LOSS OF HIRE
LOSS OF HIRE (hereinafter as LOH) insurance is a kind of insurance generally effected by the shipowners be sides the hull insurance and the freight insurance. Such kind of insurance has been playing an important role in distracting risks of loss of vessels' earning capacity, in preventing their fund flow drying up because of casualties and in maintaining a stable environment for operation.
In the event of a damage to the ship and its consequential idle time without generating any income, certain costs such as crew wages and repayment of loans continue to fall due.
For this scenario it is advisable to buy Loss of Hire insurance, in order to cope with the requirements of money lenders, ensure planning dependability and hedge losses. Depending on the required amount and duration of the daily compensation, the payment of a fixed and agreed daily amount may be paid to the ship owner, subject to deductibles. The usual deductible period is 14 days and the payment period may be between 60 and 180 days.
The deductible may be limited to only a few days when buying additional deductible insurance.
