Comprehensive Charterers Liability Cover

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RAETSMARINES COMPREHENSIVE
CHARTERERS LIABILITY COVER
www.RaetsMarine.com Charterers Liability Page 1

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INTRODUCTION
The RaetsMarine Comprehensive Charterers Liability Cover has been designed
to specially meet the needs of charterers, traders and cargo owners. As one of
the leaders in the field of Charterers Liability RaetsMarine is able to provide
tailor-made insurance cover by offering flexible terms and a network of service
providers on a worldwide basis. In addition RaetsMarine have a very experienced
team of claim handlers able to handle all type of Charterers Liability claims in a
efficient and professional manner.
CHARTERERS LIABILITY INSURANCE

At RaetsMarine we welcome any type of Charterers business. Be it tramp
chartering, both voyage and time charters, conducted by operators or by
commodity traders, who are chartering vessels to carry their own cargoes. All
can be covered under the RaetsMarine Comprehensive Charterers Liability
Cover.
Why do Charterers need cover?

To avoid discontinuity in their business caused by a liability, which was never
expected, but occurred notwithstanding. The marine adventure is subject to
unforeseen risks. As a consequence Charterers are exposed to liabilities, which
may reach or even exceed the value of the chartered vessel or the goods
shipped. As shipping practice prevails a Charterer will not be able to charter a
vessel on such terms that he can resist or exonerate all liabilities. Furthermore it
comes as no surprise that we are living in a litigious
Unforeseen risks and
environment. The Shipowner has insured his ship with a liabilities may disrupt a
Charterers business
P. & I. insurer and a cargo owner has insured his goods
with a cargo insurer. Both these insurers will seek recoveries on claims brought
against their policies. The Charterer is inevitably a party in the contractual chain
and can therefore be simply found. This is evidenced by our day-to-day practice
in handling Charterers liability claims.

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In most cases the Charterer even appears twice in the contractual chain. He is
the Charterer in the contract with the Shipowner (Time- or Voyage C/P) and he
becomes the disponent-owner in the contract with the cargo owners (Voyage
C/P, Booking Note, Contract of Affreightment or direct Bill of Lading booking).
Sometimes the contractual chain is longer with back-to-back and sub-charters,
which means there are more parties involved.
Even if a Charterer may feel he can resist liabilities it is

We cover liabilities, but
still appropriate to have insurance cover, as all costs for also all costs for
defending liabilities
defending liability claims are covered under our
Charterers Liability policy. You do not necessarily have to BE LIABLE to be
HELD LIABLE.
A charterer may think he is exonerated from liabilities, if in the Charter Party he is

protected by a clause that the Charterer can benefit from the Owners P. & I.
cover, as far as the P. & I. rules permit. Such a clause has no validity at all, as all
P. & I. insurers will not permit to cover the Charterer under the Owners P. & I.
policy.
At RaetsMarine we have a professional staff of qualified and experienced

persons to provide a tailor-made service. We are able to give in depth advice on
pro-forma Charter Parties and Bills of Lading, including an appropriate risk
analysis. Such approach will lead to active prevention, which may reduce certain
liabilities. All our Charterers and prospective Charterers are cordially invited to
contact us on this matter.
What liabilities may Charterers have?

The Charterer takes on board various risks. He often appoints his own agents,
his own stevedores and hires superintendents to
Except for the navigation
monitor the loading- and unloading of cargoes. The the Charterer may be in
same position as the
Charterer may appear on the Bills of Lading or may Shipowner

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even have signed the Bills of Lading in his own name.
Under any Charter Party the Charterer is ultimately liable for damages to the
chartered vessel. These damages may be caused by stevedores, by an unsafe
port or berth, by the cargo, or by the wrong fuel supplied to the vessel.
Apart from the major risks, being liability to cargo and liability to damages to the
vessel, the Charterer may also be held liable for other claims, such as collision,
personal injury, pollution, salvage, fines, stowaways, etc.
Lets have a look at the shipping practice and explain the contractual chain in a
string of contracts between the various parties, which is also showing the types
of Charterers.
THE CONTRACTUAL CHAIN
(CIF SELLER)

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An owner of goods needs a ship to perform his Sale Contract (S/C). He may
either be a CIF-seller or a FOB-buyer, the consequence of which will be that he
must charter a ship and thereby becomes a Charterer.
An owner of a ship needs goods to carry and will enter in to a Time charter (T/C)
or a Voyage charter (V/C) to get employment for his ship.
If owners of goods and owners of ships would be making shipping contracts

directly between themselves the Bill of Lading (B/L) could be the single contract
in the chain, however, reality in today's shipping is totally different. Each
movement of ship and cargo is involving various parties in different indentities,
which is creating a complex chain of contracts
Our Charterers Liability Insurance provides cover for these liabilities.
Types of Charterers and their apparent liabilities

The companies, which become involved with the chartering of a vessel can be
divided in the following groups:
1. Companies, which are operating a liner service, but do not own ships
(SHIPCO - FREIGHTCO).
2. Companies, which are trading various commodities and charter ships

to transport their own goods (CIF SELLER - FOB BUYER).
3. Companies, which operate in the tramp market by fixing ships and

cargoes as a freight contractor (SHIPCO - FREIGHTCO).
4. Companies, which combine logistics and charter ships as a part of their

integrated services (FREIGHTCO).

