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Law360, London (April 8, 2020, 7:53 PM BST ) A U.K. marine insurer warned ship owners on Wednesday they will not be able to claim for lost profit if their vessel is delayed due to a quarantine order, as the maritime industry begins a slow recovery from coronavirus-related disruption.
UK P&I Club, the third biggest protection and indemnity club by insured tonnage, published a list of scenarios where customers could and could not claim on their policies.
The shipping industry has been battered since early February by a wave of cancellations, crew shortages and quarantine-related delays at ports.
There have been signs of improvement in recent weeks though, with the London-based Baltic Index, which collates global shipping rates, saying that the largest "capesize" dry bulk market had "come off life support" in early April.
The Club, which was established in 1869, said it had been overwhelmed by a "significant number of enquiries" over the scope of cover in recent weeks and had decided to publish a detailed FAQ on its site.
"In this unprecedented and extremely challenging time, we are committed to providing guidance to our members on the impact of COVID-19 and the operation of Club cover," Andrew Taylor, chief executive of UK P&I Club, said.
The Club said it would generally only provide cover for expenses if a vessel was quarantined due to an actual outbreak of the novel coronavirus onboard the ship.
Insurance would be unlikely to pay out because a vessel was quarantined as part of a routine safety measure introduced by ports, the FAQ said. Many ports imposed 14-day restrictions on vessels arriving from China in early February.
"If a ship is delayed off a port because of a suspicion of infection, or as a result of a routine restriction on ships arriving from certain ports, then cover is not triggered," the Club said.
It also said it would be unlikely to "indemnify an owner for loss of profit or other commercial losses," if a quarantine order meant the vessel was unable to meet a laycan date for its next fixture, when a ship owner must notify a charterer that it is ready to start loading goods.
However, the Club said it would meet its liabilities if crew members fell ill or died from a confirmed case of COVID-19.
--Editing by Nicole Bleier.
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