When it comes to managing the complex world of shipping, legal disputes are almost inevitable. That’s where Freight, Demurrage & Defence (FD&D) insurance steps in. This specialised cover protects shipowners and operators against the legal costs and associated expenses of claims and disputes that aren’t already covered by Protection & Indemnity (P&I) or other insurance policies.
What Is FD&D?
FD&D is a separate class of cover with its own rules. It’s not usually available as a stand-alone policy and is designed to complement your existing marine insurance. Despite its name, FD&D isn’t limited to freight and demurrage issues, it also covers costs when you need to pursue claims, not just defend them.
Why is this important? Because disputes often affect a ship’s earnings and cash flow. FD&D provides vital support to keep your operations running smoothly.
What Does FD&D Cover?
FD&D typically covers legal costs related to:
- Unpaid freight, hire, and demurrage
- Cancellation or breach of charterparties
- Fuel supply and equipment disputes
- Issues with port authorities, customs, or terminal operators
- Amounts due to or from other marine insurers
- Detention, delay, and loss of use of a vessel
Most P&I Clubs have in-house FD&D teams staffed by legally qualified claims handlers. They assist members before and after appointing external lawyers. In many cases, disputes are resolved without outside solicitors, keeping costs down.
Tailored Protection
FD&D cover can be customised to meet your specific needs. For example:
- Sale & Purchase: FD&D can be arranged from the signing of a Memorandum of Agreement (MOA) to protect buyers and sellers against legal risks during vessel transactions.
- Newbuildings: Subject to special terms, cover can include pre-delivery risks for new construction projects.
Why FD&D Is Essential
Shipping is a high-stakes business, and legal disputes can quickly escalate into costly challenges. FD&D insurance gives you peace of mind, ensuring you have expert support and financial protection when you need it most.
Specialist Marine Insurance For Your Shipping Business
Everard Insurance Brokers are the specialist marine trading division of accredited Lloyd’s brokers James Hallam Limited. We can help you ensure you have the insurance you need to cover your shipping business.
Find out more about our dedicated marine insurance services.