We cover a great number of risks where the Insured bareboat charters the vessel from the vessel owner. Typically, most carriers require on and off hire surveys, but they make sense even when not required.
A bareboat charter, sometimes referred to as a demise charter, is a type of chartering or hiring of any kind of vessel, with no crew. It is up to the company taking possession of the vessel to operate and care for the vessel. It can be compared to renting a car from a rental agency, such as Hertz or Avis. It is up to the party in possession to properly operate and ensure the property being given to them is in good condition.
An on-hire survey does not need to be
all that complicated. It can be as simple as walking around the vessel with the
owner at the time of hand off, completing
a checklist, and taking pictures
of existing damage. A
professional surveyor might be useful and helpful as the vessel value or complexity increases.
It
is also, very useful to have an off-hire survey when the charter is complete to
document the condition the vessel is returned.
Having an on-hire and off-hire survey can simply show the difference in
the condition that occurred for the duration of the charter. With this, any disputes should be easily
remedied as there will be an abundance of proof to justify or disprove any
arguments in changes in condition.
The
survey becomes most important when considering deductibles. When there are six separate “dings” on the
surface of a barge, was that six separate occurrences, therefore six different
deductibles? Or was it a single occurrence and just a single deductible? Having a clear plan when the vessel is hired
is a great way to ease the issues when the claim comes.
Whether
it is required or optional, it is always in the best interest of the Insured to
have a clear document of the condition of the vessel at time of hire, so when
the vessel is returned in the same condition, everyone is happy.
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Author
Mark Greenway
Director of London Market and Special Placement
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