What does Freight, Demurrage and Defence Insurance Cover?

FD&D covers the costs involved for necessary legal assistance in charterparty and other contractual disputes which are directly connected with the operation of the vessel. The cover entitles clients to a comprehensive legal consultancy service.

Risks Covered

Unless otherwise agreed in the policy, the Insurer will afford cover, on the basis of the following provisions, for maritime law disputes arising in connection with the seagoing vessel of the Assured named in the policy as follows:

- Disputes under charter parties, bills of lading or other contracts of affreightment as well as contracts for hire of ships or ship leasing contracts. 
- Disputes relating to contracts of passage.
- Disputes relating to the supply of ships with bunker, lube oil, provisions or equipment.
- Disputes relating to General Average.
- Disputes relating to Salvage.
- Disputes under towage and tug assistance contracts.
- Disputes under repair contracts and agreements with shipbuilding yards
- Disputes under insurance contracts in connection with the vessel. 
- Disputes under contracts with ship's agents, ship's brokers, stevedores and other port operators. 
- Disputes with and representation at customs, port and other public authorities. 
- Disputes under contracts relating to the operation, management or crewing of the vessel. 
- Disputes under employment contracts with masters or other crew members. 

By special agreement to be contained in the policy and in consideration for additional premium, the insurance cover can be extended to: 

- Disputes relating to shipbuilding contracts, ship sale and purchase contracts, ship finance contracts or ships mortgage / hypothecation.
- Disputes relating to shipbuilding contracts, ship sale and purchase contracts, ship finance contracts or ships mortgage / hypothecation. 
- Criminal and administrative and/or regulatory summary offence proceedings against the Assured relating to the vessel named in the policy unless the Assured is accused of intentional misconduct.

Unless otherwise agreed, it is a precondition for such extended cover that the insurance contract exists at the time the contracts under which the disputes arise are concluded or proceedings have been started against the Assured or that the contract of insurance is concluded at least at the same time of any such contracts or proceedings.

Exclusions

Excluded from the insurance are disputes relating to:

- Claims involving amounts of less than US$ 7,500 or the equivalent in any other currency, unless the Insurer specifically confirms cover;
- Unless otherwise agreed, claims in respect of which the Assured has obtained cover under a Hull and Machinery insurance policy on the vessel or could have obtained cover under a Hull and Machinery insurance in accordance with Lloyd´s Marine Policy MAR Form 1/1/82 in connection with the Institute Time Clauses or under any other Hull and Machinery insurance with equivalent terms and conditions;
- Unless otherwise agreed, claims in respect of which the Assured is covered under the P & I insurance of the vessel; 
- Claims arising in connection with war, warlike incidents or as a consequence thereof;
- Tax or other public charges;
- Claims in connection with radioactive substances; 
- Claims in connection with an illegal employment of the vessel; 
- Claims in connection with the carriage of contraband or the employment of the vessel as a blockade runner; 
- Claims in respect of which the Assured could have obtained reimbursement of costs under any other insurance contract in the event that the Assured had not concluded this insurance contract. This also applies where such other contract of insurance includes a subsidiary clause.