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1. Companies operating a liner service

A company operating a liner service is obliged to offer to their customers regular
sailings, which are scheduled on a fixed time table in advance. In most cases
vessels will be chartered on time charter basis for longer periods.
Local agents, who are appointed by the company operating the liner service,
generally book the cargoes. Usually the bookings are concluded on the shipping
line's Bills of Lading conditions and on a Liner Booking Note (B/N), which is
resulting in a contractual relationship between the liner company and the cargo
owner (shipper or consignee, depending on CIF/FOB conditions).
AND THEIR LIABILITIES:

Due to the fact that the liner company is issuing it's own Bills of Lading, the liner
company is becoming the Carrier and thus assuming
The Time Charterer is
certain liabilities for the safe carriage of the goods. controlling cargo
handlings, directing the
The cargo claims will be sent to the liner company, vessel to ports and
ordering vessels fuel oil
even if the claims are resulting from navigation errors
or seaworthiness of the ship.
As time charterer the liner company will be directing the ship to ports. If a port or
berth appeared not to be safe the time charterer will be liable for the damages to
the vessel.
The liner company is also appointing stevedores for loading and discharging.
Even if the stevedores would be liable for damages to the vessel, it is the time
charterers direct liability under the charter party with the Ship owner.
Under a time charter party the Charterer has to buy the fuel for the vessels
engines. If the fuel supplied to the vessel is causing damages to the engines the
time charterer will not be able to escape from liability.

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EXAMPLE OF A MAJOR CLAIM:

A container ship fully laden, including containers on deck encountered
stability problems once at sea, but still within the port limits. The vessel
capsized and grounded. A multi millions salvage operation was necessary
to rescue ship and cargo, or what was left of it. Ship owner and cargo
interests are claiming against the time charterer for loss of the vessel,
salvage expenses and cargo claims. Since the stability problems may
have been caused by bad stowage and/or misdescription of the weight of
the goods loaded, especially inside the containers, the time charterers
have a potential liability to this claim.
2. Companies transporting their own goods

These companies are commodity traders or manufacturers, who have to deliver
their own goods to various customers, or companies who are buying goods
overseas, which need to be transported.
It is common that companies in this category are primarily concerned about
covering their risks for loss of or damage to their goods under a marine cargo
insurance, however, as they also become the Charterer of a ship, they are taking
on board various liabilities, which can be covered under our Charterers' Liability
Insurance.

The main area of liability exposure is damage to the chartered vessel caused by
stevedores during loading and discharging, or by the cargo carried, or by unsafe
port or berth.
In many Charter Parties the Charterer is also liable for a variety of loss of or
damage to the cargo. This means the Charterer may
Charterers shipping their
be liable for loss of or damage to his OWN cargo, but own cargoes must match
cargo and charterers
this risk he had already covered under his cargo liability insurance
insurance. How is this possible?

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The answer is simple: At the time the loss or damage becomes apparent the
Consignee is taking delivery against presentation of the Bill of Lading. If there is
a loss of or damage to cargo the insurance company covering the cargo will be
notified. If they pay for a loss or damage they will be subrogated in the rights of
the Consignee and will subsequently try to recover their loss from the Ship owner
under the Bill of Lading. If they succeed the Ship owner (or rather his P. & I.
Club) will take recourse under the terms of the Charter Party. It may thus happen
that a loss or damage, which has been recovered by the marine cargo insurer in
the first place must be paid back to the Ship owner in the second place, which
means that the marine cargo insurance company has received a premium and
will say: "Thank you very much".
The solution is also simple: Upon agreeing the marine cargo insurance policy it is
necessary to demand a waiver of recourse clause, which means that the marine
cargo insurance company will stop their recovery, if it appears that the Assured
can be held liable in the scenario as explained above. With such a waiver of
recourse clause it will be possible to exclude liabilities to cargo under our
Charterers Liability Insurance, which will reduce the premium substantially.
Under a CIF sale or a FOB purchase the seller (shipper) resp. the buyer
(consignee) is the Charterer of the vessel. In both cases there will be a marine
cargo insurance in their own name and for their own account, which means that
the required waiver of recourse clause can be agreed Is the sale contract
CIF, FOB or C+F?
upon. There is however one situation where the cargo
owner has no control over the marine cargo insurance
and that is in respect of a C+F sale. Under such conditions the buyer (consignee)
will take out the marine cargo insurance, whereas the seller (shipper) is still
chartering the vessel. In such cases it will be necessary to include in our
Charterers Liability Insurance a so-called contingent coverage for cargo liabilities,
which we can provide.

