LOSS OF HIRE INSURANCE

The insurance cover loss due to the ship being wholly or partially deprived of income as a consequence of damage to the ship which which is recoverable under the condition of clause. 

The damage that prevents the vessel from sailing regularly has to be recoverable under the Hull and Machinery policy in order to be claimed under a Loss of Hire policy. The insurance does not cover loss of time resulting from a casualty which gives the Assured the right to compensation for total loss. The advantages of the Loss of Hire insurance are very often underestimated as are the financial repercussions, which could occur in consequence of an Hull & Machinery claim. Nearly every Hull & Machinery damages also causes unemployment for the vessel during the time of the repair. During this time the vessel can be "off hire" with no earnings being possible in this time. Nevertheless the daily costs have to be paid and beyond this, the actual loss of time for the vessel can be higher than the time actually needed for the repair. This occurs when the delivery of replacement parts takes a long time or the vessel has to be moved to a far-away/distant shipyard.

The insurance also cover loss due to the ship being wholly or partially deprived of income:

• because it has started

• because it is prevented by physical obstruction ( other than ice) from leaving a port or a similar area, or

• as a consequence of measures taken to salvage or remove damaged cargo or

• as a consequence of an event that is allowed in general average pursuant to the 1994 York Antwerp rules.