Terms & Glossaries of Shipping and Trading

IWL (Institute Warranties Limits)

IWL define the geographical limits within which vessels can operate without incurring additional insurance premium from hull and machinery underwriters. Until 2003 the limits were referred to as INL (International Navigating Limits) and the term IWL is still frequently found in charter parties today.

What is IWL (Institute Warranties Limits)?

IWL refers to Institute Warranty Limits. When it comes to clarifying the potential insurance coverage issues over the damage to the vessel and determining different insurance premiums based on the perceived risks, IWL will come into play. 

However, since November 2003, the term IWL has been amended and renamed as International Navigating Limits (INL) by the Institute of Chartered Underwriters. Though IWL can still be found in charter parties, it is the term INL that becomes effective. 

INL stands for International Navigating Limits. It is usually used in the vessel-trading limits clauses of charter parties. International Navigating Limits mean a set of geographical limits determining the area in which ships can operate without incurring extra insurance premiums. 

Considering varying risks that can lead to financial losses when a vessel is operating, it is necessary to insure the hull and machinery of the vessel. However, risks that the insurance policy can cover are limited. When a vessel is operating outside the INL defined limits, the subsequent risks that the vessel may confront will not fall under the insurance coverage. And in this case, the insurance premium rates will be set differently. 

If a vessel goes beyond the International Navigating Limits, possibilities remain that it can encounter some hazards like ice, which may cause losses or damages to the vessel. And underwriters have to assess and calculate the relevant insurance fees based on the situation of operating outside the INL.

It's essential for ships to stay within the INL to avoid these risks and ensure a safe and timely delivery of goods.