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A tanker with coated cargo tanks was loaded with a contaminated cargo of
crude oil, which caused a major damage to the vessels tank coating. After
discharge the vessel had to go to a shipyard for immediate repairs. The
Ship owners claimed against the Sellers of the cargo, in their capacity as
Shippers under the B/L contract and in their capacity as Charterer of the
vessel under the voyage c/p, for the repair costs and the loss of time.
3. Companies operating as freight contractor or ship operator

This type of contractor/operator sells transport or logistics expertise. He neither
owns the vessel nor the cargo, but he knows how to bring the two together.
Forwarding agents may also come under this category. In most cases there are
two shipping contracts, in which this type of contractor/operator appears as a
principal. With the CIF-seller or FOB-buyer he has contracted on a Booking Note
(B/N) or Charter Party (C/P). The operator (FREIGHTCO) will appear in this
contract as Disponent-Owner. Ships will be chartered on a Time charter (T/C) or
on a Voyage Charter (V/C). In these Charter Parties the operator (FREIGHTCO)
will appear as the Charterer.

It goes without saying that this type of
The operator is disponent
contractor/operator is exposed to a variety of owner in C/P with cargo
interest and Charterers in
liabilities, which can be covered under our Charterers C/P with the shipowner
Liability Insurance. The operator not only has
liabilities towards the Ship owner in the head Charter Party, but also as
Disponent-Owner towards the sub-Charterer. In most cases these liabilities are
not back-to-back.

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EXAMPLE OF MAJOR CLAIM:

A general cargo vessel loaded with an iron concentrate, which requires
the highest care for safe carriage, exploded on the high seas and sank.
Evidence is available that the cargo caused the explosion. The Ship owner
is claiming loss of his vessel and has brought a claim against the voyage
charterer of USD 20m.
4. Companies offering integrated services

For this category it is difficult to comment in general terms. It will be necessary to
make a profile and analysis of all the activities. Our We also cover
Charterers Liability Insurance will be tailored to NVOCC-operators
comprehensively cover the liabilities of this type of

Charterer, who may even be an NVOCC-operator.

A container ship fully laden sank on the high seas after a heavy explosion
and fire. The Ship owner takes the view that the explosion occurred in one
of the containers and is therefore claiming for the total value of the ship
(USD 10 millions). The cargo owners are claiming for the total value of all
cargo on board (USD 6 millions). The claims are also brought against the
NVOCC-operators.

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Types of Charter Parties
1. Time Charter Party (T/C)
2. Voyage Charter Party (V/C)
3. Booking Note (B/N)
1. TIME CHARTER PARTY

For the carriage of dry cargoes the BALTIME and the NYPE (New York Produce
Exchange) form of Charter Party are commonly used. Generally speaking the
Baltime is more in favor of the Ship owner, whereas the NYPE is more
advantageous to the Charterer. In the Baltime c/p the Ship owner is highly
protected by clauses 9 and 13. These clauses do not exist in the NYPE c/p.
In short the main characteristics of a Time Charter Party are as follows:
the Ship owner takes care for a seaworthy ship with valid classification
and employs the Captain and the Crew, enabling the ship to safely sail
between the ports as ordered by the Charterer
the Charterer takes care for the loading, stowage, lashing/securing and
discharge of the cargoes and gives the Captain orders and instructions
as to the cargoes to be shipped to and from various ports
the Charterer orders and pays for the vessel's bunkers
In the tanker business other types of Time Charter Parties are used in which the
main characteristics are similar as above.
2. VOYAGE CHARTER PARTY

The form commonly used for dry cargo is the Gencon Charter Party, but there
are many other forms. In the tanker trade the Asbatankvoy Charter Party is the
most popular form. The principle in all such forms is that the type of cargoes and

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the ports between which the cargoes are being carried are known beforehand.
On Liner Terms the Ship owner takes care for loading, stowage and discharge,
whereas on FIOS terms (Free In Out Stowed) the Charter Parties and Booking
Charterer takes care for it. In both cases it is not Notes are negotiated between
the parties and are only valid
the Charterer who gives instructions to the between these parties
Captain, but always the Ship owner. Consequently the liabilities for a Voyage
Charterer are slightly less than for a Time Charterer.
3. BOOKING NOTE
A Booking Note (B/N) is a contract between the CIF-seller or FOB-buyer
(Merchant) and a shipping company (Carrier) for the carriage by sea of certain
goods. The form used in most cases is the "CONLINEBOOKING" Liner Booking
Note. The special nature of this contract is that the terms and conditions of the
Booking Note are superseded by the Bills of Lading conditions at the time of
actual shipment of the goods.
We constantly give advice about Charter Parties, Bills of Lading and other
contracts of carriage. We draft and recommend specific clauses and make pro-
forma Charter Parties, as and when required. This additional service plays an
important role in our active loss prevention programs.

