Question 1

What is Builder's Risk Insurance for vessels?

Accepted Answer

Builder's Risk Insurance (also known as Marine Builder's Risk or DSU – Delay in Start-Up) protects a vessel under construction at a shipyard. Coverage commences at keel laying and extends through sea trials and final delivery to the vessel owner.

Question 2

Who needs Builder's Risk Insurance?

Accepted Answer

Both the vessel owner commissioning a new build and the shipyard carrying out the construction have insurable interests that need protection. Builder's Risk policies can be structured to cover either or both parties depending on the contractual arrangement.

Question 3

Does Builder's Risk cover damage during sea trials?

Accepted Answer

Yes. Most Builder's Risk policies include the sea trial period as part of the overall coverage, since damage during sea trials is considered an inherent part of the construction and commissioning process.

Question 4

Can major vessel repair or conversion work also be covered?

Accepted Answer

Yes. In addition to new builds, Builder's Risk policies can be arranged to protect vessels undergoing major renovation, ship conversion, or heavy repair (major refit) that requires extended drydocking.

Question 5

What is Increased Value (IV) in a Builder's Risk policy?

Accepted Answer

Increased Value is a supplemental coverage that compensates for the difference between the completed vessel's worth and the primary insured value — particularly relevant when the vessel's market value rises significantly during the construction period.

Builder's Risk Insurance

Protection at Every Stage of Vessel Construction

Keel Laying

Construction Phase

Launching

Sea Trial & Delivery

Risks Covered During Vessel Construction

Builder's Risk Insurance – Common Questions

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