This insurance, often referred to as "FD&D" or simply "Defense," provides members with cover for claims handling assistance and for legal costs in relation to a wide range of disputes. Such disputes are outside the scope of P&I or H&M insurance and arise from the building, buying, selling, owning or operation of an entered vessel. For instance, FD&D insurance would cover, among other things, the costs of pursuing or defending claims and disputes that may arise in respect of the following:

  • Charterparties
  • Contracts of Carriage
  • Bills of Lading
  • Contracts of Affreightment
  • Vessel building contracts
  • Vessel sale and purchase contracts
  • Vessel repair contracts
  • Vessel agency, stevedoring, towage and salvage contracts
  • Insurance broking, ship broking and management service contracts
  • Bunker and necessaries contracts
  • Crew contracts
  • Marine insurance contracts

This insurance covers the expense of obtaining legal advice and assistance, including the cost of employing experts as may be necessary to pursue or defend such disputes. As such, it is sometimes also called "Defense Costs" insurance. FD&D insurance does not, however, cover the principal sum in dispute, such as unpaid hire under a charterparty or a claim that is being denied by a hull insurer.

FD&D insurance is referred to as "Class II," and the Class II Rules are the basic contractual terms upon which the members are insured. This insurance is available to both shipowners and charterers. For full details of the cover, please see our Rules.

Importantly, most FD&D matters are handled in-house by Club claims handlers who are experienced in such matters. This ensures high-quality handling from the very beginning, as well as cost-effectiveness. If outside lawyers or experts are required, the Club relies on the strong relationships it has developed with leading shipping service providers around the world. Even then, the Club's claims handlers continue to oversee the matter and monitor all developments to ensure reliable, pro-active, cost-effective service. The goal is to solve the problem quickly and effectively. As with P&I cover, the Club's claims handlers are also available to provide advice on potentially problematic contracts and charterparty clauses before problems develop.