LOH
Development last 5 years
How to interact with owners – maker –
yard
Resourses and communication –
surveyor - handler
Surveyors day - Voss 24th October 2013
Asbjørn Asbjørnsen
GARD
LOH
• LOH development the last 5 years
• How to deal with:
− Owner ?
− Maker ?
− Yard ?
− H&M surveyor ?
• Resourses and communication surveyor - handler
LOH development last 5 years
Claim frequency for LoH by year
8.0 %
7.0 %
6.0 %
Frequency
5.0 %
4.0 %
3.0 %
2.0 %
1.0 %
0.0 %
2008
2009
2010
All claims
Major claims
2011
2012
LOH development last 5 years
Claim frequency for LoH by vessel type
16.0 %
14.0 %
12.0 %
Frequency
10.0 %
8.0 %
6.0 %
4.0 %
2.0 %
0.0 %
2008
Bulk Vessel
2009
Container Vessel
2010
General Cargo Vessel
2011
Offshore
2012
Tanker
LOH development last 5 years
100% cost USD per vessel type
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
Tanker
2008
Container Vessel
2009
Bulk Vessel
2010
General Cargo Vessel
2011
Offshore
2012
LOH development last 5 years
How often do a surveyor carry out a LOH
survey?
• How many of you have done a LOH survey?
− Stand alone LOH
− Combined LOH and H&M
Any difference in the above?
LOH
Trigger
• Pursuant to § 16-1, a Loss of Hire claim is triggered by:
− Damage to vessel recoverable as per Plan conditions or other
agreed conditions.
− Certain named events.
• If trigger is based on conditions other than the Plan, these conditions
replaces the Plan’s Chapters 10-12. Chapters 1-9 remains in force.
8
LOH
Calculation of loss of time
• To be calculated in days, hours and minutes.
• Time during which vessel is partially deprived from income to be
converted to corresponding period of total loss of income.
• Open or assessed.
• Normally assessed, which means that the daily amount has been
agreed as fixed between Owners and Underwriters.
• For passenger vessels, variable daily amounts are common. Requires
a variable daily amount clause.
9
LOH
Deductible period
• Shall run from commencement of the loss of time.
• I.e. shall always be placed in the first part of the period lost.
• No apportionment of time for removal or simultaneous repairs during
deductible period (§§ 16-10 & 16-12).
10
LOH
Choice of repair yard
• Assured’s choice.
• Insurers liability limited to tender requiring least time of those fully
allowable under H&M.
• If other H&M conditions than the Plan agreed: Tender requiring least
time plus half of any additional loss of time.
11
LOH
Extra costs to save time
• LoH Insurer liable for extra costs to avert or minimize loss, but only
insofar as the costs are not recoverable from the hull insurer.
• Limitations:
− Insurer not liable for costs in excess of the amount he would have to
pay if measures not taken.
− If time saved for the Assured (i.e. deductible period or in excess of
Loss of Hire coverage) extra costs shall be apportioned.
• LoH insurer liable for extra costs only, not enhanced voyage costs.
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Request for survey
To: Surveyor XXX
Attn:
From: Asbjørn Asbjørnsen
Type of survey: LOH
Insurance cond.: Norw C 14/90/90
Your ref:
Our ref:
Deductible: 14 days
Daily amount USD 20.000
Vessel information:
Vessel name : xxx
Damage information:
Date of casualty:
Description of damage:
Port of inspection:
Ships ETA:
Imo No: xxx
ETD:
•How can we shorten the repair time and
keep everybody involved happy?
LOH
•
•
•
•
•
•
•
Timely initial notification
Communication between different parties
Tendering process
Mitigating measures
Use of available workforce
Documentation from owners
Documentation to owners
15
Timely notification
• What do we mean by timely notification?
− To have enough time to influence tendering process
− To have enough time to arrange surveyor
− Etc.
16
Communication
• Important to have an open and close/frequent communication
between all parties especially in the decision making periode
17
Tendering process
•
•
•
•
•
•
•
Important to get a few offers for repair
Repair periode
Normal working hrs at the yard
Daily penalty
Removal time
Cost of repair
Etc.
18
Mitigating measures
• Temporary repairs in order to postpone permanent repair to
scheduled DD
• Voyage repair
• Number of working shifts at yard
• Hire of additional workers
• Penalty clauses for delay, to reflect loss of earnings
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Use of available workforce
• Hire of additional workers
• Ships crew
• Etc
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Documentation from owners
• Class documents
− Survey statements
• Service reports
• Prelim H&M reports
• Offhire statements
• Etc
21
Documentation to owners
• Reporting from surveyor
− Preliminary report(s)
− Final report after all required documentation is available. Basis for
final settlement.
− Etc.
• All available reporting/information will be sent from insurer to
owner/manager
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What incentive has the owner to speed up ?
• What incentive has the owner to speed up repairs when LOH daily
amount is USD 20.000 and the CP earnings is USD 12.000?
Looking at the freight marked and the owner running out of cash
What can the LOH UW put on the table in order to speed up repairs?
Attendance onboard
• How often should the surveyor be onboard?
• Should we rely only on information received from owners
representative?
Reporting
•
•
•
•
Time line in the report
Owners work
Cargo operations
One or more occurrences
Summing up
• Extremely important to be involved in the repair prosess as early as
possible
• Influence owner to make the right desicion when it comes to chosing
repair alternative
• Contact H&M surveyor as early as possible in order to coordinate
repair process.
• Search marked for spares that can be used, even if only for temporary
repairs if cost efficient
• Most important to be actively involved in the beginning of the repair
process – if desicions made – difficult to change direction of a repair
process.
• Not enough to note down facts – have to be pro active
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Thank you for your attention
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