Pre-Existing Liens Insurance

In buying and mortgaging second hand vessels there is always the risk of there being outstanding liabilities, incurred by former owners, having the status of a maritime or statutory lien on the vessel.

In many jurisdictions such liens rank ahead of the mortgage.
Though every MOA states the seller’s responsibility for and provides a full indemnity against any maritime or statutory liens, when the seller is a single shipowning company that is usually dissolved following completion of the sale, there is rarely any recourse against sellers.

Lawyers acting for the buyers will have researched the most likely jurisdictions for liens against the vessel but no investigation can be guaranteed to be absolute.
This insurance covers this risk of liens unknown to the buyer at the time of purchase being enforced against the vessel under new ownership.