Charterers’ Liability Insurance

Azure Risk offers Charterers’ Liability insurance for time and voyage charterers and traders.

We can arrange insurance for any type of chartered vessel ‒ cargo carrying and non-cargo carrying ‒ any type of commodity, any trading area worldwide at fixed premiums. We have no restrictions to size, age, type or territory and offer limits up to USD500 million.

Charterers who also have activities in logistics can easily extend their Charterers’ Liability insurance to cover the multimodal transport liabilities.

When shipping goods, regardless of whether you’re an importer or exporter, it’s essential to understand the differences in the terminology and application of insurance to ensure you get full coverage for the carriage of goods.

Is there a difference between Charterers and NVOCCs? We’re often asked this question, and below, we highlight some differences between Charterers and Non-Vessel Operating Common Carriers (NVOCCs).

Who is a Charterer?

A charterer is a person or organization that charters a ship or aircraft; a freight forwarder, cargo owner, operator, trader, manufacturer or practically anybody involved in the arrangement of a vessel. Chartering does not necessarily mean the charter of a whole vessel; it can mean booking or arranging space on a vessel.

What’s the difference between NVOCCs and Charterers?

Quite simply. A charterer arranges carriage of goods (the hire/charter of, or space on a vessel or craft, rather than booking/reserving) and associated formalities on behalf of a shipper. They are also considered ‘agents’ to shippers.

An NVOCC is a ‘carrier’ that does not own or operate the vessel used to perform the carriage. They enter into a contract of carriage with the cargo shipper and undertake responsibility for the carriage like a shipowner that owns a vessel.

Often described as a ‘virtual carrier’, NVOCCs issues bills of lading, publish tariffs and otherwise conducts themselves as an ocean common carrier, except they will not provide the actual ocean or intermodal service.

Key risks as a Charterer

Liability to the vessel – as a charterer, you may be held liable for any damage to the vessel occurring during the contracted period. Damage to the vessel may include damage caused by stevedores, by the cargo carried, by the supply of defective fuel oil, or by an unsafe port/berth. If the vessel has to be repaired, you may also be liable for compensating any time lost as a result.

Liability to cargo – as a charterer, you may be liable for loss of and or damage to cargo resulting from bad stowage or mishandling, shortages as a result of theft or mismanagement, or non-delivery (for example, loss, arrival at the wrong port).

Other marine liability risks – a charterer can be held liable for death, injury or illness suffered by the crew or third parties, collision, pollution, wreck removal, penalties, stowaways, salvage or fines under the charter party or bill of lading. You are covered against unwarranted liability claims in cases where you are not liable, but a party chooses to pursue a claim independently.

What are the differences in risks for NVOCCs and Charterers?

The risks are like chalk and cheese. NVOCCs are exposed to cargo and equipment losses, but any risk associated with delay is generally limited to the freight.

NVOCCs manage or hold cargo containers, working independently and under their own responsibility. Charterers do not operate or own containers.

It’s important to note that the chartering risks mentioned above are generally excluded under any NVOCC, ForwarderProtect (E&O and Cargo Liability) policy.

Who needs Charterers’ Liability Insurance?

Charterers’ Liability Insurance is a type of marine insurance designed to provide coverage for the liabilities, including those of care, custody, and control (CCC) assumed by a party chartering a vessel when the vessel’s operation remains in control of the vessel’s owner.

NVOCC Liability policies exclude claims arising from demurrage/detention charges of vessels, pollution, loss of life, fines etc. At no time should a charterer rely on their Forwarder Protect (E&O and Cargo Liability) policy as a cheap substitute for Charterers’ Liability Insurance. Any arrangement of a vessel requires Charterers’ Liability Insurance. It may be as simple as involvement in a fixture note, slot charter, booking note, agency agreement or charter party.

Should I take out Charterers’ Liability Insurance?

In short, the answer is yes.

Often risks associated with chartering only become evident when a claim is made, and typically these are never small. For example, a delay on the vessel can easily result in claims ranging from USD50,000 – USD100,000 and upward. Disputes are often technical and require extensive legal assistance, a significant part of cover, and losses are often much greater than under NVOCC liability cases.

Under any NVOCC ForwarderProtect (E&O and Cargo Liability) policy, any of these risks are excluded if the forwarder is involved in any vessel arrangement or craft charter arrangement. It is crucial to have the right insurance policy in place to ensure you are fully covered in the event of a claim.

Charterparty concerns during Covid

Covid-19 related issues arising under shipping contracts are wide-ranging, and we highlight below some of the more immediate ones.

There are many different clauses that might operate in the light of disruptions, all of which will interact with one another to determine who will bear the cost of the delays or other costs/losses. This may also lead to more bespoke clauses being inserted into charter parties to address the allocation of time, costs and other losses arising from problems associated with COVID-19.

  • The cargo that the vessel is going to load is not available because of the outbreak.
  • The vessel cannot enter a port because there is an outbreak.
  • An owner does not want to accept orders to a port where there has been an outbreak.
  • The vessel has been to a port where there was an outbreak and is prevented from entering other ports or is quarantined.
  • The crew onboard have tested positively for COVID-19.


As ever in charter party contracts, all will turn on the specific contract and how certain clauses interact with one another. Clauses that deal specifically with infectious diseases are rare. However, many common clauses found in charters address issues surrounding the Covid-19 in different ways.

For more information

If there is any doubt on how your involvement in a particular shipment impacts any of your policies, our brokers can advise accordingly.

Azure Risk is the official Asia Pacific Broker for World Insurance and partner of the World Insurance Team, proudly serving the members of WCAworld.

For more information about our Charterers’ Liability Insurance, please get in touch with us at

The information contained in this article is not intended to amount to legal or technical advice to any person in general or about a specific case. Every effort is made to ensure our comments are accurate and up to date. However, no responsibility is assumed for their accuracy nor for the views or opinions expressed, nor for any consequence of or reliance on them. You are advised to seek specific legal or technical advice from your usual advisers about any specific matter.

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