The Club has received a number of enquiries from ship broker Members, either direct or through their insurance brokers, interested in insuring against loss of their commission.
This insurance is particularly important for brokers negotiating and fixing period business since the loss of commission arising out of the total loss of the ship in the early days of long term time charters can be very substantial.
ITIC’s insurance is being offered in two forms:-
(1) loss of income solely as a result of total or constructive total loss and;
(2) loss of income due to any marine peril (including total loss), engine breakdown, strike or war risk affecting the ship or cargo.
Loss of commission income insurance has been offered by the London and other insurance markets for some time. It is analagous to business interruption and loss of profits insurance. Relocation of a business as a result, for example, of a fire or flood can cause a serious loss of income. However, relocation for a shipbroker (which was forced on a number of firms in London following the IRA bombs) may not prove to be as financially serious as the loss of commission on a long-term time charter due to a ship being, for instance, strike bound at Santos.
The advantages of this cover compared to similar products are as follows:-
- individual fixtures need not be declared;
- comprehensive and flexible cover;
- competitive premium;
- uncomplicated policy wording.
In order to celebrate the launch of this new commission income insurance the Club will give a free extension to the policies of existing shipbroker and ship manager Members. This offer is available for a limited period up until the 31st May, 1998. It is also subject to the double insurance clause contained in Rule 13.9 of the 1997 Rules. The free cover period protects commission income/fees in the event of a total or constructive total loss of a ship up to a total of USD 20,000. Members are, however, being offered the opportunity to purchase a wider cover which could provide compensation for any commission lost due to marine perils such as the breakdown of engine equipment, the negligence of the crew and other perils at sea. Higher limits of cover are also available.
If you would like more information please do not hesitate to communicate with the Managers.