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Bills of Lading
Whereas the Charter Party is a contract negotiated between the parties on the
basis of freedom of contract, the Bill of Lading is a document, which springs in to
existence upon completion of loading and is binding
Bills of Lading spring in to
between various parties, who have not contracted existence between various
parties
with each other, on the basis of the clauses of the Bill
of Lading and compulsory law, such as the Hague-Visby Rules.
Types of Bills of Lading
1. Congen B/L used in combination with Charter Parties
2. Conline B/L used in liner trade
3. Through B/L used in trades with on-carriage to final destination
4. Combined Transport B/L used in trades with different means of

transport (ship another ship rail road)
Many liner companies use their own Bills of Lading. Although they may be differ
in layout and content these Bills of Lading are mostly based on the standard
Conline B/L.
The Bill of Lading has three important functions:
1) It is evidence for receipt of the goods on board at a certain

date / place and in a certain condition;
2) It is evidence of the contract of carriage between the

carrier and the Bill of Lading holder.
3) It is a document of title to the goods shipped. The holder of

the B/L is entitled to the delivery of the cargo. The B/L is a
negotiable document. It can be transferred to other parties
during the voyage.

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Various parties to the bill of lading

As explained above the Bill of Lading springs in to existence, is binding between
various parties, has three functions and is subject to compulsory law.
When goods are sold there is a seller and a buyer, who become the shipper and
the consignee in the B/L. When the goods are traded on a letter of credit, the
banks will also come in to play as parties. It is also possible that the goods are
sold one or more times during the voyage, which means that the Bill of Lading is
changing hands.
On the other side of the string is the carrier. Primarily this is the shipowner, but if
other names appear on the face of the Bill of Lading or if the Bill of Lading is
signed on behalf of the Charterer, those other parties will be the carrier.
The problem about Bill of Lading law is that every case will be considered on the
prevailing circumstances and many countries have different laws about the
interpretation of the Bill of Lading.
Precautionary measures at RaetsMarine

We have a warranty in our standard terms and conditions that the Bills of Lading
need to be issued and signed by or by authority on behalf of the Master.
The reason for this warranty is simply to unravel the complexity of the Bill of
Lading, and more importantly the liabilities resulting from it. Our rates are a
reflection of the risk. It must therefore be clear from the beginning which liabilities
we must insure, hence our practical solution with the Bill of Lading warranty.
The Charterer of a vessel may control the loading,

The Charterer should
stowage and discharging of the cargo, make stowage never exclude the
Shipowner from his Bill
plans, instruct the Master, appoint superintendents and of Lading obligations
agents, etc etc, however, the responsibility for navigation, safety, compliance

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with ISM and ISPS and seaworthiness will remain with the Master and the
Shipowner. Those responsibilities cannot even be delegated to the Charterer.
Just for this reason the Charterer should never voluntarily choose to become the
carrier under the Bill of Lading.

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INSURANCES FOR CHARTERERS
1. Charterers' Liability Insurance
2. Marine Defence Insurance
3. Cargo Owners Legal Liability Insurance
4. Bunker Insurance
5. Freight Insurance
6. Charterers War P&I Insurance
7. Ancillary covers
Below please find a summary of these insurances:
1. CHARTERERS' LIABILITY INSURANCE

Charterers' liabilities are the contractual and legal liabilities of the Charterer of a
ship.
Ship and cargo are together during the voyage, but the parties to be identified in
the string of contracts are not. Certain liabilities are inherent to chartering and
cannot be avoided.
It is a matter of active prevention to secure the financial exposures through a

Charterers Liability Insurance, but that is not enough. It is also necessary to
understand the nature of the cover and even more so, it's restrictions and
exclusions.

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Cover is being provided in the following sections:
damage to the vessel
death and personal injury
damage to property of third parties
damage to cargo
collision
wreck removal
quarantaine costs
pollution
general average
costs of formal investigations
sue and labour costs
fines
The main risks are liability to loss of or damage to cargo, liability to damage to
the vessel and costs, which are explained as follows:
1.1 LIABILITY TO CARGO

Depending on the type of Charter Party and it's amendments the Charterer may
be held liable for loss of or damage to cargo arising from:
bad stowage
handling damages (stevedores)
shortages (pilferage, tally, etc)
non-delivery (non arrival, wrong port, etc)

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1.2. LIABILITY TO DAMAGES TO THE VESSEL

The principle rule is that the Charterer of a ship can be liable for damages to the
vessel caused during the contracted voyage or period. Also when in certain
Charter Parties it is stipulated that stevedore damages have to be settled
between the Owners and the Stevedores the Charterers are ultimately liable.
The type of liabilities for which the Charterers can be held liable are:
stevedore damages
damage to the ship by the cargo carried
damage to the ship by defective fuel oil
unsafe port/berth
If the chartered ship must be repaired and the Charterer is liable for the damages
to the ship the time lost by the repairs are also covered.
1.3. COSTS
All costs, which have to be made to defend a legal liability claim are covered
under the Charterers' Liability insurance. The costs that The costs play an
are regularly incurred are survey expenses and lawyer important part in the
coverage
fees. Even if the Charterer is not liable, but a party is
pursuing a claim, the costs for such unwarranted liability claim are also covered.

