Charterers exposures - 14th July 2011

Charterers can face significant liabilities to cargo interests, other third-parties and the shipowner. They can be either contractual (eg breach of the charterparty) or non-contractual (eg pollution).

A new section is now on our website to emphasise the liability exposure faced by charterers and to provide guidance on dealing with those risks through specialist cover, loss prevention and other guidance.

The UK P&I Club charterers' cover includes both those risks which are covered by conventional P&I insurance, and additional risks which are specific to charterers. It provides high levels of cover to react to both operational and catastrophe liabilities.

A review of the key charterers risks has been written by our legal director, Dr Chao Wu. Her article assesses the risks in three main areas - charterer's direct liability to third parties, indemnification of owners and damage to hull.

Our new section on charterers liabilities also seeks to break down the risks and cover into sections that aid understanding. A separate web page addresses the main liabilities as well as grouping the additional covers needed to tailor cover to the variety of operations undertaken by different types of charterer.

This section will continue to develop to include selected loss prevention and other advice that relates directly to charterers needs and exposures.