In the event a shipyard does not complete the unit in accordance with the building contract triggered by e.g. the occurrence of an insured peril under the Builders Risk Insurance, a Force Majeure or Insolvency event, this insurance pays an agreed lump sum amount to cover loss of contract and increased costs of completion or building elsewhere. Often purchased together with a Delay in Delivery Insurance.
Scope:
Shipyard fails to deliver newbuilding or converted unit in accordance with contract.
Applies to:
Operator with newbuilding under construction or conversion, in an increasing market or where advantageous charter has been secured. The Builders Risk and refund guarantee will only refund actual contract cost and building contract provides only limited compensation for delays.
How it works:
In the event a shipyard does not complete the unit in accordance with the building contract triggered by e.g. the occurrence of an insured peril under the Builders Risk Insurance, a Force Majeure or Insolvency event, this insurance pays an agreed lump sum amount to cover loss of contract and increased costs of completion or building elsewhere. Often purchased together with a Delay in Delivery Insurance.
Markets:
Lloyd’s, Norway.
Price Range:
0.15 - 0.5% not including insolvency.
Self Retention:
Nil.
Time to market:
Up to 60 days depending on scope. Less than 30 days if physical damage only.
