Shipbuilder’s Risk Insurance
Comprehensive Insurance for Shipbuilding: Safeguarding Against Maritime Construction Risks
In the intricate world of maritime construction, shipbuilders face a myriad of risks ranging from damage to under-construction vessels to legal liabilities for third-party injuries or property damage.
The policy covers loss or damage to hull and machinery of vessels under construction, including materials, and legal liabilities for property damage or injuries to third parties, utilizing the Institute Clauses for Builders’ Risks.
Insurance includes protection against all risks of loss or damage during construction, including latent defects and expenses incurred in failed launches, along with cover for damage due to faulty design (excluding repair costs for the faulty parts).
Exclusions in Coverage
Excluded are damages from earthquakes and volcanic eruptions, costs of renewing faulty welds, and liabilities arising from workers’ compensation, punitive damages, and pollution or contamination.
Premiums are based on the estimated contract value, vessel type, construction period, yard's claims history, deductible level, and specifics of launching, trialling, and delivery, adjusted post-policy based on final values and actual construction periods.
Claims Settlement Process
Experienced claims staff promptly indemnify for covered losses, legal liabilities, and costs, subject to the policy deductible and up to the agreed limit, ensuring effective claim resolution.
Policy Details and Importance
This summary outlines the coverage; full policy details, including limitations, exclusions, and conditions, are crucial for shipbuilders to review for a comprehensive understanding of their coverage and responsibilities.