Loss of Hire
Loss of Hire insurance protect earnings (hire, freight, or revenue) during periods the vessel is out of service due to insured losses, stabilizing cash flow and covering fixed costs (crew, loan repayments, charter commitments).
It compensates a shipowner or charterer for income lost when a vessel becomes unavailable for trading because of physical damage, machinery breakdown, or another insured contingency that results in repair time, it also covers delay due to physical obstruction.
Loss of Hire insurance provides compensation for loss of earnings when a vessel is unable to operate due to physical damage recoverable under the Hull & Machinery policy. After the agreed deductible period has passed, the insurance pays a fixed daily indemnity for the duration of the vessel’s off‑hire period, up to the policy limit. This helps shipowners manage the financial impact of operational interruptions.
The cover can be structured to reflect the vessel’s trading pattern, revenue model, and exposure profile. Options include different deductible periods, daily amounts, and maximum indemnity periods, enabling a tailored and commercially sound solution. Loss of Hire is commonly arranged alongside Hull & Machinery and Increased Value, forming a comprehensive insurance programme that addresses both physical damage and the resulting financial consequences.
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