In the event of default triggering cancellation as defined in the building contract – upheld by a competent court or arbitration where refund guarantor subsequently does not respond – this insurance pays after an agreed waiting period (e.g. 180 days).
The cover can be extended to include credit and political risks (not included in price range).
Scope:
Covers the inability to collect stage payments from yard or guaranteeing bank following yard insolvency or inability to complete constructions.
Applies to:
Buyers of vessels where large instalments are paid in ahead of delivery and where there are questions related to the Refund Guarantor's ability to pay, aggregation of exposures on the hands of the Refund Guarantor, or an intolerable risk to your balance sheet.
How it works:
In the event of default triggering cancellation as defined in the building contract – upheld by a competent court or arbitration where refund guarantor subsequently does not respond – this insurance pays after an agreed waiting period (e.g. 180 days).
The cover can be extended to include credit and political risks (not included in price range).
Markets:
Lloyd’s.
Price Range:
1 - 2.5%
Self Retention:
Normally 5-10% co-insurance.
Time to market:
Minimum 60 days.
