Builders’ Risk Insurance
This type of insurance covers whilst vessel is under construction. During that period, it is exposed to risks such as fire, tidal wave, capsize or failure in launch. It is also exposed to collision, and sinking on a trial trip. The builder’s risk insurance effected by shipyards provides cover against all such risks. The insured value is the contract price or the estimated completed value of the vessel if there is no contract price. The period of insurance should be from the time of inception of the construction to the time of delivery. Hence, the period can well exceed 12 months.
