SERVICE AND COMPETENCE YOU CAN RELY ON P&I AND FD&D AND TRADERS CHARTERERS

Transcription

1 SERVICE AND COMPETENCE YOU CAN RELY ON CHARTERERS AND TRADERS P&I AND FD&D

2 CHARTERERS AND TRADERS P&I COVER A charterer is exposed to many of the same risks as a shipowner. As a trader, you may also be exposed to liabilities, except for liabilities related to the cargo. This folder relates to both charterers and traders.

3 2-3 P&I insurance (Protection and Indemnity) protects our members against third party losses and liabilities. P&I is essential for both ship owners, charterers and traders and the cover responds to maritime liabilities incurred in direct connection with the operation or trading of the vessel and will support our members for claims or damages occurring to a third party. Skuld is one of the largest providers of charterers liability cover for time and voyage charterers as well as traders. Our highly experienced in-house claims staff is well prepared to assist charterers and traders in all matters and will offer help whenever needed. Why place a charterers liability cover with Skuld? Charterers and traders will appear in the B/L, C/P and other contracts related to the ship and voyage. Consequently, a charterer or a trader may become involved in legal disputes and end up with legal liability. In this fact sheet, we focus on the most common incidents where a charterer or a trader may be held liable. In each example reference is made to the relevant clause in the Skuld Charterers Terms & Conditions (T&C). Reference should be made to the T&C for the precise scope of cover. DAMAGE TO OR LOSS OF THE VESSEL (Skuld T&C Cl. 5) As a charterer, you may be liable towards the shipowner for damage to or loss of the vessel, equipment and fittings. You may also be liable for demurrage, loss of use or hire including costs reasonably incurred. EXAMPLES: 1. During loading, cargo is dropped into the vessel s hold causing damage to the hull. The owner holds the charterer liable for the damage to the vessel s hull as the charterer has appointed the stevedores. The cover will respond to owner s claim for damage to the vessel s hull. 2. The vessel suffers a main engine breakdown as a result of bad quality bunkers supplied by the charterer. The charterer may be held legally liable for the damage to the vessel s machinery The cover will respond to owner s claim for the consequential repair costs, including loss of time 3. The charterer directs the vessel into a port where there is inadequate draft and the vessel grounds, resulting in damage to the hull. The CLH cover will respond to owner s claim for the consequential dry-docking and repair costs. 4. A trader will at times under the sales contract be liable for loading and discharging cargo, depending on the terms of the sales contract. Title to the goods may pass at the ship s rail and/or manifold. A trader can be held liable as if he was the Charterer of the vessel. If e.g. a liquid cargo is corrosive and escapes from the shore line or manifold, causing damage to the vessel s hull, the trader may be faced with liability towards the ship owner for the damage. CARGO AND EXTRA CARGO HANDLING COSTS (Skuld T&C Cl. 6 and 7) The charterer may be liable for cargo loss, damage, delay or other responsibility arising in relation to the carriage of cargo on the vessel. Particularly, in the dry cargo trade, in C/P s such as Baltime, NYPE etc., the charterer may absorb cargo liabilities according to the contract and the Inter Club Agreement. However, the charterer may also be liable outside the contract for action against him in tort, e.g. due to negligence, strict liability etc. Under a NYPE C/P, the charterer shall perform all cargo handling, including, but not limited to, loading, stowing, lashing, securing, dunnaging, discharging and

4 CHARTERERS AND TRADERS tallying. Most claims due to a breach of any of these tasks will most likely be for the charterer s risk and expense. Skuld will cover these liabilities, plus the extra cargo handling costs. EXTRA BUNKER HANDLING COSTS (Skuld T&C Cl. 8) The charterer may have supplied defective, contaminated bunkers, or the bunkers are outside the ordered specification. After the vessel has bunkered, it is ascertained that the bunkers are off-spec. The costs of removing the off-spec bunkers will be covered. The cost of storage and disposal of the bunkers supplied for charterer s account will also be covered, where such costs are necessary, reasonable and solely incurred as a direct result of such bunkers being defective, contaminated or unfit for use. The value of the damaged bunkers is not covered. PERSONAL INJURY (Skuld T&C Cl. 9) A charterer may also be held liable for injury, illness or even death of a crew member or any other person. EXAMPLES: 1. During a discharge operation for which the charterer is responsible, a steel coil is dropped and a stevedore is killed and two others injured. As a charterer responsible for the discharging operation, you will be responsible for the consequences of the operation. STOWAWAYS (Skuld T&C Cl. 10) A charterer may be involved in a stowaway situation. The C/P normally regulates the liability in such cases under the stowaway clause. In most cases the owner will be responsible for the consequences of stowaways on board the vessel, but the charterer may face the problem as well. A stowaway comes on board the ship in or together with the cargo, for example in an unlocked container. Skuld will cover the charterer s liability to pay additional port and other costs reasonably and necessarily incurred for landing and repatriation of the stowaway. COLLISION AND CONTACT (Skuld T&C Cl. 11) In rare circumstances, the charterer may be found liable for loss of or damage to another vessel, cargo or other property due to a collision or contact with a pier or buoy. The bunkers, which the charterer has supplied to the vessel, are defective. As a consequence of the bad bunkers, the engine stops and while the vessel is drifting, it hits another vessel or a fixed installation. As the charterer is to supply correct fuel to the vessel, he may also be responsible for the consequences of supplying defective fuel. The liability for the collision or contact will be covered by Skuld. POLLUTION (Skuld T&C Cl. 13) In recent years, attempts have been made to hold charterers liable for pollution; for instance, in the U.S. under OPA 1990 and other national regulations that allow for claims against operators or charterers in addition to those against owners. In some cases traders have also been found liable for pollution. EXAMPLES: 1. During the bunkering operation, the hose bursts and causes a spill in the harbour. The charterer is responsible for the supply of bunkers and also for the consequences of accidents and spills during the supply of the bunkers. 2. During the discharge of an oil cargo, the hose bursts due to an incorrectly

