Marine Insurance is a type of insurance that covers cargo losses or damage caused to ships, cargo vessels, terminals, and any transport in which goods are transferred or acquired between different points of origin and their final destination. Providing protection against transport-related losses, this voyage policy provides a haven for shipping companies and couriers because it protects them from costly potential losses while transporting goods by water.
Despite following laws and safety regulations, transporters can’t control natural occurrences that might disrupt the cargo or vessel. Things like weather hazards, encounters with pirates, and cross border conflicts are very common in water transportation and the damages associated with these situations can cause a significant financial hardship for ship owners. This is where a marine insurance policy comes to the rescue, protecting the interests of shipping corporations and transporters by providing them with insurance coverage needed to defend against possible losses.
Another great feature of marine insurance is that transporters can choose coverage options applicable to their specific trade. Coverage requirements can differ, so shipping businesses can choose an insurance plan that is customized. Different policies are available to provide coverage according to the size of the ship and routes taken.
Ocean marine insurance is such a broad term that it is usually applied to a group of coverages to provide protection against certain losses or damages. Generally, there are three common types of marine insurance that provide different protections.
Hull Insurance – Offers protection for physical damages to the boat or vessel along with its operating equipment, including machinery. This policy is applicable for all water vessels and limited to commercial-based ocean crafts. Barges, tugboats, oil rigs located offshore, floating equipment, and other similar installations can benefit from this type of insurance.
Cargo Insurance – Provides coverage for physical damage to cargo that is conveyed or travelled as part of the shipment process. Depending on the chosen coverage, some policies offer theft protection or coverage for other forms of losses besides physical damage.
Marine Liability Insurance – Also called P&I or protection and indemnity, this coverage offers protection for third-party liabilities that owners and corporations are exposed to during water operations. It includes coverage for injuries, illnesses, or even loss of life caused by vessel operation. Medical expenditures, damage to other vessels and cargo, collision incidents, and related expenses as a result of quarantine may also be covered.