Hull Insurance is a useful tool for those involved in the shipping industry in manners of handling ships or ocean-going platforms (oil exploration rigs etc.). Marine policies can be used by the shipowner/operator, shipping companies, shipbuilders and even the shipbreakers to cover the risks of damages to the vessel’s body and machinery or the damage from the ship’s body and machinery.
Here we have a look at what are the situations where Marine Insurance is useful, and in what activities should it be considered.
Should You buy Marine Hull Insurance?
If any of the following conditions apply to you, you should consider getting a Marine Hull Policy:
- You own/operate a shipping company
- You operate a water sports company with multiple water-going vessels
- You own one or many yachts or river crafts
- You own a ship-breaking company
- You own/operate oil exploration platforms etc.
- You are financing any of the above activities
Just like if you own a car, you buy car insurance; you need a marine hull policy if you own or are in the business of owning the oceangoing (or any river-going) vessel where you have an insurable interest in its well-being.
What is Covered?
Depending on the type of policy, multiple risks are covered for the insured, and some common coverage includes:
- Damage to the body of the ship/vessel
- Damage to Machinery inside the ship
- Theft of the vessel
- Damage to a third party from the vessel
- Wreck removal from the site of the accident
- Business interruption due to shipping accident (for Ports)
What to Look for While Buying Marine Hull Insurance Policy?
The first thing is simple, ‘the kind of activity you are involved in makes all the difference. For example, if you are a shipping and transport company you need to insure the fleet of ships you are operating, while if you are an energy and exploration company, you should be looking to ensure the offshore vessels and pipelines.
The reasoning behind this different selection is obvious. Insurers have designed policies with customized clauses applicable to various types of activities, as the magnitude of risk exposures and the risks themselves are uniquely different for each.
Types of Marine & Hull Policy
There are three different types of Marine Hull Policies based on the activity of the insured:
- Ship/Vessel Damage Policy
- Comprehensive Port Package Policy
- Oil & Energy Risk Insurance Policy
Ship/Vessel damage policy is most suitable for those owning and operating ships for transport and goods carrier purposes in any navigable waters. The Port policy works best for shipyards, ship-breakers and ports servicing the ships in one or the other manner. And finally the oil and energy risk policy is designed specifically for the needs of oil and energy exploration firms involved in offshore oil (or other energy-related elements) exploration and supply.
What is Not Covered?
Like other insurance policies, marine hull policies also cover losses with some conditions. Following are some common exclusions presented by almost all insurers and types of marine hull policies:
- Deliberate damages
- Damage from terrorism
- Radioactive contamination
- War/civil strife, strike, etc.
- Insolvency or financial default of owner/operator of the vessel
These are only some common exclusions. It’ll be better if you check with your insurer for the conditions mentioned in small letters for the cover of loss in any case.
How to Buy?
Buying a marine hull policy is not as simple as purchasing a health cover for all your employees. But it may not be very complex, as most of the activities are taken care of by the insurer. Though, initially, before you finalize the insurer, you may want to know the probable premiums, conditions, and features offered by various insurers.
You can do it the traditional way, where you contact multiple insurers, who will send their agents and surveyors to assess the value of assets and then put a quote and conditions. The catch is that you will need to incur the cost of the surveyor in each case.
This is avoidable if you follow the modern method of online insurance brokers. It can help you receive probable quotes from multiple insurers. All you need to do is answer a few questions which will assist the insurer in preparing a quote, and you can go ahead with the one which presents a reasonable price for the best features.
Other than this they will also help you with the paperwork, and provide a 24×7 resource to help you finalize and then continue with the policy.