5 4-5 closed valve on the shore tank. The incident is caused by a mistake by the receivers, for which the charterer may be held responsible. The clean-up at sea or on land and the delay caused by such incidents will be covered by Skuld. WRECK REMOVAL AND OBSTRUCTION (Skuld T&C Cl. 14) A charterer may be liable for wreck removal, if the vessel is wrecked because of a dangerous cargo or due to an unsafe port incident. When lifting containers over the side by the vessel s own cranes, the vessel lists as the containers are much heavier than declared and the vessel loses stability, after which it eventually sinks. The port requests that the wreck be removed. Since the charterer is responsible for the discharging of the vessel, he is also responsible for the consequences of things going wrong during discharge. OBSTRUCTION (Skuld T&C Cl. 15) The charterer might be liable for the vessel causing an obstruction due to a casualty. In such cases Skuld will cover the charterers liability towards the owners of the harbour, wharves or other vessels. The bunkers supplied by the charterer are defective and the main engine stops. While the vessel is drifting, she grounds in a channel and closes the port. Before the vessel is removed, the port is closed for a week and the loss of income for the port may be claimed against the vessel. Also, the loss of time for other vessels to come in or out of the port may be claimable. As the cause of the incident is due to the deficient bunkers, the charterer will be ultimately responsible. The charterer s liability will be covered under the charterer s P&I cover with Skuld. SALVAGE AND GENERAL AVERAGE (Skuld T&C Cl. 16) In a Salvage and/or General Average situation, the value of the bunkers, together with the shipowner s and cargo interests value, will contribute to the Salvage or General Average costs. The vessel experiences extraordinary severe weather and has to jettison part of the deck cargo. The value of the deck cargo lost will be shared proportionally between the salved values, which consist of the value of the vessel, the remaining cargo and the bunkers. The charterers contribution from the value of the bunkers is recoverable from Skuld. FINES (Skuld T&C Cl. 17) In respect of immigration law and regulations, short delivery or over delivery of cargo, accidental pollution or infringement of customs laws, the charterer and trader may become liable for such fines in certain jurisdictions. After discharging, a paper shortage of cargo is established and customs issues a fine for an incorrect declaration of quantity of cargo to be landed into the country. As the charterer/trader is responsible for the cargo, he will also be responsible for the fine for the cargo shortage. Skuld will cover such fines, and may also cover other fines related to the operation of the vessel, caused by incorrect cargo documents, pollution, smuggling etc.

6 CHARTERERS AND TRADERS FD&D COVER Defence Insurance, also known as FD&D (Freight Defence & Demurrage), provides members with access to Skuld s lawyers and their professional legal advice in non-p&i matters.

7 6-7 Defence Insurance covers costs incurred for necessary legal assistance in charterparty and other disputes directly connected with the operation of the vessel. The insurance is available to charterers and also traders on non-chartered ships. CHARTER PARTIES, AND, PROVIDED, AGREED AT THE TIME THE RELEVANT CONTRACT IS ENTERED INTO, CONTRACTS OF AFFREIGHTMENT (Skuld T&C Clause 22.1) Defence covers disputes arising out of the following: As a charterer you may have a dispute with the shipowner, under a time charter or a voyage charter, which your Defence Insurance can respond to. Typical disputes under time charterparties are disputes relating to the payment of hire, off-hire, termination and withdrawal of a ship etc. Under voyage charterparties, we often deal with disputes in respect of payment of freight or claims for demurrage or detention. CONTRACTS WITH PORT AGENTS, CONTRACTS WITH BROKERS, THE USE OF PORT FACILITIES As a charterer you may from time to time enter into contracts with port agents and brokers. If a dispute arises under such contracts, your Defence Insurance will generally respond. This can also apply to disputes that arise out of your involvement in the use of port facilities. SUPPLIES TO THE VESSEL As a charterer you may order supplies to the vessel, which may lead to disputes that your Defence Insurance can respond to. As a trader, even where you are not the charterer of the vessel, you may have a dispute with the buyer under the sales contract about laytime and demurrage of a ship. Defence Insurance can be extended to respond to such a dispute. Defence disputes can also arise out of the carriage of cargo, the loss, damage or delay to the vessel, general average and damage to property, unless the dispute is or can be covered under the standard P&I insurance. We also work closely with our members and clients and deliver proactive assistance in reviewing relevant clauses in charterparties and contracts to minimise the risk of disputes. Our Skuld Defence team is made up of professional lawyers representing over 16 different jurisdictions with extensive experience in handling disputes worldwide.

8 ASSURANCEFORENINGEN SKULD (GJENSIDIG) Råadhusgaten 27, 0158 Oslo, Norway SKULD.COM Post address: P.O. Box 1376 Vika, 0114 Oslo, Norway 24 HOUR EMERGENCY NUMBER