The cruise operator offered all passengers a 75% reimbursement, 25% credit for a future P&O cruise and AUD100 onboard credit as a gesture of goodwill.

There exists a number of laws and directives regarding cruise passenger compensation, in addition to the terms and conditions of individual operators.  However, there is no guarantee that in the case of communicable diseases, cruise operators’ P&I insurance will step in to cover the cost of compensation and it is usually left to the discretion of the Club.

Trade Disruption Insurance (TDI) for the cruise and passenger vessel industry does exist and responds in four ways:

1.       Loss of Revenue

2.       Additional costs and expenses – to cover the costs (such as substitute charter hire costs) incurred to get passengers to their intended destination following a casualty, for example

3.       Contractual penalties – to pay compensation to passengers where tickets are sold subject to the operator’s Fair Trading Charter or within the EU Directive on Passenger Compensation.

4.       Extraordinary costs – for example, to cover the costs of a new marketing campaign to rebuild customer confidence following a breakdown or illness

There is a significant number of perils covered by TDI, including fire or explosion on land, extraordinary weather, earthquake, heave, landslip, subsidence or volcanic eruption, contact with aircraft, helicopters of similar objects, emergency port closures, ITC Hull and Machinery perils (these can be substituted with Norwegian, Finnish or American hull plans), abnormal obstruction of a berth, master’s refusal, acts of piracy, rescuing of refugees, the imposition of travel restrictions, border closure, expropriation / confiscation, arrest or restraint under quarantine regulations, infectious diseases or poisoning on board, illness, death or injury, discovery of stowaways, detention following actual or alleged pollution, drug delay, oil or chemical pollution, accident in transit, and blocking and trapping.

For further information about TDI for the cruise and passenger vessel industry please contact FP Marine Risks.

Minimising the Risks for Charterers
Avoiding the area entirely will limit a vessel’s exposure to the risk of piracy although, as in the high profile case of the Sirius Star, it is not always successful.  Sirius Star had chosen to sail via the Cape of Good Hope, but was still captured by Somali pirates over 450 nautical miles off the coast of Kenya.

Moreover, significant deviations are a costly and time consuming alternative for Charterers, who pay hire costs for the additional time taken to sail past the Cape.

In the event of a hijacking, the vessel could remain on hire for the duration of the detention with any off-hire likely to lead to a dispute.  The average period for vessels to be detained is six to seven weeks, so the Charterers’ exposure to hire charges whilst the vessel is detained is significant.

Charterer’s Piracy Trade Disruption Insurance ensures that if a vessel is captured and the Charterer remains liable for the hire, the Charterer is covered for that payment whilst the vessel is seized.

The Cover
Importantly, the cover is available on both a single breach and annual basis.  This allows Charterers to declare vessels for the specific period, whilst transiting or calling at ports in high risk areas.

The premium is based upon the limit of liability required, the number of calls or transits and voyages contemplated and is fully supported by ‘A’ rated London insurers with a proven track record in specialist marine insurance.

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The above information is intended solely as a summary of the cover – for full details regarding the conditions of cover, exclusions and definitions, please email or telephone your usual FP Marine Risks contact or call the Hong Kong office on +852 2544 3410, the London office on +44 (0) 207 397 4920 or email info@fp‐marine.com