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RESTRICTIONS AND EXCLUSIONS
The most important restrictions and exclusions of a Charterers' Liability

Insurance are as follows:
1. It is not allowed to waive any rights of legal limitation sums, which will
apply in any legislation or convention.
2. Cover for loss or damage to cargo is subject to Hague / Hague-Visby

Rules. Any rights or immunities may not be waived. In countries where
the Hamburg Rules apply compulsory cover will be extended
accordingly.
3. P. & I. insurance will give subsidiary cover, which means that any other
policy, which will cover certain liabilities, will prevail.
4. Loss or damage to own or leased containers or other own or leased

equipment is not covered.
5. Loss of freight, hire or bunkers is not covered.
6. Loss of time as a result of cancellation of a vessel is not covered.
7. Financial losses resulting from bad debtors are not covered.
8. Insolvency or fraudulent acts of agents are not covered.
9. On carriage of goods the following occurrences are excluded from

cover:
a) issuance of "ad valorem" bills of lading
b) carriage of jewelries and banknotes, unless agreed in

writing with the insurer
c) deviation of the contracted voyage
d) delivery of goods without original bill of lading

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e) issuance of ante- or post-dated bills of lading
f) issuance of bills of lading with intentionally wrong

description
g) carriage of goods on deck
For the items under a, b, c and g additional insurance can be obtained.
LETTERS OF INDEMNITY (L.O.I.)

We are aware of the fact that L.O.I.'s are negotiated to find solutions for
irregularities (clean Bs/L, change of destination,
If a Letter of Indemnity
delivery of cargo without original B/L). It should leads to a fraudulent act
there is no cover and no
however be noted that the above restrictions and legal enforcement
exclusions remain fully in force, even if a letter of available
indemnity is negotiated through our recommended wording.
2. MARINE DEFENCE INSURANCE

This type of insurance covers the legal costs and expenses, which a Charterer is
bound to make due to a dispute under the Charter Party or as a result of a
dispute with any party related to the carriage of the goods for which a vessel was
chartered.
The reasonable legal costs and expenses are covered in respect of claims and
disputes in connection with:
hire or off-hire, freight, deadfreight, detention, laytime, demurrage,

despatch or any other claim or dispute under the Charter Party, Bill of
Lading or another contract of carriage in respect of the Insured Vessel;
supplies to the Insured Vessel;

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charges, disbursements and accounts received from agents,

stevedores, customs, brokers, harbour authorities or other servants of
the Assured;
loading, stowing, trimming, discharging, lighterage of cargo on, or from
the Insured Vessel;
loss of, damage to or detention of the Marine defence (FD&D) is
covering costs for disputes
Insured Vessel; related to the operation of
the chartered vessel
general or particular average contributions or
charges;
salvage or towage services rendered to the Insured Vessel;
representation of the Assured at official investigations or other inquiries
in relation to the Insured Vessel;
actions by, or against passengers intended to be or being or having
been carried on the Insured Vessel, provided the carriage of passengers
was approved by the Company;
actions by, or against crew members, or their personal representatives
or dependants and stowaways;
actions by, or on behalf of a State or any public body against the
Assured or the Insured Vessel;
amounts due from, or to insurers, other than the Company.
The cover includes - free of charge - all the work being carried out by our claim
handling staff, who are all have shipping and chartering experience and will do
their utmost to bring defence claims to a quickest possible solution. It should
however be noted that an insurance policy cannot be treated as an extension of
your operations department. Each dispute will require the full attention and
support of your chartering and/or operations staff, especially in providing full
background information, collecting of evidence and copies of all correspondence
and contracts.

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3. CARGO OWNERS LEGAL LIABILITY INSURANCE

In addition to the Charterers Liability cover we can offer cargo owners legal
liability insurance (COLL). This COLL will mainly be of interest to traders of
cargo which may cause pollution. Examples of such cargoes are persistent oils,
chemicals and gas.
COLL insurance will provide cover to the charterer in his capacity as owner of the
cargo (as opposed to or in addition to his capacity as charterer of the vessel) for
pollution claims.
4. BUNKER INSURANCE
This is an insurance for Charterers when they have their own bunkers on board
the vessel they have chartered.
This insurance covers the loss of bunkers as well as the contribution of bunkers
to General Average. The sum insured is the value of bunkers declared by the
client.
This insurance can be taken by Charterers who have a Charterers Liability

insurance and who have an insurable interest in the bunkers.
5. FREIGHT INSURANCE
When the freight to be earned for the voyage becomes only payable on or after
delivery of the goods in the discharging port, the freight value is at risk during the
voyage. If the cargo is lost during the voyage the Charterer will not receive the
freight. This risk can be covered with a freight insurance.
The sum insured is the freight or profit that the client declares.
6. CHARTERERS WAR P & I INSURANCE

This insurance is to cover the legal liability and expenses as Charterers in
respect of War Risks.

