A person or a company acting as charterer of a ship assumes responsibilities broadly similar to those of an owner. The contracting parties, normally a cargo owner or sub-charterer, will view the charterer as the owner of the ship. The charterer also assumes liabilities towards the vessel owner, including damage inflicted on the ship.
Charterers Liability Insurance can either be arranged through a mutual club (P&I) or in the commercial market and typically insures a charterer against liability for:
- damage to the hull
- damage to cargo
- loss or damage to third party property
A charterer should have in his own right a dedicated cover as opposed to relying on the shipowner’s coverage since that arrange does not offer any protection for liability to the shipowner and his insurer.
There are a number of special extensions to the basic charterers liability wording which can be included as appropriate:
- Trapping and Blocking
- Charterers Bunkers
- Back-to-back sub-charters
- Substitute vessels
All charterers, regardless of position in the “chartering chain”, require cover for both P&I liabilities and damage to hull. As soon there is a binding fixture, whether voyage or time charter, the charterer has a liability exposure.