Liability Insurance
Liability insurance protects the ships in the event of a crash, attack or collision that leads to sizable damage or loss. The policyholder gets compensated for liability that is beyond control.
Marine liability insurance covers shipowners, operators, or charterers against legal liabilities arising from damage or injury caused to third parties.
This includes coverage for liabilities due to collision, loss of cargo, environmental damage, and bodily injury or death. Protection and indemnity (P&I) insurance is a common type of marine liability insurance that provides broader coverage for shipowners, including crew injuries, pollution liabilities, and damage to docks or ports.
Marine Cargo Insurance
It covers loss/damages caused to the cargo during transit. This coverage also handles damages caused due to delays in unloading or ship accident. This insurance is more beneficial for heavy cargo shipments e.g. tankers because it protects the entire ship.
Cargo insurance protects the goods and merchandise transported by a ship. This coverage is crucial for importers, exporters, and shippers who need to ensure their goods arrive at their destination safely.
It provides compensation for loss or damage to cargo due to perils like sinking, fire, piracy, theft, or natural disasters. Cargo insurance can be further divided into types like:
- Open Cover Cargo Insurance: A continuous policy that covers all shipments within a specified period.
- Specific Voyage Policy: A one-time coverage for a particular shipment from the point of origin to the destination.
Marine Hull Insurance
This type provides coverage to the vessel, including furniture and items on the haul. Shipowners must not overlook this particular policy.
Hull insurance covers physical damage to the ship or vessel itself. This type of policy is essential for shipowners as it protects the vessel against damages caused by accidents, natural disasters, collisions, or other perils at sea.
Coverage typically includes the ship’s structure, machinery, and equipment. Hull insurance can also extend to cover liabilities arising from collisions with other ships, known as the “collision liability clause” or “running down clause.”
Protection and Indemnity (P&I) Insurance
P&I insurance is a specialized type of marine liability insurance that provides extensive coverage for shipowners and operators. This insurance covers risks that are typically excluded from standard hull and cargo insurance policies.
Coverage includes third-party liabilities, environmental pollution, damage to harbor facilities, repatriation of crew, and stowaway-related costs. P&I insurance is managed by Protection & Indemnity Clubs, which are mutual insurance associations.
Marine Builder’s Risk Insurance
This insurance type covers the construction of a new ship or vessel. It provides protection against risks like fire, theft, and natural disasters during the building phase. Coverage starts when construction begins and continues until the vessel is delivered to its owner. Marine builder’s risk insurance is crucial for shipyards and shipbuilders.
War Risk Insurance
War risk insurance covers losses or damages caused by war-like situations, including acts of war, invasions, strikes, and terrorism. Since standard marine insurance policies often exclude war-related perils, this coverage is necessary for ships operating in or near high-risk areas. War risk insurance can cover both the hull of the ship and the cargo on board.
Machinery Insurance
All vital machinery on the ship is covered in the case of operational damages, which will undergo analysis by the surveyor before claims compensation.
Freight Insurance
Freight Insurance is a policy placed by a third-party company to ensure partial or total coverage for your cargo. It’s an exclusive policy only to the shipper and the particular freight shipment and will only be responsible for the third party’s claims.
Freight insurance covers the freight payment that a shipping company stands to lose if the cargo is damaged or lost during transit.
If the goods are damaged or do not reach their destination, the shipping company may not receive the freight charges. This insurance ensures the shipper does not face financial loss from the unpaid freight.
Inland Marine Insurance
This coverage is not the same as marine insurance. While Marine insurance covers products transported on the sea, Inland covers products, and items, among other objects transported on land e.g materials transported via trucks.
While traditionally associated with maritime activities, inland marine insurance extends coverage to goods transported over land.
This type of policy is used for shipments that involve transportation via trucks, rail, or other inland methods. Inland marine insurance is crucial for logistics companies and businesses involved in domestic shipping.