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Cover is worldwide excluding war risk areas (such as Iraq and Somalia).
Maximum amount insured is Combined Single Limit USD 50m.
7. ANCILLARY INSURANCES
In addition to our Charterers Liability, Marine Defence Insurance, Cargo Owners
Legal Liability insurance, Bunker Insurance, Freight Insurance and Charterers
War P&I Insurance, which are our own products, we facilitate some additional
insurances for our Charterers client base.
S.O.L. INSURANCE
Our Charterers Liability Insurance is covering a regular sequence of events all in

conformity with underlying contracts. The standard rule is that cargo must be
shipped as stated on the Bills of Lading. If the Charterer commits a breach of
contract, which is subject to an exclusion as stated above under Restrictions
and Exclusions of the Charterers Liability Insurance we might be able to arrange
coverage through a S.O.L. Insurance. Any breach or deviation must be reported
prior to commencement of the voyage, so cover can be arranged. The maximum
sum insured is agreed in advance.
S.O.L. is the standard name of this insurance and it stands for Shipowners
Liability Insurance. Notwithstanding this name Charterers can use it as well.
Examples of a deviation or breach of contract are as follows:
- Transhipment without being mentioned in the B/L ;
- Cargo being carried on vessels other than named in the B/L;
- Cargo shipped on deck whereas under deck B/L is issued ;
- The B/L is ante-dated or post-dated ;

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- Actual port or ports is not in conformity with the port or ports in B/L ;
- Intermediate storage cargo before delivery as per B/L ;
- Geographical deviations, which are not mentioned in the B/L ;
- Cargo being transferred to and/or from and/or being carried on board

feeder vessels ;
FREIGHT INSURANCE
When the freight to be earned for the voyage becomes only payable on or after
delivery of the goods in the discharging port, the freight value is at risk during the
voyage. If the cargo is lost during the voyage the Charterer will not receive the
freight. This risk can be covered with a freight insurance.
The sum insured is the freight or profit that the client declares.
DETENTION INSURANCE
This insurance is to cover the net loss of the Charterer if he is unable to use the
vessel following damage to the vessel for which the Charterer is legally liable
under the Charter party.
This insurance will indemnify the Charterer for loss of earnings and/or additional
expenses and/or damage and/or loss of vessel(s) resulting from detainment
and/or confiscation and/or arrest and/or restraint and/or seizure and/or
expropriation or any other form of detention or loss of free use and disposal of
vessel(s) by any government or port or customs authority and/or any authorized
bodies and/or claimants on the vessel in which the assured has no interest,
including but not limited to the discovery of or the suspicion of the presence on
board of illegal narcotics or drugs or by reason of any other infringement of
customs or other regulations.
Loss or earnings as declared at time of attachment, and additional expenses (to

be proved at time of loss) to include but not to be limited to costs of

RaetsMarine
transshipment, crewing (including repatriation and substitution expenses),

bunkers, demurrage, warehousing, substitute chartering, depreciation, cargo
liabilities, legal expenses and cost of providing security to obtain the release of a
vessel but excluding any fines or penalties absolutely.
APPLICATION FOR INSURANCE

We do not have standard tariffs and conditions. Every Charterer is different. We
make an appropriate analysis of risks and activities. Our terms and conditions
are tailor-made. We have flexible rating schemes to avoid unnecessary
administration and calculation. Our rates and conditions Every Charterer will be
judged and rated in
reflect the risk to meet sound underwriting standards and accordance with risks
last but not least: Our knowledge of the Charterers and past performance
business puts us in a position to be competitive.
Before quoting we require information from the Charterer as per attached Enquiry
Form.
CONCLUSION
You could consider RaetsMarine as a mere underwriter of marine liability
insurance. We literally go the distance in rendering this service. We manage
marine liability insurance capacity with first class and transparent financial
security at fixed premiums. You can call us into action
First class
from anywhere in the world. We have a correspondent in financial security
every port where merchant ships go. The underwriting

and claims teams at our headquarters in Rotterdam, and the teams in our branch
offices in Paris, London and Singapore, are run by people who have a firm grasp
of their business. They guarantee that your insurance cover exactly meets your
requirements.
So far so good. These are the facts, the firm aspects of our business. If this is
what you expect from a marine underwriter, you are hereby sufficiently informed.

