Builders Risk Insurance

Ship building is a time-consuming as also a capital-intensive endeavour. Builders’ Risks Insurance affords protection to ship builders (yards) from the time the keel of a ship is laid, through the building activity, till the sea trial is successfully accomplished (at times, even beyond, i.e., till the ship is delivered to the owner), and can therefore run through multiple underwriting years. As such, it presents the carriers of insurance with a huge accumulation of potentially “static risk”. On the other hand, the policy offers ship builders protection against risk for the value of the ship, which increases progressively during the course of construction.

Risks Insured

• This cover is meant for the ship builder (ship yard). However, it can also be placed for the owner of the vessel but only as a co-insured, with the approval of the underwriter
• Institute Clauses for Builders’ Risks 1/6/88 grants cover against all risks of loss of or damage to the subject matter insured, caused and discovered during the period of insurance subject to the terms, conditions and exclusions given in the policy
• Covers physical loss (total or constructive) or damage to the vessel during the period of construction, during trial runs and putting the vessel afloat
• Covers collision liability, and protection and indemnity exposures
• Covers loss of or damage to the vessel caused by any governmental authority to prevent or mitigate a pollution hazard, or threat thereof
• Covers loss or damage to the subject matter insured, caused and discovered during the period of insurance, arising out of faulty design of any part or parts. Please note that the damage arising out of the faulty design is covered, not the faulty parts
• Covers vessel’s proportion of General Average and Salvage

Excluded Perils

• Earthquake
• Volcanic eruption
• War

 Please refer to the policy document for the complete scope of cover and list of exclusions and other terms and conditions under the policy.