Mortgagees Interest Insurance

Scope:

Comprehensive and effective insurance on risks affecting security or collateral is a vital component in any asset financier’s risk assessment and mitigation process. Mortagee’s Interest Insurance (MII) provides a valuable level of additional comfort to the Lender that an insured loss will be indemnified in the event of the original insurance proving unenforceable.

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Applies to:

Ship finance institutions.

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How it works:

MII policies will provide cover in the event that the Borrower’s original insurances do not respond as a result of:

• Non-disclosure or misrepresentation by the Borrower or its agents to the original Insurers.  
• Unseaworthiness of a vessel.
• Breach of a Policy Warranty, whether expressed (for example a trading restriction) or implied (such as the lapse of a vessel classification or non-compliance the ISM).
• Deliberate casting away of the vessel.

The basis of cover can be for an indemnity of up to 120% of any loan value to cater for the necessary costs and expenses the Lender might incur in protecting their interest.

Cover can be arranged on the basis of a single loan or, more usually; on a comprehensive portfolio basis.

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Markets:

Lloyd’s, Scandinavia.

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Price Range:

Dependant on spread of risk

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Self Retention:

Nil

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Time to market:

Less than 7 days.