RIOTOUSLY USEFUL COVER
- Date: 01/11/2005
There are occasions when events outside a ship broker’s control can scupper the hard work which has secured a fixture.
A tanker broker fixed a ship on a voyage basis to lift two million barrels of crude oil in Nigeria for discharge on the west coast of India. Unfortunately, before the ship delivered, riots and civil unrest erupted in the Delta area, and militants threatened to blow up oil facilities. The ship owner declared the charter frustrated on the basis that the port of loading was not safe. The freight was almost US$3,000,000, and the broker’s commission of 1.25% was US$37,500. Fortunately, the broker had purchased ITIC’s optional loss of commission cover on an ‘all risk’ basis.
Once it had been established that the broker had not arranged a substitute fixture for the ship, the Club paid the broker the commission which he would have received, less the deductible.