The Different Sides of Marine Insurance Coverage

Marine insurance coverage necessary to safeguard goods from potential transit risks. But what exactly is marine insurance? What are the different types of marine insurance coverage available, and how much does it typically cost? If you’re looking for the answer to these questions, you’re in the right place. 

What is Marine Insurance Coverage?

Marine insurance is an agreement of indemnity. Likewise, it assures that products and goods transported from one country to another have appropriate insurance policies. 

The coverage should protect the interests of the vessel owner, the cargo owner, or any other parties involved in marine transportation against loss or damage due to various perils, such as fire, theft, piracy, collision, natural disasters, and other unforeseen events.

Although the name suggests otherwise, marine insurance doesn’t only apply to goods transported by sea. Furthermore, it covers all modes of transportation for goods, including air transport. In such cases, it is the contract of marine cargo insurance.

Different Types of Marine Insurance

What are the different types of marine insurance? We go into the differences and the variations. 

Machinery Insurance

Marine insurance covers all vital machinery and compensates claims in the event of operational damage, subject to post-survey approval by a surveyor.

Hull and machinery insurance sometimes combine into a single Hull & Machinery (H&M) Insurance policy. In addition to covering the ship’s hull, this policy can also extend to cover war risks and strikes that lead to costly delays in port.

Marine Cargo Insurance

Marine cargo insurance protects against losses or damages during the voyage or unloading process, including accidents or delays. It also extends coverage to potential damage caused by dangerous cargo when transporting to the port, ship, or other modes of transportation.

Hull Insurance

Hull insurance covers the body and structure of a vessel, as well as all the articles and furniture on board. Typically, shipowners take this type of marine insurance out to prevent any losses in case of accidents.

Liability Insurance

Liability insurance compensates for any liability arising from ship collisions, crashes, or other incidents caused by induced attacks.

P&I Insurance

Provided by the P&I club, this insurance ideally covers damages or losses to third-party goods other marine insurance policies might not cover.

Freight Insurance

Freight insurance protects merchant vessel corporations that may suffer financial losses due to lost cargo from accidents.

Freight Demurrage and Defense Insurance

Also known as “FD&D” or “Defense,” this insurance policy covers the legal costs and claims for handling assistance in various disputes that fall outside the scope of H&M or P&I insurance.

How Much Does Coverage Cost?

The price is determined based on several factors, including the type of goods, their value, the mode of transportation, the geographical region, and how shippers pack the cargo.

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.