RaetsMarine
There is, however, one fact that we believe is so important that it will dominate
the rest of our story:
"we are responsible for the performance under an insurance policy"
We believe that our main concern at RaetsMarine is not only the fact that your
financial security is warranted, but also how it is performed. It is of the utmost
importance that we are able to give immediate response, that we create solutions
where needed and that we make firm agreements. Our organization plays a very
decisive role in this somewhat unseen process.
The quality of insurance cover

In reality it costs much more to run a genuine insurance cover than just a
cosmetic facility. RaetsMarine works exclusively with first class security at fixed
premiums . With all the infrastructure of claims servicing. Amlin Corporate
We do this because we fully understand that the liabilities Insurance
of Charterers are more complex and need to be closely
monitored. We are therefore delighted to work together with Amlin Corporate
Insurance N.V. as risk carrier. Amlin Corporate Insurance N.V.are A- rated by
Standard & Poors.
The quality of fixed premiums and comprehensive insurance package

Unlike the P. & I. mutual Clubs, who may impose general increases and
supplementary calls, we at RaetsMarine offer our clients fixed premiums and
each and every account is judged on its own record and performance. The rate
reflects the risk, thats it.
Unlike some other Charterers Liability facilities, such as Fixed premium

advantages against
at Lloyds, we at RaetsMarine offer our clients a P. & I. mutuals
disadvantages
comprehensive insurance package, which is tailored to

RaetsMarine
the clients needs. Besides liability coverage, we can offer marine defence (F.D.
& D.) coverage and other insurances, such as bunker-, freight-, war- and S.O.L.
insurance.
If Charterers are entered in a so-called I.G.A. (International Group) P. & I. Club,

they should consider the following consequences:
1. A P. & I. Club is primarily for shipowners. By statute a P. & I. Club can

only accept a limited amount of fixed premium business. It seems logical
to say that Charterers will always come in second place.
2. There is an apparent conflict of interest if the Charterer and the chartered
vessel are insured by the same P. & I. Club
3. The policy wording of a P. & I. Club is based on the Club Rules and is
totally focused on the Shipowner and mutuality. Due to the mutual
structure of a P. & I. Club the rules are both complex and subject to
uncertainties, especially for Charterers, because in many places the cover
is discretionary and subject to approval by the management of the P. & I.
Club and its Board of (Shipowners)Directors.
4. The Board of Directors of any P. & I. Club consists of Shipowners, not
Charterers
5. The rules of a P. & I. Club do not cover the Charterers liability for
damages to the vessel. A. P. & I. Club must therefore offer a separate
insurance market policy to complete the risks to be covered for
Charterers. On this damage to hull cover the P. & I. Club acts as a mere
agent and obviously it makes the total cover required more expensive and
more complex.
All the P. & I. Clubs have made ISM and ISPS compliance a condition of cover,
which means that all Charterers entries are also subject to this obligation, which
is unfair to a Charterer, simply because the Charterer has no actual control over
ISM/ISPS compliance by the Shipowner.

RaetsMarine
The quality of claims service

We work under conditions in which circumstances can change in a flash, in which
decisions must be made very quickly. Our claims team -
In house claim handling
most of them enjoy an excellent track record in shipping expertise with Sherlock
Holmes approach
and insurance - follow every movement of your claim or
dispute and give support when and where necessary. We call it "hands-on
steering".
Many costly claims and disputes arise out of inadvertently imprecise drafting of
clauses in Charter Parties, Bills of Lading and other shipping contracts. We
encourage you to contact us about the drafting and checking of proforma Charter
Parties or other contracts. It may also happen that you wish our advice about a
contract or a clause, whilst you are still negotiating a contract.
We act as consulting detectives. As such we are mirroring the magnificent

talents of Sherlock Holmes. We take nothing for granted, we will never stop
investigating, we will leave nothing to chance to unravel our clients cases.
The quality of communication

According to RaetsMarine, investing in people and materials also means
investing in communications - in human as well as in technical terms. Because
the entire world is our workplace, we must always attempt to bridge the gaps in
language, time and cultures. To begin with, there's the We are only one
telephone call away
contact with you - our client. Communication between from you
you and us occurs directly, by phone, e-mail or fax or
passes through our network of brokers and correspondents.
Automation and computerization is a never-ending process in which we invest

much time and money in order to maintain our advantage. Through our data

RaetsMarine
systems we have immediate access to all underwriting and claims information.
The quality of our knowledge about your business

From reading the previous paragraphs, we hope that you have gained faith in our
knowledge of your business. But you need more than that to be successful in
marine insurance. Let us state this once again
"our responsibility is the performance under an insurance policy"
That means that we, as specialist marine underwriters, must know all about the
Charterers' business. Every aspect has its own conditions, which we must always
take into consideration. And, of course, it is also in our
Shipping knowledge
interest to avoid and minimize claims. Our people are prevails
available and ready to adapt to changing conditions and
demands. Our service is always tailored to your
requirements. You can see how well such a partnership works when you decide
to use RaetsMarine.
LIMITS OF LIABILITY PROVIDED

The maximum amount insured we can offer at RaetsMarine is (any one accident
or occurrence):
Charterers Liability Insurance USD 500 million

