Marine Insurance Coverages

How Do I Get the Best Price / Conditions for My Insurance Program?

Below is a very brief overview of the many types of insurance available to maritime industries. (Some of the coverage descriptions contain links to insurance applications).


Because vessels move around, it is difficult or impossible to regulate the marine insurance contracts covering the boat. So, for the most part, marine insurance is not subject to governmental regulation. True, there are many "standard" forms in use by marine insurance underwriters, but there are an even greater number of insurance contracts that are unique to a particular insurance company. The forms used to provide a particular coverage often differs substantially between insurance carriers!

Marine insurance terms are often expressed as abbreviations and many are (at times) arcane, but, they still have meaning. If you do not understand an abbreviation or marine insurance term, look it up here.

Hull Insurance: Commercial Hull Insurance generally includes coverage for both physical damage to an owned or chartered vessel, salvage costs and limited property damage liability (collision and towers' liability) for the operation of that vessel. There are also specialized adaptations of hull insurance to cover vessels under construction (Builders' Risk) and for marine inventory held for sale (Boat Dealers' Physical Damage).

Protection & Indemnity (P&I) provides bodily injury and property damage liability. P&I covers exposures for the owner and the vessels' liability others including the crew of the vessel. P&I policies also include wreck removal.

Commercial General Liability(CGL): Land-based liability insurance coverage for premises, operations, independent contractors and product / completed operations. Major exclusions include watercraft (covered by P&I policies) and property in the care, custody and/or control of the insured (usually covered by property or legal liability coverages).

Legal Liabilities: There are a variety of coverages that address the different maritime bailee exposures (coverage for other people's property in the care of the insured). The list is self explanatory: Shiprepairers' Legal Liability, Marina Operators' Legal Liability, Terminal Operators' Liability, Stevedores' Liability and Wharfingers' Liability.

Marine General Liability (MGL): This is a relatively new policy structure which often combines traditional Commercial General Liability with different kinds of maritime liabilities such as. P&I and legal liability. MGL policies were intially written to address the unique needs of business that had both land-based and maritime liability exposures. A note of caution: Some MGL policies have the look and feel of the Commercial General Liability policy, but may have been altered or amended so as to limit the insurance company's exposure to losses, often to the detriment of the policyholder.

Bumbershoot Excess Liability: Marine excess liabilities. Usually provides higher limits over primary liability coverages including general liability, P&I, legal liability, automobile liability, employers' liability etc.

Pollution Liability: Virtually all standard third-party policies exclude pollution. Coverage can be purchased to include environmental impairment coverage for a site, for Underground Storage Tanks, Above Ground Storage Tanks and for Vessels. We are brokers for the Water Quality Insurance Syndicate. As such, we can arrange coverage for vessel pollution coverage, including limited fines and penalties and a number of other ancillary coverages.

Ocean/Air Cargo: Covers world-wide physical damage and loss of imported / exported goods. Can be extended to cover inland shipments and warehousing in transit - Cargo Application.

Yacht Insurance: This is a package policy which combines hull coverages and marine liabilities coverage into a single policy for recreational vessels. - Yacht Info / Full Yacht Application

Workers' Compensation: Covers the statutory obligations of an employer for injuries to employees required by state and (if so endorsed) federal laws. Workers' compensation is (theoretically) simple, but, because of numerous statutes and the maritime liability of a vessel to it's crew, workers' compensation can be expensive and difficult to obtain for the marine trades. Depending upon an employee's job at any particular time, an employer could be liable for injuries under state worker's comp laws, US Longshoremens' and Harborworkers Compensation Act or in US Admiralty court.

Flood Insurance: After the recent hurricane activity and the excessive rains in Spring 2006, flooding has been much in the news of late. By their nature, most marine facilities are near bodies of water, hence exposed to the danger of flooding. The National Flood Insurance Program is the single, most cost effective method to insure your flood exposures. The policy offers physical damage coverage to buildings and their contents, if damaged by flood. Flood Info Sheet

Miscellaneous: Most maritime businesses have a need for other non-marine supporting coverages. A partial list would include:

Property insurance: covering damage to your buildings, contents, yard property, boiler insurance and business interruption losses. Inland marine coverages are slightly different; in general, they cover mobile equipment -- cranes, travelifts, and other types of yard equipment.

Automobile coverages: liability for damage to others by motor vehicle and physical damage to your own vehicles.

Foreign coverages: many marine businesses operate in a number of different countries. Foreign Property, Liability, auto and compensation are typical examples

Liquor Liability: Yacht clubs, marinas with restaurants/snack bars, ferries and tour boats, for example, serve alcoholic beverages. Protection requires specialided coverage for alcohol related claims in addition to their other marine and land-based coverages.

Other Specialty Coverages: Some marine businesses should review their need for "specialty coverages" like Employment Practices Liability and Directors and Officers' Liability.

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