Life Hacks





(Structure may be made up of Steel/wood/Fibre etc. or in combination)

Sum Insured = No separate sum Insured for Hull and Machinery

(one single S.I. for both)

HULL insurance Detariffed on : 01.04.2005.

Subject matter under Hull insurance:

1. Hull and Machinery

2. Freight at Risk

3. Disbursement and increased value

4. Premium reducing

5. Return of Premium

6. Builders Risk

7. Repairers Risk

8. Charters Liability

9. War and Strike Risk

10. Loss of Hire

11. Loss of Profit


No separate sum Insured for Hull and Machinery

(one single S.I. for both)


Types of Freight: 1. Prepaid Freight

2. Freight payable(Lost or not Lost)

3. Freight payable on delivery

4. Lumpsum Freight

5. Time Chartered hire.

Freight : It is the remuneration payable to the ship owner for the engagement

of his ship for carriage of goods.


Disbursement : It is an expenses incurred for fitting out and provisioning

of Ship and other items.

Sum Insured shall not exceed 25% of the S.I. on H&M Value

provided no freight insurance are placed

Condition : Total Loss (Actual & constructive Total Loss) + Excess Liability

for collision, General Average, Salvage, Salvage Charges, Sue &

Labour Charges

Excess Liability: Collision liability = Rs.60,00,000

3/4th collision Liab.= Rs.45,00,000

Insured Value = Rs.30,00,000


Excess liability = Rs. 15,00,000


This amount an be covered under excess liab. policy


Since the cost of insurance on Hull is considerable, it is permitted to issue

Premium reducing Policy.

This means that the Indemnity is reduced every month by 1/12th .

Condition : On Total Loss only


COVER : From the time by laying the keel until the time of delivery

Including trail trip run to the buyer

Condition : Institute clause for Builders Risk and other approved clauses.

Rate : determined on the basis of

1. class 2. completed value/contract value 3. Period involved.

This rate has 2 component

1. Flat rate for completed/contract value+ trail

2. a rate per month for whole period.


Ship repairers liability may arise out of use of Oxy acetylene or welding torch

accidently come into contact with Oil waste or near fuel lines are major source of

Fire Loss.


COVERS: 1. Loss or Damage to vessel during the period of Charter

2. Demurrage (Due to delay to carry out repair)


This risk Indian Govt. Scheme and is administered by G.I.C. from 2005

Coverage : H & M, Freight, Disbursement/increased value and Premium reducing.

Exclusion : 1. Loss of Hire 2. Loss of profit.


Loss of Hire occurs mainly due to laid up of vessel for repairs (accidental)

Condition : Repair should commence within 12 months of cover.


This is the Charterers Loss of profit over the period of charter following

a total Loss. There are two types of charter 1. Time charter 2. Voyage charter.


(persons have insurable interest)

1. Ship Owners

2. Charterers

3. Ship builders

4. Ship breakers

5. Repairers

6. Bankers

7. Financiers

Types of vessels covered under HULL POLICY

1. All types of ocean going vessels

2. All types of coastal/inland vessels

3. Fishing vessels/Trawlers

4. Sailing vessels

5. Jetties, whares etc.

6. Dredges

7. Yard & Pleasure craft

8. Port crafts


Clause – 6.1 of I.T.C Hull – 01.10.1983(need no diligence)


1. Perils of the seas, Rivers, Lakes or other navigable waters

2. Fire/Explosion

3. Violent theft outside the vessel

4. Jettison

5. Piracy

6. Breakdown or Accident to Nuclear installation or Reactors.

7. Contact with Air craft or dropping of Similar Objects there from,

Land conveyance, Dock, Harbour equipments or installations

8. Earthquake, valconic eruption or lightening

Clause – 6.2 of I.T.C Hull – 01.10.1983(due diligence)


1. Accident in Loading or discharging or shifting of cargo or Fuel

2. Bursting of Boilers, Breakdown of Shafts or any latent defects.

in the Machinery or Hull.

