Product · Loss of Hire
Loss of Hire Cover for Vessel Downtime
Daily indemnity for time lost following an insured physical damage event, with a configurable waiting period, daily insured amount and maximum compensation period.
What it covers
- ◆Daily indemnity for time lost while vessel is unable to earn
- ◆Repair-period downtime following a covered hull event
- ◆Configurable waiting period (deductible in days)
- ◆Maximum compensation period per event and per policy year
Who it is for
- ◆Shipowners exposed to charter income loss during repairs
- ◆Operators with thin operating margins on long-term charters
- ◆Banks requiring debt-service protection on financed vessels
Pricing
How Quantica prices it
LoH is dependent on insured physical damage. Pricing combines the probability of a covered hull claim, the expected payable days after waiting period, and the daily sum insured.
The technical premium then loads expenses, reinsurance, capital and margin, consistent with the hull engine.
Payable Days =
min( max(0, Repair Days − Waiting Days), Policy Limit Days )
Expected Loss =
P(Covered Hull Claim)
× Expected Payable Days
× Daily Sum Insured
Underwriting data required
- • Hull cover details and deductibles
- • Charter type and earnings basis
- • Historic off-hire data
- • Drydock and maintenance schedule
Claims examples
- • Off-hire following engine-room fire repair
- • Extended repair period after grounding damage
- • Drydock overrun due to spare-part lead time
Risk controls
- • Waiting period (typically 14–30 days)
- • Maximum indemnity period per event
- • Aggregate cap per policy year
- • Strict dependency on insured hull peril
Reinsurance
Reinsurance considerations
LoH is normally reinsured alongside the hull programme. Quantica models gross and ceded payable days, tracks accumulated downtime exposure across the fleet and produces ceded reserving outputs consistent with the hull line.
This product description is illustrative. Cover, exclusions and policy terms depend on the final wording and applicable regulatory authorisations. No insurance is offered until appropriate authorisations are in place.