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CHAPTER 8 Loss of charter hire insurance and loss of time

Insurance Law Implications of Delay in Maritime Transport

Page 126


Loss of charter hire insurance and loss of time


8.1 One of the most obvious types of loss that is sought to be excluded by the delay exclusion in s 55(2)(b) is loss of hire (loss of earnings) arising from the loss of use of the vessel which can otherwise be recoverable under loss of hire policies. According to the drafters of the Act, the exclusion rests upon the authority of Shelbourne v Law 1 where loss of earnings due to the detention of an insured vessel during repairs necessitated by a collision was not allowed on the ground that it was remote to the hull policy.2 In this case a ‘river insurance policy’ that was a time policy covered the assured against ‘loss or damage by reason of the collision’ of the barges insured and excluded ‘loss or damage… in respect of the cargo or engagements’ of the barges. There was also a clause whereby the insurer had the option to make good the loss or damage instead of paying for it. Two barges collided with a vessel and the assured suffered loss of earnings during delay arising from detention, as well as physical damage to the barges.

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