Types of Marine Insurance Policy 3 A Guide to Choosing the Right Coverage Marine insurance provides essential protection for maritime assets and operations, safeguarding against the unique risks faced at sea. This specialised form of insurance is vital for exporters, shipowners, charterers and all businesses engaged in maritime trade. From devastating storms and piracy to collisions and cargo loss, marine insurance offers financial security against the unpredictable perils of ocean transport.
Freight Insurance What It Covers
Policy Types
Who Needs It
Protects against loss of freight
Available as specific policies
Essential for shipowners,
income or cargo revenue during
(covering single shipments) or
consignors and consignees who
transit, ensuring businesses
open policies (covering multiple
stand to lose revenue if cargo is
remain financially stable even
shipments), offering flexibility
damaged or lost during
when shipments face problems
based on shipping frequency.
maritime transport.
at sea.
Liability Insurance Types of Marine Liability Coverage Protection & Indemnity (P&I) Covers liabilities arising from pollution incidents, collisions, and crew injuries that aren't covered by standard hull policies.
Key Benefits Legal protection against third-party claims Coverage for environmental damage and cleanup costs Protection against crew injury claims Defence costs for maritime litigation Compliance with international maritime regulations
Charterers' Liability Protects charterers against claims for vessel damage resulting from their negligence or operations.
Ship Repairers' Liability Covers damage that occurs during vessel maintenance and repair activities.
Hull Insurance Physical Coverage Protects the vessel's physical structure, including hull, machinery, and equipment against damage.
Brown Water Hull Tailored for vessels operating in inland waterways, harbours, and coastal areas with different risk profiles.
Coverage Options Available as Total Loss Only (TLO) covering complete vessel loss or All Risks covering partial damages as well.
Blue Water Hull Designed for vessels operating in open seas and international waters, covering ocean-specific perils.
Hull insurance typically covers perils such as collision, fire, sinking, piracy, and weather damage that threaten vessel integrity.
Marine Cargo Insurance Marine cargo insurance provides critical protection for goods
Who Needs Cargo Insurance?
being transported by sea, safeguarding against loss or damage during transit. This essential coverage addresses risks specific to maritime shipping: Theft and piracy incidents
Exporters Protect shipments until they reach international buyers
Water damage from storms or leakage Delays resulting in cargo deterioration
Importers
Concealed damage discovered after delivery
Ensure goods arrive safely from overseas suppliers
Loading and unloading accidents
Freight Forwarders Cover liability for client goods during transport arrangements
Additional Marine Insurance Policies Floating (Open) Policy
1
Provides continuous coverage for all shipments over a specified period, ideal for businesses with regular shipping activities.
2
Voyage Policy Covers a single shipment or voyage from origin to
Time Policy
3
destination, suitable for occasional shippers or unique cargo.
Protects against losses during a fixed time period (typically one year) regardless of the number of voyages undertaken.
4
Fleet & Single Vessel Policies Fleet policies cover multiple vessels under one
Port Risk Policy Specialised coverage for vessels while docked in port, addressing risks specific to stationary maritime assets.
5
contract, while single vessel policies focus protection on just one ship.
Choosing the Right Marine Insurance Coverage Assess
1
2
3
4
Maritime activity type and assets requiring protection
Evaluate Risks Consider cargo type, voyage duration, vessel size, and routes
Select Policy Scope Determine specific vs open coverage and total loss vs all risks protection
Include Liability Coverage Ensure protection against legal and environmental risks to third parties
5
Consult Experts Work with marine insurance specialists to create tailored solutions for your specific maritime operations
Conclusion: Securing Effective Marine Insurance Marine insurance serves as a crucial financial safeguard in the volatile world of maritime trade and transport. By strategically selecting appropriate policy types, maritime
Best Practices Conduct regular policy reviews as operations evolve
businesses can create comprehensive protection against the
Update coverage to reflect changing vessel values
numerous risks faced at sea.
Consider emerging risks like cyber threats and climate
Most operators benefit from combining multiple coverage
change
types4including hull, cargo, freight and liability insurance4
Work with brokers specialising in maritime insurance
to create a holistic risk management strategy.
Maintain detailed documentation to expedite claims
