LOSS OF HIRE

RISK SOLUTIONS COVERING LOSS OF INCOME FOLLOWING PHYSICAL DAMAGE TO A VESSEL

1 IN A WORLD OF INCREASING COMPLEXITY, GARD’S OBJECTIVE IS TO HELP OUR MEMBERS AND CLIENTS MANAGE THE TOTALITY OF THEIR EXPOSURES – BOTH TO EXISTING AND DEVELOPING RISKS.

2 PROVIDING THE WIDEST RANGE OF RISK SOLUTIONS

As a multi-line insurer – with the The loss of hire cover responds strongest rating in the marine to a shipowner’s loss of income market – Gard is uniquely positioned following physical damage to a to understand how risks fit together, vessel. It includes protection against and identify the best choice of stranding, physical obstruction of the products, ensuring seamless vessel and the removal of damaged coverage and service. cargo, offering comprehensive support for shipowners. Innovation has always been a cornerstone of Gard’s business model and, over the years, we have Further information can be found on refined and extended our standard our webpage (www.gard.no) under Dedicated duty products and introduced a range “Covering risks”, or from your usual phones in all offices of additional products, responding contact. to special needs and requirements from different parts of the marine 24/7 industry.

3 SCOPE OF COVER

Loss of income due to Loss of income caused by events Important exclusions such as • Actual and constructive total loss. REMOVAL • Damage to the vessel • Non-physical blocking of a vessel OF DAMAGED recoverable from the underlying (e.g. by order from authorities). CARGO hull & machinery cover. • Stranding of the vessel. The cover can be extended to • Physical obstruction preventing respond to loss of hire as a result the vessel from leaving port of war or war like circumstances, (excluding ice). and for non-physical blockage due • Salvage or removal of damaged to intervention by a state power. cargo. Detention due to piracy is not • Events giving rise to an allowance covered under this policy, however, in General Average. Gard has a specific product for these risks.

4 THE LOSS OF HIRE COVER PROTECTS THE SHIPOWNER FROM A DAILY LOSS OF INCOME ARISING FROM PHYSICAL DAMAGE TO THE VESSEL IN A WIDE RANGE OF SITUATIONS.

Limit and deductible Gard claims handling and adjusting Can be extended to include • Limits of cover are offered based • Gard’s Marine Claims team on the number of indemnity days consists of some 40 members WAR LIKE multiplied by the daily earnings and has decades of experience CIRCUMSTANCES as stipulated in the policy. in Loss of Hire claims handling • Standard minimum deductible of and adjusting, always with a focus 14 days. on finding practical solutions to limiting the loss. By doing Who can be covered? this we are also protecting the • All parties with an insurable assured’s reputation, minimising interest in the vessel’s income, business disruption, protecting who would be financially loss records and reducing prejudiced by the vessel being overall insurance costs. The out of operation. expertise available within the team includes Master Marines, ex. Pilots, ex. Chief Engineers, ex. Superintendents, Naval Architects, ex. Class Surveyors, Average Adjusters and Lawyers.

5 CASE STUDIES

Loss of income due to Loss of income due to damage place the vessel off hire. A vessel to hull put off hire by charterers on account HULL As a chartered dry bulk carrier of a damage is generally regarded DAMAGE approached its discharging port as ‘deprived of income’ as a result in South America, it ran aground of that damage, which is the trigger and the hull was damaged. A few of compensation under a Loss of days later, the vessel was released Hire policy. with the assistance of a tug, but the damage was too severe to continue In this case, the vessel was off-hire the voyage. As the vessel was unable for 30 days and with a standard to operate, the charterer put it deductible of 14 days, the insured off-hire. The vessel was later towed was entitled to compensation for to a yard where it spent 12 days 16 days, based on the agreed daily undergoing repairs. It was off-hire earnings as per the Loss of Hire for a total of 30 days, including time policy. lost obtaining tenders for repair, conducting surveys and resuming the voyage.

