Issue 14, 2010 - Refund guarantees – things to look out for
With the downturn in the markets the efficacy of the refund guarantees has now begun to be tested both by buyers and shipyards. When contracts are cancelled consideration will be given to whether the refund guarantee is an “on-demand” guarantee or one that responds when certain conditions
are met. Unsurprisingly shipyards and insurers standing behind such guarantees are actively considering ways in which their exposure to such guarantees can be minimised.