Ship Building Sale and Finance

Page 80


The evolving nature of builders' risks cover

The evolving nature of builders' risks cover

Professor Bariş Soyer

6.1 Introduction

Builders’ risks cover forms a significant part of the contractual matrix in any construction project. It is often a requirement of any shipbuilding contract, standard or otherwise, that such cover is put in place by the time the construction commences.2 Although it is customarily the shipyard which is the purchaser of this insurance product, the primary role of builders’ risks cover is to provide financial security so that the project could continue in the event of a casualty occurring during the process of construction. Under English law, a shipbuilding contract is viewed as a contract for the sale of goods and, unless it is otherwise provided in the contract itself, the risk of loss of or damage to the ship during construction and until delivery to the buyer is borne by the builder.3 The existence of a builders’ risks cover provides peace of mind to the buyer who will operate in the knowledge that in the event of an unexpected casualty, the builder will secure adequate funds to repair the damage and keep the building contract on track.4

The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.