Alandia Marine offers ship-owners complete insurance solutions in order to safeguard their economic undertakings. The vessel is the ship-owner’s investment in a production tool and often represents large values.
Loss of the vessel or damage to the vessel means that the ship-owner will potentially lead to the loss of its production tool for a shorter or longer period. The repair costs and/or loss of income can be of such magnitude that they cannot possibly be considered in an ordinary production and maintenance budget. Without satisfactory insurance cover a loss occurred can be devastating for the business itself.
Hull & Machinery Insurance
The vessel's hull & machinery insurance is the vessel's primary insurance against physical damage to the vessel. The vessel is insured to its full value, whereby the insurance, depending on the extent of protection chosen, compensates total loss of the vessel, salvage, partial damages to one's own vessel, collision liability, ice damages (assumes ice class), engine-damage, and the vessel's contribution to general average.
Increased value insurance is a cover against total loss of the insured vessel. A total loss of the vessel can put the ship-owner in a situation, where the hull value insured is insufficient to cover the costs for replacing the lost vessel. The increased value insurance makes it possible for the ship owner to replace the vessel and moderate the economic effects of a total loss. By taking out freight interest insurance the shipping company can safeguard itself against a long-term future loss of income, and in that way get cover for loss of income, which is excluded in the loss of hire insurance. The insured value of each insurance is normally a maximum of 25% of the hull & machinery insurance value.
Loss of Hire Insurance
Through a loss of hire insurance the ship-owner protects the potential loss of income when a casualty occurs and vessel is off-hire. Compensation is subject there is recoverable damage on the Hull & Machinery insurance but would exempt a total loss situation. The extent of the insurance and the insurance premium are based upon an agreed daily indemnity during a certain period per occasion and year. The daily indemnity should correspond to the ship owners’ actual loss of income if the vessel is off-hire for an extended period of time.
Hull & Machinery and Increased Value insurance do not include cases of damage as a consequence of war like hostilities, civil unrest, sabotage, terrorism, arrest, seizure etc. These risks are covered by war risks insurance, which is tailor-made and adapted to the vessel's other insurances. War risks insurance could make it possible for a vessel to operate in waters hit by unrest and normally excluded from insurance cover at an additional premium and to specially agreed terms
A mortgagee that is noted as co-insured in the vessel's hull & machinery insurance can cover its interest further through mortgagee interest insurance. This insurance protects the mortgagee in cases where the ship-owners' insurances do not compensate for damages due to negligence or breach of terms of a policy. Such a situation could e.g. be breach against the restricted areas as stated in the insurance policy. The insured amount is normally the mortgage amount, which, however, must not exceed the value of the vessel.