The Norwegian Hull Club has launched a policy to cover shipowners for the additional costs of green recycling in the case of a wreck removal.
The Bergen-based mutual insurer's new policy comes in response to increasing international regulation requiring that ships are dismantled in a safe and environmentally friendly way.
The policy, known as Sustainable Recycling Interest, will pay the additional costs of green recycling if a vessel is declared a constructive total loss in a casualty situation.
Hege Midtsaeter, senior vice president of global specialty at the Norwegian Hull Club, said clients asked for the cover amid uncertainty over whether the additional costs of green recycling would be through protection and indemnity insurance.
“This has become an increasing concern for our clients and we have a focus on developing sustainability products,” she said.
The club said that many of its clients want to make sure their ships are recycled in a sustainable way.
The policy is being offered as a subsidiary to P&I cover and is triggered when the vessel is declared a total loss.
$5m cover
The cover limit is up to $5m and covers the costs of green recycling “independently of the legal requirements to do so”.
It covers the extra cost of the transportation and dismantling of a vessel to a yard approved under the European Union’s Ship Recycling Regulation.
Midtsaeter said she believes the cover levels are adequate but could be reviewed depending on market developments. “It is something we might review going forward,” she said.
