The pressure of modern ship operations and the advent of concepts such as just-in-time production mean that delays can be costly for all parties in the logistics chain. For those involved in a vessel’s operations like owners, charterers and managers, every unforeseen delay has a direct impact on profitability. Nordic’s Fixed Premium Delay Insurance products help protect ship operators by providing cover for delays and bridging the gap to where traditional Loss of Hire policies incept.
How does cover for delays typically work?
An operator’s mainstream marine insurance policies will not usually respond to losses caused by delay. Hull and machinery (H&M) covers the costs of repairs following an incident but not the lost revenue whilst those repairs and inspections take place. Likewise, P&I cover responds to the third party liabilities, legal and other costs as well as certain fines but excludes the financial consequences of delay, including time spent waiting whilst security is provided (which may be significant if a bank guarantee is required).
The only kind of insurance available for delays is Loss of Hire cover. But these policies only incept where there has been a H&M claim and typically carry a 14-day deductible as standard so restricting protection to long delays. For quality ship operators this makes recovery under these kinds of policies a very remote eventuality and adds a considerable cost burden of up to of 14 days’ revenue every time they suffer an incident.
The Nordic Solution
Fixed Premium Delay Insurance from Nordic Marine (Nordic) delivers a tailor-made solution by giving ship operators the ability to insure against the loss of revenue suffered during delays falling into the primary layer, i.e. for the first 14 days’ delay following an incident.
Designed by marine insurance experts with many years of experience in the delay insurance market, the Delay Insurance products deliver cost efficient protection against loss of revenue caused by delays following incidents occurring onshore or related to the ship itself. The cover is a specialised, stand-alone product not linked to H&M, P&I or any other policy and responds to a comprehensive list of insured perils - which is customisable upon request - that might cause delay to the ship.
By offering fixed premium together with fixed and agreed Daily Insured Amounts (DIA) plus the comfort of cash flow protection at the primary level, the Nordic solution provides ship operators with complete budgeting certainty around delay. It’s also fully customisable to meet clients’ individual needs and backed by Nordic's comprehensive in-house claims service. nmip.se
The West of England Group
The West of England Group is a leading global provider of maritime insurance and risk management solutions that has been helping to protect shipowners, operators, and charterers since 1870.
These fixed premium primary layer products provide cover for loss of earnings arising out of delays caused by a wide range of ship and shoreside perils. The primary layer is typically the first 14 days, but higher limits can be considered.
Delay - Primary Loss of Earnings
Nordic-Primary-Loss-of-Earnings PDF (100.3 KB)
We have a number of case studies that involved Nordic and highlights their outcomes as a direct result of a shipowner having Nordic's Fixed Premium Primary Delay product. These studies aim to help understand the scope of cover that can be obtained through Nordic.
H&M covers loss of tangible assets and the costs of repairing them but excludes loss of earnings.
P&I covers the liabilities arising out of incidents listed in the P&I Club’s rules but excludes loss of earnings.
Loss of Hire covers loss of earnings out of an event covered under the H&M policy but usually applies a 14 days’ deductible to each delay.
P&I-type perils include: illness, injury or death; contraband; pollution; desertion; detentions that concern crime, incidents involving other ships owned or managed, misdescription or misdeclaration of stores, stowaways, rescuing of refugees or saving of life at sea, quarantine of crew or passengers.
• Access to mainstream covers such as H&M and P&I
• P&I Crew Stop Loss Deductible Insurance
• Liability to Cargo Insurances
• Marine Yacht Insurances
• Marine Cyber Insurance
Nordic is primarily a provider of niche marine insurance products especially around delay but since 2017 they have also be able to provide H&M insurance as well as other more mainstream marine insurance products.