasizes the need to understand the full scope of an insurance policy:

  • Summary vs. Complete Policy: While the provided information outlines the coverage, the complete policy document contains detailed terms, including all limitations, exclusions, and conditions.

  • Reviewing Full Policy Details: It's crucial for policyholders to thoroughly review the full policy to understand the exact coverage scope, limitations, and their obligations.

  • Legal Contract: The full policy is a legal contract, and understanding its contents is essential to avoid misunderstandings regarding coverage.

  • Seeking Clarification: Policyholders should seek advice or clarification for any uncertainties, particularly in complex policies.

Charterer's Liability Insurance Coverage

Charterer’s Liability Insurance is vital for managing risks in vessel chartering. It covers:

  • Legal Liabilities: Protects against legal claims due to incidents during the charter, like damages or injuries caused by the vessel.

  • Operational Risks: Mitigates financial losses from unexpected events, such as cargo damage or environmental incidents.

  • Contractual Breaches: Covers penalties and losses from failing to meet charter party agreements.

  • Customizable Coverage: Policies can be tailored to specific risks associated with various types of charters.

  • Claims Support: Provides expert assistance in handling complex maritime claims.

Limit of Liability

The "Limit of Liability" in Charterers' Liability Insurance is crucial for covering the full value of the chartered vessel and potential legal fees. Key considerations include:

  • Matching the Vessel's Value: The limit should at least equal the vessel's full value to cover total loss scenarios.

  • Legal Fees and Costs: It should account for potential high legal expenses, especially in complex maritime litigation.

  • Risk Assessment: Factors like vessel age, condition, operational area, and cargo type influence the required coverage level.

  • Industry Standards: Adhering to guidelines like CL345E and CL345NE helps in aligning with standard practices.

Principal Risks Excluded

This section details key aspects of Charterer's Liability Insurance:

  • Coverage: Includes general average and salvage charges related to the charterer's freight.

  • Exclusions: Does not cover costs from delay, detention, or loss of use of the vessel or cargo.

  • Exceptions: Covers liabilities from accidents involving the chartered vessel, demurrage payments under the charter party, and costs directly related to the vessel.

In essence, the policy focuses on specific liabilities while excluding broader delay or detention expenses, with certain exceptions.

Risks Covered

Cover is to indemnify you for losses, costs and expenses you may incur as charterers in respect of liabilities to third parties or to the owners of the chartered vessel.

For vessels not entered in a P & I club for charterers’ risks these liabilities may include damage to the chartered vessel


  • Damage to third party property

  • Damage to cargo

  • Pollution-

  • Personal injury

  • Demurrage - when arising out of damage for which the charterer is liable.​

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