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Shipping
lines worldwide face the prospects
of forking out to buy extra
insurance cover for war risks now
that the International Group of
Protection and Indemnity Clubs has
harmonised its guidelines.
The
move is expected to hit mainly
shipowners in the Far East who will
have to go to commercial markets at
a time when prices are soaring.
(Most of the European owners are
already members of war risk
facilities that give adequate
protection.)
Industry
sources said the decision will be
particularly hard on owners ofg
small fleets which lack the bulk
purchasing power and influence of
the large companies.
The
move represents yet another
insurance burden for owners already
reeling from high hull and machinery
cover costs, increased P&I
premiums and depressed freight
rates.
The
P&I group, whose members cover
some 90 per cent of the world fleet,
has warned that owners should
maintain war risk P&I cover up
to a ship's “proper value”.
This
is being set at a maximum of US$100m
per ship, even for the most
expensive units including
cruiseships and gas carriers.
One
of the first clubs to issue a
circular to its members on the
change, the UK Club, said it was
always clear that its special war
risk cover is not intended as a
substitute for market cover, but is
there as a safety net.
The
UK Club is imposing the mandatory
level of $100m per ship on all
members to ensure its special war
risk cover remains available on an
equal basis.
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