Marine insurance paper for brokers

Retention of Vessel Records on Change of Ownership or Management is an important issue affecting marine insurance because without continuity of past information, there are many increased risks.

There is an increasing tendency for former owners or managers to remove or not make available vessel records following change of ownership or management. This leaves the new owner, incoming manager and /or master and crew with very little information on the vessel and more especially the condition of its machinery.

DUAL Marine has produced ‘Technical Papers’ to help brokers involved in marine insurance build on the existing knowledge and understanding of certain specific marine matters which have implications for the insurance covers they arrange for their clients involved in different aspects of the maritime industry.

The aim is for brokers to bring the issues raised in the paper to the attention of their marine related clients with whom the technical comments made will resonate. Brokers involved in arranging Marine Hull and Machinery insurance on behalf of their ship owning clients should be mindful to impress on them the need to ensure that they closely supervise and document the management and maintenance of their vessels machinery. Failure to implement such action may limit their broker’s ability to secure machinery cover on their vessels or significantly limit the extent of this cover.

In excess of 40% of marine hull claims are attributed to incidents involving machinery breakdown or damage. Aside from the costs associated with repairing damaged machinery invariably these claims involve considerable periods where the vessels involved are unable to perform their normal services; with subsequent substantial loss of earnings to their owners.

Many of these machinery claims and the resulting damage caused could have either been avoided or significantly mitigated if owners had paid closer attention to the past servicing of the machinery.
This is particularly relevant and important when their client’s purchase an existing vessel and the former owners fail to provide records detailing the past machinery maintenance history and other relevant Class and/or statutory survey documentation.

You can read the full paper here.