Marine-related builder's risk insurance is a type of policy that
helps to provide financial protection to businesses that are
constructing ships. The policies cover a wide range of different events
that could derail construction or prevent the delivery of the finished
vessel. Different policies have different scopes, depending on the
insurer. Businesses building a new vessel want to have this type of
marine insurance for a number of reasons.
Mitigate Construction Risks
One
reason to hold builder's risk marine insurance is that it helps to
cover unexpected damage sustained during actual construction of a ship.
This includes problems such as defective building materials, contractor
injuries and destroyed equipment. It also sometimes covers any defects
in the construction or design that stop the vessel from operating
properly or meeting regulations before delivery. The coverage can pay to
replace lost assets, take care of contractors and purchase new
materials so that construction continues forward as quickly as possible.
Unexpected Events
Any
number of outside events could have a negative impact on the
construction of vessels. An issue that is always a concern is a
collision with another ship, a piece of equipment or even a mobile
structure on the water. Shipyards are busy places that have large
amounts of traffic moving through the area every day. A builder's risk
marine insurance policy protects a vessel and the workers from this type
of damage. Businesses will not have to worry about unexpected events
outside the control of the company.
Protection During Trials
Sea
trials are a necessary part of building any marine vessel. Sea trials
ensure that there are no problems with the construction and that the
ship operates according to specifications. Trials also place the ship at
risk on open waters. Independent vessels in the area, navigation issues
or other problems could all damage or destroy a seaworthy ship that is
just days or weeks away from final delivery. Marine insurance that
covers builder's risk will provide financial protections for ships that
are undergoing sea trials.
Guarantee Investments
Another
main reason to have builder's risk marine insurance is to guarantee
investments. Construction of a ship takes time, planning and resources.
An uninsured project could encounter any number of problems that make
continuing more expensive than originally planned or impossible.
Builder's risk insurance guarantees that certain issues won't result in
an incomplete project or a ship that takes far longer to build than
originally planned. With this type of marine insurance, businesses can
plan for the future delivery of the new ship without worries.
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