Marine Insurance for Hurricane Season

Marine insurance is a specific policy that can help people during hurricane season, and a decision that can save them a lot of money. Marinas and boats can be vulnerable to loss and damage when hurricanes strike. Your clients probably already know about getting marina insurance, but what about marine insurance?

While marina insurance safeguards marinas from risk exposures inherent in the business, marine insurance is for boats and other water vessels, while marina insurance provides comprehensive coverage for potential losses and damages that business owners may face, marine insurance is better suited for private owners.

Marine Insurance and the Need

Why do your clients need marine insurance? All insurance plans help manage risks when accidents, property damage, personal injury, and loss of life occur. But not all policies are suitable for ship owners, who typically incur higher costs due to operational factors.

These risks heighten during extreme weather conditions, such as when a hurricane or tropical storm occurs. During these events, standard insurance policies may not cover all the risks ship owners incur, regardless of how comprehensive they are.

What protection does marine insurance provide? Some of the risks that marine insurance may safeguard against are: 

1. Loss of cargo or water vessels
2. Environmental damage from oil pollution
3. Injury or loss of life

Marine insurance ensures that shipowners can manage these and other risks without paying for the expenses out of pocket. This type of insurance is compulsory for most ships and commercial vessels. 

Marine Insurance Coverage

“Marine insurance” is an umbrella term for different coverage types that generally apply to water vessels. But your clients may not necessarily need all the options available. Most plans provide a basic set of coverages and allow policyholders to add individual features to suit their specific needs.

Here are some of the different coverages available. 

Hull Insurance

It primarily covers the ship’s hull and torso and the furniture and other onboard items. It is typically to safeguard against losses in case of any unfortunate incidents.

Machinery Insurance

It covers all the ship’s essential machinery and pays for damages that may occur while the vessel is operational. A surveyor grants claims after conducting a survey. Some insurers offer combined hull and machinery insurance in a policy known as Hull & Machinery (H&M) insurance. Lastly, it may include coverage for war and employee strikes.

Protection and Indemnity (P&I) Insurance

It is a ship owner’s protection under a mutual insurance policy known as the P&I club. Next, it covers third-party risks and liabilities that may not receive the same coverage from H&M insurance and other procedures. Hazards covered by this policy include those associated with the vessel’s ownership. Additionally, it can consist of claims made by crew members and those related to hiring the ship.

Liability Insurance

It covers losses resulting from crashes, collisions, or other induced attacks involving the vessel.

Freight, Demurrage, and Defense (FD&D) Insurance

It covers claims for handling assistance and legal costs arising from disputes that H&M or P&I insurance does not cover. It is sometimes known as “FD&D” or “Defense” insurance.

Freight Insurance

It covers freight losses that merchant vessel corporations may incur. It covers the expenses associated with such losses resulting from accidents and unexpected events.

Marine Cargo Insurance

It protects the cargo on board a ship and the belongings present during sea voyages. Then, it covers damages or losses resulting from accidents or voyage and unloading delays. It also provides liability coverage for injury occurring to the port, ship, trucks, or railway vehicles resulting from the ship’s hazardous cargo.

With these types of insurance, policyholders may claim compensation within a specific period. Also, it typically depends on the terms outlined in the policy. 

With newly-built vessels, ship owners need insurance coverage for a specific period. In most cases, this is a full year beginning when the ship arrives at the yard. 

Type of Marine Insurance Policies

There are specific types of marine insurance policies that shipowners can attain. Some policies may also include coverages not provided as part of standard marine insurance packages. Some of the policies that may be available to ship owners are:=

1.   Voyage policy. These are valid for specific voyages.
2.   Time policy. These cover a specific period, usually lasting a year.
3.   Mixed policy. It combines time and voyage policies in a single insurance plan.
4.   Open or unvalued policy. This policy doesn’t cover a specific value. Instead, losses get assessed after the incident occurs.

As you can see, marina insurance is a complex and specific aspect of the insurance industry. It is vital to discuss the various options with your clients to determine the best policies according to their needs.  

About Merrimac Marine Insurance

At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ business and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.