The Gard solution The provisions of the charterparty in force at the time the vessel was unable to operate determines whether or not the Charterer may

6 Hire of portable equipment Delay due to damaged cargo damage shall be converted into a A fire in the compressor room of a equipment corresponding period of total loss of cement carrier severely damaged A bulk carrier was chartered on a income. E.g., if a vessel traded with cargo compressors and electrical time charterparty with a daily hire 50% reduction of hire for a period equipment. The compressors were of USD 30,000. The shipowner of 50 days due to a damaged crane, taken to a workshop and due to a took out loss of hire insurance for this will be converted to a period of long wait for spare parts, repairs the corresponding amount. While 25 days full off hire. With a standard were estimated to take two to three loading at a port in Denmark, the deductible of 14 days, the insured months. The owners decided to hire electro-hydraulic motor grabs on would be entitled to compensation portable compressors to continue one of the onboard cranes broke for 9 days, based on the agreed trading and forwarded loss of hire down. Subsequently, the loading daily earnings as per the Loss of Hire underwriters a claim for expenses and discharging capacity of the policy. related to their hire and installation. vessel was reduced, impacting daily hire. The Gard solution This claim resulted in a minor The Gard solution allowance for the cost of repairs. Delay due to damaged cargo The loss of hire insurer additionally equipment is not uncommon. Any covered a proportion of the hire breakdown of cranes, cargo pumps expenses, but was not liable for or similar equipment prevents the more money than was saved by the vessel from keeping to its schedule decision to hire portable equipment and may result in a reduction in rather placing the vessel off-hire. charter hire. As per the Nordic Marine Insurance Plan, any period the vessel is trading with reduced hire as a consequence of such

7 THE GARD GROUP

Lingard Limited Gard AS Gard (Japan) K.K. Gard (North America) Inc Trott & Duncan Building Dronning Eufemias gt 6 Kawade Building, 5F 30 Broad Street 17A Brunswick Street NO-0191 Oslo 1-5-8 Nishi-Shinbashi New York Hamilton HM 10 PO Box 1271 Vika Minato-ku NY 10004-2944 Bermuda NO-0111 Oslo Tokyo 105-0003 USA PO Box HM 3038 Norway Japan Hamilton HM NX Tel: +1 212 425 5100 Bermuda Tel: +47 37 01 91 00 Tel: +81 3 3503 9291 Email: [email protected] Email: [email protected] Email: [email protected] Tel: +1 441 292 6766 Gard Marine & Energy- Escritório Email: [email protected] Oy Gard (Baltic) Ab Gard (Japan) K.K. de Representação no Brasil Ltda Bulevardi 46 Vogue 406, Rua Lauro Muller 116 – suite 2402 Gard AS FIN-00120 Helsinki 3-9-36 Higashimura, Imabari-city, Botafogo, 22290-160, Kittelsbuktveien 31 Finland Ehime 799-1506 Rio de Janeiro, RJ, NO-4836 Arendal Japan Brazil PO Box 789 Stoa Tel: +358 30 600 3400 NO-4809 Arendal Email: [email protected] Tel: +81 898 35 3901 Tel +55 (21) 3037 9764 Norway Email: [email protected] Email [email protected] Gard (Greece) Ltd Tel: +47 37 01 91 00 2, A. Papanastassiou Avenue Gard (Singapore) Pte. Ltd. Email: [email protected] 185 34 Kastella 72 Anson Rd Piraeus #13-02 Anson House Gard AS Greece Singapore 079911 Skipsbyggerhallen Singapore Solheimsgaten 11 Tel: +30 210 413 8752 NO-5058 Bergen Email: [email protected] Tel: +65 3109 1800 Norway Email: [email protected] Gard (HK) Limited Tel: +47 37 01 91 00 Room 3003, 30/F Gard (UK) Limited Email: [email protected] The Centrium 7 Bishopsgate 60 Wyndham Street London EC2N 3AR Covering the globe Central United Kingdom and all major time zones Hong Kong Tel: +44 20 7444 7200 Tel: +852 2901 8688 Email: [email protected] Email: [email protected] 13 OFFICES 8 PROVIDING A WORLD CLASS SERVICE

A large claims organisation with industry experts 200+ CLAIMS HANDLERS

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