Charterers' and Traders' Risks

In many circumstances, these exposures will be significant and could be a threat to ongoing operations and the ability to trade. An increasing number of charterers and traders protect themselves against these ever-expanding risks and exposures by purchasing Tailor-Made flexible liability cover with North.

A charterer of a ship is often responsible for cargo loading and discharging operations and consequently may face significant cargo liabilities. Cargo claims can also arise from (a) incorrect or insufficient cargo tank or hold cleaning instructions to owners; and (b) the actual condition of the cargo pre-shipment. Charterers often have significant liabilities in both circumstances.

Charterers can be exposed to pollution liabilities and may be liable for Damage to Hull (DTH) claims, including stevedore damage, unsafe port or engine damage, for example, following the use of “off-spec” bunkers. Charterers may also be exposed to general average or salvage contributions, and in certain circumstances can be liable for personal injury claims.

Traders face similar, and other risks, being the owner of the cargo in addition to the charterer. Again, the risks are extensive and the liabilities can be significant.

The liability covers available from North ensure charterers are appropriately protected with the necessary levels of cover and support.

Many charterers believe they can avoid these risks simply by being “back to back” in a charterparty chain. Whilst it may be possible to pass some claims up and down the chain, charterers can nonetheless incur significant unrecoverable costs in doing so. There could also increased exposure when time chartering in and voyage chartering out ships. Charterers must be aware that they need to consider their position and role in any charterparty chain, particularly to owners and sub-charterers. Having access to the right team is crucial in ensuring you avoid or minimise liabilities in either direction.

Our charterers’ liability team has extensive experience of the potential issues which may arise, including the benefit of having worked with owners, charterers and traders over many decades.