A Study On Legal Issues Of The Loss Of Hire Insurance

Loss of hire (hereinafter as LOH) insurance is a kind of insurance generally effected by the shipowners besides 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. This thesis therefore focuses on several important issues on this insurance.This thesis is divided into5chapters. Chapter One is on the general issues of the LOH insurance. Through the forms of losses covered by this insurance, the author analyzes its concept and legal characteristics. Then from the comparison with freight insurance, an insurance also covered shipowners’ loss of income, the author make more clear what the LOH insurance is. At last three standard terms are introduced briefly.Chapter Two is the study of the insurable interest issue. This chapter starts with the introduction of the general theory of insurable interest and then analyzes what kind of insurable interest it is under the LOH insurance. In the third part of this chapter, the author introduces an importance precedent on this issue, through which the author discusses the conditions to be treated as having insurable interest.Chapter Three introduces the perils covered by LOH insurance with a comparison between the three standard terms, and several precedents are also introduced to explain the right meaning of some perils covered.Chapter Four is on the core issue, i.e. the liability of the insurer. In this chapter, the author spends a considerable part on the question how to calculate the compensation, especially on the calculation of loss of time caused by repairs in different situations. The author spends a little part studying on the special restriction of insurer’s liability provided by the Lazard Form. Then this chapter moves to the suing and laboring costs, making a comparison with the hull insurer’s liability to pay these costs.Chapter Five is the discussion of the duties of the insured and insurer’s right of subrogation. In respect of the former, the author mainly studies the duty of disclosure and the duty to sue and labor, since both of them differ from those under other insurances. Regarding the latter, the author analyzes the pre-conditions and the specific circumstances for insurer to exercise such a right, and then, this chapter analyzes the complex issue, i.e. the distribution of the compensation made by the third party between the assured and the insurer.In the part of the Conclusion of this thesis, with summarizing all of the study results arising from the above, the author analyzes the feasibility of the LOH insurance in China, and according to the advantages and disadvantages of the three standard terms, the author gives his initial advice on the standard terms for LOH insurance to be used in China in the future.