In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying with charterers' or shipper's request to take on risks which can fall outside the contractual demands normally placed on a carrier. These can also fall outside the scope of standard insurance coverage, and hence deserve careful attention. Key points of advice Taking a LOI against a request may create obligations outside of the basic contractual agreement; These may impact on standard insurance coverage; Special consideration needs to be paid to both the nature and terms of the request; - nature and terms of the request - terms of the LOI - party making the request - authority of the signor of the LOI - enforceability of the LOI It is best to address these issues, if foreseeable, at the outset of the fixture, with suitable charter terms and LOI templates included as an addendum to the charterparty Owner's obligations Owners' basic obligations are very closely connected with the three functions of a negotiable Bill of Lading (B/L), in particular as a: Receipt of the goods, which operates as prima facie evidence of the goods' quality and condition Evidence of / being the contract of carriage, which gives to the parties of the sales transaction rights against the carrier in regard to the safe carriage of the goods and their delivery at destination Document of title which is subject to transfer and endorsement and gives a right to demand delivery Market practice The owner's obligations are set down in law, and are also the basis for the insurance coverage for cargo claims, yet in practice parties may seek to adopt alternative practices that aim to address commercial considerations that arise from time to time. The most common way of dealing with traders' requests outside the contractual obligations are closely related to the use of letters of indemnity (LOIs). These should contain, effectively, a straight forward promise: if you d