An unusual letter of indemnity

A ship owner demanded that a ship agent in West Africa sign a Letter of Indemnity in his favour before the ship arrived at the port. The Letter of Indemnity was, according to the ship owner, a requirement of the ISPS Code and provided that the agent: a) agreed not to claim against the owner, regardless of the owner’s responsibility in the matter, negligent or otherwise; and b) agreed to indemnify and insure the owner against any claims and expenses that result from the performance of the services provided by the agent.

Owners often attempt to obtain this type of Letter of Indemnity from parties boarding the ship such as engineers, working gangs, students, cadets and even P&I personnel.

Owners also try to obtain such Letters of Indemnity from marine surveyors (see the article in the Intermediary 2006 on “Surveyors Signing Indemnities). It is not usual or reasonable, however for this type of Letter of Indemnity to be signed by port agents nor is it a requirement of the ISPS Code. The Member referred the request to the Club, and following advice refused to sign the Letter of Indemnity as its contents were totally unacceptable, and could prejudice the terms of their insurances with the Club and other insurers. The ship owner, under the guise of complying with the ISPS Code, attempted to contract out of his liabilities. Agents should always refuse to sign such indemnities.