Defence Insurance

This insurance, often known as Freight, Demurrage and Defence cover, indemnifies owners for the legal costs associated with, and legal assistance in relation to, a wide range of disputes arising from the building, buying, selling, owning and operating of an insured vessel.

It is provided under Part Two, Section II of the facility's General Terms and Conditions of cover and, like the P&I insurance, is subject to an overall limit of liability per dispute, as well as to a deductible which usually entails some contribution from the insured to the cost of prosecuting or defending a claim, but subject, in the normal way, to an overall cap.

It should be noted that Defence cover does not provide cover against any principal sum in dispute e.g. unpaid hire or dead freight under a charterparty, but it does cover the cost of employing lawyers and other experts in the prosecution, or the defense of, such matters.