Charterers Liability Insurance

Why Do I Need Charterers Liability (P&I) Insurance?

Charterers may sometimes assume that the terms in a Charterparty providing them with the benefit of the Shipowner’s P&I cover are sufficient for their needs. However, this is not the case. The benefit of Shipowners P&I cover cannot be assigned or extended to other parties unless the P&I entry itself has been formally amended. Even if the benefit is successfully assigned, the Shipowner-focused terms of cover will not adequately protect Charterers from the additional and specific risks that are unique to their operations. Amana Marine Charterers P&I insurance provides coverage for the special risks faced by Charterers, ensuring that they are fully protected against liabilities that may arise in their operations. The principal risks covered under Amana Marine’s Charterers P&I insurance are as summarized below. Specific details are outlined in Amana Marine’s Rules of Entry, Class VI, Rule 4. ​​​​​​​

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Defense and Legal Costs

Amana Marine’s Charterers P&I is designed to cover the exposure of Charterers to legal liabilities arising from contracts, negligence (tort), or breaches of maritime and other laws. In addition to covering the direct costs of these liabilities, Amana Marine P&I covers the expenses of comprehensive and proactive liability defense, including surveys, claims adjustments, legal advice, and ultimate settlement on the best terms for the Member.

Damage to Hull (DTH)

Charterers are often obligated by the terms of the Charterparty to nominate and ensure a safe berth or port. A breach of these obligations can lead to significant damage to the ship’s hull, potentially resulting in a large H&M recovery claim against the Charterer for repair costs and consequential losses. Charterers may also be held liable for wreck removal costs. Amana Marine Charterers P&I covers all of these risks.

Cargo Damage

Charterers operating in the liner trades may issue Bills of Lading (B/L) naming them as the contracting carrier, making them directly responsible for cargo claims related to damaged cargo. Charterers could also find themselves liable for cargo damage if a mistake occurs in the B/L process, or if damage happens during loading and discharge due to stevedores employed by the Charterer. Additionally, under the NYPE Time Charter, damage claims are typically shared between Charterers and Shipowners. Amana Marine Charterers P&I covers all of these risks.

Off-spec Bunkers

Charterers are required to provide bunkers that meet the precise technical specifications of the shipowner. Failure to do so can result in damage to the ship's engines and contamination of the bunkers, leading to large claims from the shipowner for repairs and removal of the off-spec bunkers. Amana Marine Charterers P&I covers these risks.

Salvage and General Average (GA)

In the event of salvage services, the benefiting parties must contribute proportionally to the value of the maritime property saved, including cargo, bunkers, and freight. Time Charterers must provide a salvage guarantee and contribute to the salvage award based on the value of their bunkers. Similarly, Voyage Charterers who own the cargo on board will be required to contribute. If GA is declared by the shipowners, Charterers will be obligated to make separate guarantees and contributions. Amana Marine Charterers P&I covers all of these risks.

Fines

Charterers can be fined by maritime authorities, including customs officials, for various reasons, such as cargo shortages, damage claims, non-compliance with cargo regulations, smuggling, and immigration breaches. These fines can be imposed directly on Charterers or may form part of an indemnity claim from Shipowners or Sub-charterers. Amana Marine Charterers P&I covers all of these fines.

Injury or Death of Stevedores, Ship’s Crew, or 3rd Parties

Charterparty terms may make Charterers financially responsible for cargo handling, stowing, and discharging. In such cases, Charterers could be held directly liable for the injury or death of any person involved in these operations, including stevedores, crew, or other third parties. Amana Marine Charterers P&I provides coverage for these risks, including potential claims arising from negligent cargo handling or unsafe stowage.

Fixed and Floating Objects (FFO)

Damage to jetties, shore cranes, navigational buoys, and other such FFO objects is typically covered by Shipowners’ P&I. However, if the damage results from a breach of the Charterparty’s safe port/berth warranty, the Shipowners and their P&I Club may bring a recovery claim against the Charterers. Amana Marine Charterers P&I covers these risks.

Pollution

Pollution from persistent oil cargo on tankers or from bunker tanks is primarily regulated by the Civil Liability Convention (CLC), which shields Charterers from liability. However, this protection does not extend to cases where the pollution arises from a breach of the Charterparty’s safe port/berth warranty. Furthermore, the Bunker Convention holds Charterers directly liable for bunker fuel spills and the resulting environmental damage. Amana Marine Charterers P&I covers these complex risks, helping Charterers defend themselves in such cases.