3. Negligence of the Master, Officers, Crew or Pilots.

4. Negligence of the Repairer or Charterers provided they are not the Assured.

5. Barratry of Master or Crew.

Barratry : is a wrongful act of of Master and Crew


1. Scuttling

2. Run the vessel to the shore

3. Setting the vessel on Fire.

Other Perils:

1. Pollution Hazard: It is covered

If the vessel is damaged by the deliberate action of the Govt.

Authority to mitigate or prevent the pollution provided such

Pollution has not resulted for want of diligence from the Owner/Manager.

2. 3/4th Collision Liability

1. Loss or Damage to any other vessel or property on any other vessel.

2. Delay to or Loss of use of any such other vessel or property theron

3. General average of , salvage of, or salvage under contract of , any

such other veseel or property thereon.

Subject to:

1. Both vessels are in Blame unless liability of one or both vessels become

limited by Law, the Indemnity is decided on the principle of Cross Liability.

Each vessel will pay each others liability. i.e. Vessel “A” will pay the

Liability of “B” and the Vessel “B” will pay the liability of “A”.

2. Total Liability of the Underwriters will be limited/restricted to

3/4th of the Insured value for the Vessel inrespect of any one collision.

3. Similarly Legal cost also limited to 3/4th.


1. Removal or disposal of obstructions, wrecks, cargoes or any other things.

2. Any real or personal property or thing whatsoever except other

vessel or property on other vessel.

3. The Cargo or other property on or the engagement of to insured vessel

4. Loss of Life, personal injury or illness

5. Pollution or contamination of any real or personal property or thing

whatsoever except other vessels.

Protection and indemnity Club:

Hull insurance provides cover only upto 3/4th of the collision

Liability Subject to insured Value. Remaining 1/4th of the liability is

borne by the ship owner. This 1/4th liability is covered by P&I

club which is a association of ship owners for mutual benefit. This

club is managed by a Board of directors. Club secretary/Managers

are appointed to look after the day to day affairs of the club.

Fund is collected from members as premium. Each member will pay initial

Premium depending upon the tonnage of the vessel. Further premium

Called “calls” are collected to meet the liabilities and expenses. It is a non

Profit making organization.

3 Types of Liabilities undertaken by the club for their members:

1. Statutory Obligation: Obligations and responsibilities towards of the

Master, Officers and crew.

2. Contractual Liability: Responsibilities in relation to the issue of Bill

of lading whereby the member may become

liable to cargo owners.

3. Third Party Liability: Loss of Life, personal injury to members of the

crew, passengers, Dock workers & others on

board or near the entered ship.

1/4th Liability is covered by the club for the following expenses:

1. Removal of wreck expenses

2. Damage to Harbour, wharves, piers, bridges, locks, buoys,

beacons & other property.

3. Pollution


1. Wilful misconduct of the Assured and Malicious act.

2. War weapons & Nuclear perils both fission and fusion

3. Radio active contamination, chemical, biochemical, biological

Electro magnetic weapons.

4. Financial default & insolvancy(Owner, Officers & charterers)

5. War civil War


7. Terrorism or any person acting with political motive.


· Type of vessel

· Age

· Construction

· Tonnage

· Flag of convenience

· Name of the Builder & Place

· Dimensions (L,B, depth & draft or draught (distance between water line and bottom of the ship)

· Twin screws

· Double bottom

· Single or double engines

· Management

· year of make

· Method of Propulsion

· Particulars of Engine/Machinery(Main, aux. &



· Fuel Tank capacity

· classified

· registered

· surveyed

· No of propellers

· No of cylinders

· Trade

· Nature of cargo

· Singeleton (only ship owned by owner)

