Sustainability, transparency and environmental issues have become increasingly important factors to businesses across the globe, even more so following the outbreak of COVID-19. In addition to legal/regulatory exposures there are also reputational risks both within the industry and its finance institutions, and also to the press and the public at large. It is quite telling for the world we live in to see how industry participants are now calling for more urgent actions than their industry associations and indeed regulators currently require. Sustainable Recycling insurance enables shipowners to make the environmentally considerate choice when it comes to recycling a total loss without having to worry about the financial cost of doing so.
Scope:
The insurance – which is subsidiary to ordinary P&I cover - is triggered by a total loss and covers the assured’s added costs for recycling a wreck at an EU-verified yard. Transportation and recycling costs are included, as is a reduction in the proceeds of sale. Cover limit is up to USD 5 million.
Applies to:
Shipowners wishing to make sure that the recycling of a ship – which is a total loss under the insurance policy – is carried out in compliance with the Hong Kong Convention, even if these additional costs exceed the cover extended by his removal of wreck insurance. Importantly the insurance is also available to shipowners where the vessel’s flag state is not a signatory to the Hong Kong Convention.
How it works:
Sustainability, transparency and environmental issues have become increasingly important factors to businesses across the globe, even more so following the outbreak of COVID-19. In addition to legal/regulatory exposures there are also reputational risks both within the industry and its finance institutions, and also to the press and the public at large. It is quite telling for the world we live in to see how industry participants are now calling for more urgent actions than their industry associations and indeed regulators currently require. Sustainable Recycling insurance enables shipowners to make the environmentally considerate choice when it comes to recycling a total loss without having to worry about the financial cost of doing so.
Markets:
Norway.
Price Range:
0.1 – 0.15% p.a. of insured amount.
Self Retention:
None.
Time to market:
14-30 days.
