Marine Hull Insurance
Marine Hull Insurance
When talking about marine insurance, the first thing that comes to mind is protecting the ship’s body. The soundness and perfect operation of the hull and machinery of a ship are keys to the safe transportation and delivery of any cargo or freight. That is why Marine Hull Insurance is designed to provide coverage to ship owners. In addition to this, hull insurance also covers yachts, charter boats, head boats, and hull builders’ risks.
Read on to learn how Marine Hull Insurance will cover all your business needs.
What is Marine Hull Insurance?
For all operational cargo ships and merchant vessels, marine insurance is like a security blanket. There are different types of marine insurance, and one that specifically aims to protect the vessel carrying the cargo is marine hull insurance.
Hull is the outer body of the vessel, and thus, it is an insurance policy that is designed to provide coverage for water vehicles like boats, ships, steamers, fishing boats, yachts, and more.
The hull is the main part of the ship, and damage to the hull compromises the safety of the ship. Thus, with marine hull insurance, ship owners can avoid financial loss.
Clauses Under Marine Hull Insurance
There are 3 main clauses under the marine hull insurance. They are as follows:
This includes risks associated with seas, rivers, and other navigable waters. It also includes any risk related to property loss or damage due to fire, drinking, capsizing, robbery, jettison piracy, or a natural disaster.
The FPA is the “Free of Particular Average” insurance clause and is similar to the hull coverage, except it excludes mechanical damages. It is generally offered when a ship is more than 15 years old because older vehicles are more likely to sustain damage.
Only the whole loss based on real, compromised, or constructive losses is covered by this clause. This type of policy is mostly offered to very old and huge vessels, and it comes at a reduced rate.
Benefits of Marine Hull Insurance
Some of the marine hull insurance benefits to be noticed are:
- Comprehensive Coverage
A Marine Hull insurance policy offers protection for your vessel’s hull and machinery from loss or damage caused by a variety of dangers such as fire, explosion, robbery, collision, and other ship-damaging events. - Adaptable Plan
You can buy marine hull insurance to safeguard your vessel or yacht for a specific journey or to cover your vessel for a specific period, generally 12 months, regardless of its voyages. - Coverage of Inland Vessels
A marine hull insurance policy can protect inland waterway vessels against a variety of dangers, including collisions, piracy, and the destruction of wrecks. A ship’s sinking can also be covered. - Simple Documentation
Marine Hull insurance is very simple to obtain. The agreed value, which is identical to or about the cost of the ship to be insured, also determines the sum assured for hull and machinery insurance.
Features of Marine Hull Insurance
The features of marine hull insurance that you should know as a ship-owner are:
- The dangers of navigating by sea are greater as compared to those of traveling by land or air. The ship can be destroyed, lost, or sunk as a result of a fire, robbery, or collision, and the financial loss due to this can be ruinous because marine vehicles are very expensive. Yacht and other pleasure boat owners are always in great danger because their vessels are expensive and don’t generate any profit.
Marine Hull insurance can be purchased for a specific period. It means you have the option of insuring your ship or yacht for each voyage or buying a comprehensive plan that covers your vessel for a set period.
- The sum assured in marine insurance is not a fixed amount, but rather a value agreed upon by the insurer and the insured. It is generally equal to or close to the vessel’s cost. The amount of premium given to the insurance company is determined by various factors, such as:
Type of vessel:
- The vessel’s age (which is based on the number of years it has been in service)
- The cost of the vessel is as per its valuation.
- The vessel’s tonnage duty and trade limits.
- The vessel’s ownership terms.
- Type of insurance coverage the vessel requires.
What Does Marine Hull Insurance Cover?
Marine Hull Insurance covers all accidental loss or damage to boats used for commercial purposes. Coverage under Marine Hull Insurance includes:
- Vessels insurance
This covers all accidental loss or damage to the vessel within the agreed navigational limits set by the policy. A valuation and survey of the vessel is usually needed for this insurance, which is set at an agreed value. Liability Insurance
The liability can be included as an extension to the hull insurance or can be taken as stand-alone cover. The limits chosen for liability can vary based on vessel type, use, or territorial limits.- Ship Repair Cost
The insurance also covers the legal liability that ship repairers face for loss or damage occurring while a vessel or craft is in their care, custody, or control. It also applies when a vessel is being moved within the port limits and work is done by a specialist repairer. - Ship Builder’s Risk
It protects the vessel under construction, and the cover is provided against risks of physical loss or physical damage. It also allows for sea trials and liabilities arising out of the build.
What is Not Covered Under Marine Hull Insurance?
Marine Hull Insurance is an all-inclusive policy, but certain cases fall outside of its coverage list. The cases are:
- Normal wear and tear of the hull machinery
- Damage is done due to nuclear activity
- Radioactive contamination
- If damage is done by the crew members under the influence of alcohol.
- Intentional damage to the vessel
- If damage is done to the vessel due to any terrorist activity.
- Sailing the vessel in a sea storm even after the issuance of a warning.
- Overloading of goods.
Please note that this list can have some additions/omissions depending on different insurance providers.
To Sum Up,
Any shipping company that operates through water bodies can face a huge loss if the ship is damaged due to a collision with other boats or sinks. Also, in times when the discarded fishing net gets stuck in the underwater turboprop blades, the ship has to go into repair. These incidents can increase the cost of operations and repairs and can also result in a loss of revenue due to the cessation of the ship’s operations. To recover such financial losses, marine hull insurance is a must for firms to make sure their vessels are operational and protected at all times.
However, there are various marine hull insurance providing companies in the market, making it hard for the customer to choose one. Thus, Policy Wings will do the job for you and help you avail of the best marine hull insurance policy in India.
Frequently Asked Questions
Yes, the ships can be damaged at any time. There are examples where a vessel was destroyed while docked at a port and was not even sold. If the owner works without any insurance in such situations, he/she will certainly face a significant financial loss.
The term “loss of hire” refers to business owners who rent out their ships. If the ship is damaged for reasons that are not covered in the policy and are also unable to be hired, then the insurance company will cover the loss of income until the damage is repaired properly.
Yes, a degree of protection and indemnity (P&I) cover is provided following the terms of your hull and machinery insurance cover. In addition, some insurance policies also offer full P&I insurance, with liability for cargo, crew, and pollution.
Latest Blogs
