Charterer's Liability

The “charterer’s liability insurance” is a type of marine insurance. Most ships are chartered either on a time charter or voyage charter contract. In both cases the charterer assumes liabilities towards the shipowner because of damage caused to the ship in the course of cargo-handling or because of damage resulting from an unsafe port or berth. And also, the charterer becomes liable similarly to the shipowner, with P&I liability to cargo, pollution claims and etc. All charterers require cover for both damage to hull and other P&I liabilities. The so-called “charterer’s liability insurance” provides coverage for such risks.

Claims may arise in a variety of circumstances, such as when a charterer instructs a shipowner to load a cargo that unexpectedly damages a vessel’s cargo holds, or when a charterer orders a vessel to an unsafe berth which leads to grounding damage.

Charterers can find themselves with a liability for many P&I risks, but cargo claims are the most common area of exposure.