Hull Claims – Marine Insurance

What is a Hull Claim?

Hull claims are available for the ships. During an unexpected peril ship also can get damaged or even loss. Hull claims arise when claiming for the occurrence of below events to a ship under an insured peril. The hull claims procedure is very similar to the cargo claims. But, don’t forget the value and the claim of the hull could be far expensive than the cargo claim. We will identifythe Hull Claims – Marine Insurance 

01. Total Loss -Hull Claim

We can speak on the actual loss and the constructive loss under the total loss happens to the subject matter.

1.1 Actual Total Loss

Actual total losses are when the ship destroy or very seriously damage or unable to possess the ship again. For example, the ship sinks due to water leakage or break into pieces due to hogging and sagging. In such a scenario, the shipowner will become so depressed being unable to use the ship again. So, we call that a total loss. When a total loss happens, the shipowner can claim it from the underwriter under the hull policy.

1.2 Constructive Total Loss

Constructive loss arises when the actual loss of the ship is unavoidable, or the recovery of the ship is very unlikely or the cost of repairing and restoring the subject matter to the same stage as at the time of insured exceed the insured value.

Same as in cargo claim notice of abandonment should send to the insurer/insurers immediately after identifying the loss as a constructive total loss. As ship constructions is a huge investment it is very important to keep the underwriter informed as per their guidelines to claim the loss.

02. Partial Loss

Any loss incurs other than to the total loss consider as a partial loss. Partial loss can study by including below losses.

2.1 Particular Average

The cause of the damage or the loss to the subject matter is due to a fortuity or an unexpected peril. The fortuity must not be an ordinary event such as wind or wave. Damage or the loss must be due to an extraordinary peril. Events under particular average include collisions, groundings, stranding etc. of the subject matter.

2.2 General Average

There is a general average act to govern when there are extraordinary sacrifices are made intentionally which damage or cause losses to the subject matter. It is important to note sacrifices under the general average should be reasonable and should not be the acts out of carelessness.  Further, the sacrifices should have done purely to prevent or minimise a calamity and protection of the adventure.

2.3 Salvage Charges

Also known as the general average expenditure. Same as in cargo claim, the remuneration for ship or cargo or both ship and cargo salvation is the salvage charges. The salvation charge may include the towing of the ship from the offshore, any legal costs involved, wreck collection and charges for salvors.

2.4 Charges Incurred to Avert or Minimize a Loss

Also known as sue and labour charges. It is easy for you to understand the type of loss by looking at the name. Any cost incurs to minimise the loss/damage consider under the charges incurred to avert the loss. The claimer or the shipowner has the right to claim such costs despite the claim for the subject matter.  

2.5 Third Party Liability Arising from Collision with Another Vessel

There are few ways a ship get collied. During a collision, a vessel owner obliged for the damages/losses incurred on a third party. The third-party can be another vessel or any other property. These claims arise when shipowner pay for the liabilities of the third parties.  In general, liabilities on third parties are only insured up to ¾ of the damage. Balance ¼ lies as a responsibility of the shipowner. The shipowner can cover the ¼ of claim also under the insurance by entering the ship into a “protection and indemnity association”.