Security Package & Loan Documentation
Assignment of Insurances
Summary
An insurance assignment gives the financier specified rights in insurance proceeds and policy-related claims connected with the financed vessel.
Why this matters in ship finance
It supports collateral protection after casualty while remaining distinct from the owner’s policyholder duties and the insurer’s coverage defences.
The concept
The assignment may require notice to brokers and underwriters and can work alongside loss-payable clauses, mortgagee-interest insurance and covenants to maintain coverage. The relevant law determines validity, third-party effects and recoverability.
How it is used in practice
Check policy identification, insured interests, renewal, insurer acknowledgement, permitted loss payments and treatment of constructive total loss or major damage.
Practical issues
Assignment does not override policy exclusions, non-disclosure, sanctions restrictions or insolvency law. P&I may require distinct club rules and arrangements.
How ShipFinance.ai uses this concept
Connect insurance documents, expiry dates and claims allocation to recovery scenarios.
Key takeaways
- Assignment and coverage are different questions
- Claims depend on policy terms
- Reinvestment versus prepayment must be specified