· claim experience for the past 5 years

· Policy – time or voyage

· conditions of insurance and size of deductibles

· Trading warranty and navigational limits

· Whether repaired or major repair done

· Previous insurance history

· No of crew and Officers separately & qualification

of Master


· Chartered or not

· P & I covered or not

· Prevailing repair cost

Physical and Moral Hazard

When the physical and Moral hazard is adverse the following measures to be taken:

1. A Pre inspection survey

2. Impose warranty

3. Limit the scope of cover

4. Impose addl. Excess

5. Loading of premium

Declined Risks:

· Older country craft

· Vessel over 20 years

· Towage risk of wooden vessel

· Ship breaking risk

· Small boats

· Yatch

· Financial default & poor claim experience

· Risks declined by other insurers based on poor MoralHazard

· Non conventional risk or specialized vessels

· Certain vessels accepted on limited or restricted terms and conditions


· Type of vessel

· Management and ownership

· Past claim experience

· Valuation – current market value

· Classed

· Repair cost

· Type of cover required(whether full condition or limited)

· Size of deductible

· U/W experience of the similar risk

Hull initial rating:

Hull rating divided into 2 parts

1. Total Loss element = Market value x %

2. Average Loss element(ex total Loss element) determined

on the basis Size of Ship

Say for ex: Rs.30 X DWT/GT/BHP

Add both rates = 1 & 2 say = “R”

Slip Rate = “R” X 100


Insured value


It is imposed to limit the liability of the Insurers

To make the insured to be due diligence

Deductibles are not applied to Hull Policy under the following cases:

1. Actual and cconstructive total Losses

2. Expenses incurred to see the bottom of the vessel for the

extent of damages


Premium involved under the Hull Policy is considerable so installment

Facility is allowed. They are 4 instalments.

First instalment is paid before commencement of the Risk

Other 3 installments are collected before the commencement of the

Quarter on specified Dates.


I.M.B = International Maritime Bureau 1980


These two agencies are involved in the investigation of Maritime frauds

CARGO : Wilful Misconduct

Malicious ACT



HULL : Scuttling of Ship

Documentary Fraud

Cargo Thefts

Frauds in connection with Charterers.

Steps to be taken in case casuality likely to give raise to a claim

1. Notice of Loss

2. Brief details of occurrence

3. Arrange survey based on estimate submitted by the Assured

4. Inform Police for theft claim

5. Fire brigade for fire claims

6. Appoint Adjusters in case of overseas vessel

7. Take all reasonable steps to minimize the Loss

Essential Documents In Marine Hull claims:

1. Certified copy of N.O.P

2. M.M.D(Mercantile marine Dept.)

3. Insured report for occurrence

4. Survey report

5. Weather report from Metrological Dept. for weather condition

6. Original repair Bills, Invoice and cash Memo

7. affidavit filed by rescue vessel

8. Certificate of survey for Inland vessels

9. Registration certificate

10. Free Board Certificate

11. Load Line certificate

12. Status/copies of Mandatory certificate

13. Notarized certificate of master and chief Engineer of the vessel

14. Log book extracts(engine & deck)

15. Crew List with details of Competent Authority

16. Copy of claim Bill with supporting Document

17. Bill of Lading

18. Country of orgin

19. Port clearance certificate

20. Insurance policy

21. Specifications and tender

22. Cargo manifest

23. Marine casulity Form for death and P.A

24. Police report for SRCC calim


1. Navigation

2. Continuation

3. Breach of warranty

4. Termination

5. Assignment

6. Perils

7. pollution

8. 3/4th collision liability

9. sistership clause

10. Notice of claim and tenders

11. G.A & Salvage

12. Deductibles

13. Duty of Assured

14. new for old

15. Bottom treatment

16. Wages and maintainance

17. agency com,mission

18. unrepaired damages

19. C.T.L

20. Freight waiver

21. Disbursement warranty

22. Return for Lay up and cancellation

23. War exclusion

24. strike exclusion

25. MD exclusion

26. Nuclear exclusion

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