Mortgagees Additional Perils Insurance

Scope:

The Lender’s interest can be put in jeopardy following a major pollution event. Whilst Protection and Indemnity Insurance (P&I) provides significant cover, the Lender is still exposed to the risk of loss of their collateral should this initial cover prove inadequate.

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Applies to:

Ship finance institutions for vessels trading – in particular to the United States.

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How it works:

Mortgagee’s Additional Perils Pollution Insurance (MAAP) provides the Mortgagee with protection:

• Against the arrest of a mortgaged vessel or the seizure of hull claims proceeds following a P&I Peril where the owner’s insured limit of liability is insufficient.
• For amounts in excess of the current limit of indemnity provided by the International Group of P&I Insurers (currently up to USD 1 Billion per vessel).  
• Where a responsible jurisdiction seizes a vessel as a contribution towards costs or the amount of any judgement.

Cover can be arranged for up to 120% of the outstanding loan on the vessel and a Policy can be taken on a specific basis or, more usually, for a portfolio of financed assets.

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Markets:

Lloyd's, Scandinavia.

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Price Range:

Dependent on spread of risk and trading patterns

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Self Retention:

Nil

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Time to market:

Less than 7 days.