The insurance indemnifies the operator up to the Sum Insured in respect of the consequences of non-delivery/abandonment/total loss including subcontractors. The Sum Insured is to be justified at time of cancellation or frustration of the Insured Contract(s) (the MOA(s) or Conversion/Retrofitting contract(s) based on the average of three independent qualified shipbrokers’ opinions of value at date of delivery anticipated under respective contracts. In this event, one shipbroker is to be appointed by the Assured, one by Underwriters and the final one to be agreed by the first two.
The Sum Insured is amended to “fixed and agreed” in the event that Sum Insured should become substantiated through pre-delivery sale of vessel or other justification and agreement with Underwriters.
In the event that an operator acquires the right to cancel any contract insured but elects not to do so, amounts up to the Sum Insured may be recoverable as sue and labour expenses on a daily basis in accordance with any indemnity agreed under a delay in delivery, or otherwise. Payment of such amounts shall simultaneously reduce the AIRCOR Sum Insured available by the equivalent amount.
Cover can be included to include insolvency of shipyard, as well as delay in delivery insurance. These elements are not included in the price range.
Scope:
When an operator's shipbuilding contract is legally cancelled by shipbuilder in accordance with the terms of the contract, the refund guarantee is called upon and the refund made. However, site team and project expenses, currency fluctuations and any appreciation of the contract value will not be covered. This is what an AICOR protects against.
Applies to:
Operators with transportation or production units under constructions or rebuilding, where there has been an appreciation of asset value over and above the contract value, or those who simply want to recover interest, currency or project expenses in the case of a contract cancellation.
How it works:
The insurance indemnifies the operator up to the Sum Insured in respect of the consequences of non-delivery/abandonment/total loss including subcontractors. The Sum Insured is to be justified at time of cancellation or frustration of the Insured Contract(s) (the MOA(s) or Conversion/Retrofitting contract(s) based on the average of three independent qualified shipbrokers’ opinions of value at date of delivery anticipated under respective contracts. In this event, one shipbroker is to be appointed by the Assured, one by Underwriters and the final one to be agreed by the first two.
The Sum Insured is amended to “fixed and agreed” in the event that Sum Insured should become substantiated through pre-delivery sale of vessel or other justification and agreement with Underwriters.
In the event that an operator acquires the right to cancel any contract insured but elects not to do so, amounts up to the Sum Insured may be recoverable as sue and labour expenses on a daily basis in accordance with any indemnity agreed under a delay in delivery, or otherwise. Payment of such amounts shall simultaneously reduce the AIRCOR Sum Insured available by the equivalent amount.
Cover can be included to include insolvency of shipyard, as well as delay in delivery insurance. These elements are not included in the price range.
Markets:
Lloyd’s.
Price Range:
0.5% for physical damage (around 2.5% for insolvency).
Self Retention:
Normally 5-10% co-insurance.
Time to market:
Minimum 60 days.
