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ACQ 2016-1

Introduction to Shipowners’ Liability Cover

BACKGROUND

SOL Cover or Shipowners’ Liability to Cargo Cover is a common term used to describe the insurance arranged to cover a carrier’s liabilities arising from a breach of contract of carriage, where such a breach deprives the carrier of the right to rely on defences or rights of limitation which would otherwise have been available to him.

There are numerous occasions when a carrier has to deviate from the normal route or the agreed B/L for various reasons. In these situations, there is exposure to cargo liability. Although such deviations to the B/L can be covered on the specific occasions by Liability Insurers, SOL cover provides for liberties to deviate under the policy period.

SOL cover includes a number of specific liabilities that are mainly excluded from the Liability Cover. A typical SOL example is geographical deviation or departure from the contractually agreed voyage; liability for loss of and/or damage to cargo arising out of such a deviation falls outside the scope of standard Liability Cover.

WHAT IS COVERED?

  • Geographical deviation of the vessel from the contractual voyage
  • Cargo being carried on vessels other than that named in the bill of lading;
  • Cargo being loaded on the vessel after a casualty prior to dry-docking or repair
  • Cargo being carried beyond its destination and returned by the same vessel
  • Cargo being shipped on board vessels other than those of the carrier prior to the delivery of such cargo to the carrier's vessels for the carriage thereof and similarly after such carriage
  • Cargo, including mail and/or merchandise, being stowed in spaces not certified for the carriage of cargo
  • Cargo remaining on board the vessel during dry-docking
  • Cargo being transferred to and/or from and/or being carried on board feeder vessels
  • Cargo being transferred from one point to another by water and/or rail and/or air and/or motor trucks and/or other conveyances
  • Cargo being transhipped at any port or ports, place or places instead of being carried on board the original vessel to the destination stated in the bill of lading
  • Cargo being discharged from and reloaded upon the same vessel and/or cargo being shiftedwithin the confines of the vessel for any reason whatsoever at any port or place of shipment or destination and/or at any port or place between the point of shipment and the point of destination
  • Cargo being discharged onto lighters at any port or place prior to the surrender of bills of lading by the consignees or their representatives
  • Cargo being lightered to other than the scheduled loading or unloading berth
  • Cargo being stored on lighters before loading or after discharging from vessels.
  • Cargo being accepted for shipment or delivery beyond the normal P&I rule of 14 days prior or after the transport.
  • Cargo being temporarily stored whilst the vessel is undergoing repairs.

WHO CAN BE COVERED?

In general, carriers with a full Liability entry (including owner’s P&I and Charterers Liability) can apply for SOL insurance.