The “charterer’s liability insurance” is a type of marine insurance. Charterers and Traders in process of their daily activity face significant liabilities from a wide range of marine perils, both contractual and non-contractual. Charterers Liability insurance is a type of coverage which is mainly understood as very complex and probably one of the most overlooked risks. The shipping industry nowadays operates in a world where liability environment becomes more and more legislative.

In order to charter a vessel shipowners and charterers sign a contract which is named Charter Party. A charterer will have an obligation to indemnify a shipowner for third party liability arising out of the breach of Charter Party by charterer or out of issues, which are the charterer’s responsibility. Most vessels are chartered either on a time charter or a voyage charter basis.

Time charter means that vessel is “hired” for a period of time, when voyage charter is a contract for a single shipment. In both cases charterer assumes liabilities towards the shipowner because of damage caused to the ship in the course of cargo-handling or because of damage resulting from an unsafe port or berth. And also, charterer becomes liable similarly to shipowner, with P&I liability to cargo, pollution claims and etc. All charterers require cover for both damage to hull and other P&I liabilities.

Charterers’ Risk policy is normally subject to exact limits of liability, and is typically offered on a fixed-premium basis.