Cargo Owners Legal Liability Insurance USD 500 million
Charterers War P&I Insurance USD 50 million
Charterers Defence Insurance (F.D.&D. Insurance) USD 2 million
Bunker Insurance USD 2 million
Freight Insurance USD 2 million

RaetsMarine
For a quick and effective handling of your enquiry, we kindly request you to
provide us with the following information:
Name of charterer and

place of business
Type of vessels
Trading areas
Type of cargoes
Type of trade Liner trade Tramping
Percentage of total volume % %
Cargoes to be shipped Own cargo Third party cargo

Contract with owners:
Time- or voyage Time charters Voyage charters
chartering
Which charter party
forms are commonly
used
Contract with shippers /

cargo interests:
Charter Parties, COAs,
Booking Notes, Direct
B/L bookings
Type of Bills of Lading to Blank Owners Bs/L Own Bs/L (with Charterers
be used logo/address on its face)
Are Bs/L always signed
by or by authority on
behalf of the Master
Expected date of entry

RaetsMarine
How many tons of cargo

is expected to be
shipped in 1 year
Expected number of
vessels to be chartered
per annum
Average size (GT) of
vessels
Average duration of
charter periods and/or
voyage
Which policy limit is

required in US Dollars 5 million 10 million 20 million 25 million 50 million
Deductibles Hull US$
Cargo US$
Others US$
Quotation for defence

cover (legal costs)? YES NO Deductible US$
Name of insurance
broker
Name of present P. & I.

Club/Insurer
Loss record of the last 5

years
Present insurers loss

record to be provided on
request
Please complete this form and send it back to us. We will give your enquiry
immediate attention and will respond the same day or latest the first working day
after having received the requested information. Thank you.

Comprehensive Charterers Liability Cover

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Comprehensive Charterers Liability Cover

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RaetsMarine

www.RaetsMarine.com Charterers Liability Page 1

CHARTERERS LIABILITY INSURANCE

Why do Charterers need cover?

www.RaetsMarine.com Charterers Liability Page 2

Even if a Charterer may feel he can resist liabilities it is

A charterer may think he is exonerated from liabilities, if in the Charter Party he is

At RaetsMarine we have a professional staff of qualified and experienced

What liabilities may Charterers have?

www.RaetsMarine.com Charterers Liability Page 3

even have signed the Bills of Lading in his own name.

THE CONTRACTUAL CHAIN

www.RaetsMarine.com Charterers Liability Page 4

If owners of goods and owners of ships would be making shipping contracts

Our Charterers Liability Insurance provides cover for these liabilities.

Types of Charterers and their apparent liabilities

2. Companies, which are trading various commodities and charter ships

3. Companies, which operate in the tramp market by fixing ships and

4. Companies, which combine logistics and charter ships as a part of their

www.RaetsMarine.com Charterers Liability Page 5

1. Companies operating a liner service

AND THEIR LIABILITIES:

www.RaetsMarine.com Charterers Liability Page 6

EXAMPLE OF A MAJOR CLAIM:

2. Companies transporting their own goods

AND THEIR LIABILITIES:

www.RaetsMarine.com Charterers Liability Page 7

www.RaetsMarine.com Charterers Liability Page 8

EXAMPLE OF A MAJOR CLAIM:

3. Companies operating as freight contractor or ship operator

AND THEIR LIABILITIES:

www.RaetsMarine.com Charterers Liability Page 9

EXAMPLE OF MAJOR CLAIM:

4. Companies offering integrated services

comprehensively cover the liabilities of this type of

EXAMPLE OF A MAJOR CLAIM:

www.RaetsMarine.com Charterers Liability Page 10

Types of Charter Parties

1. Time Charter Party (T/C)

2. Voyage Charter Party (V/C)

3. Booking Note (B/N)

1. TIME CHARTER PARTY

In short the main characteristics of a Time Charter Party are as follows:

the Charterer orders and pays for the vessel's bunkers

2. VOYAGE CHARTER PARTY

www.RaetsMarine.com Charterers Liability Page 11

www.RaetsMarine.com Charterers Liability Page 12

Types of Bills of Lading

1. Congen B/L used in combination with Charter Parties

2. Conline B/L used in liner trade

3. Through B/L used in trades with on-carriage to final destination

4. Combined Transport B/L used in trades with different means of

The Bill of Lading has three important functions:

1) It is evidence for receipt of the goods on board at a certain

2) It is evidence of the contract of carriage between the

3) It is a document of title to the goods shipped. The holder of

www.RaetsMarine.com Charterers Liability Page 13

Various parties to the bill of lading

Precautionary measures at RaetsMarine

The Charterer of a vessel may control the loading,

www.RaetsMarine.com Charterers Liability Page 14

www.RaetsMarine.com Charterers Liability Page 15

INSURANCES FOR CHARTERERS

1. Charterers' Liability Insurance