Marine insurance protects against business losses incurred during water transport operations. It is the oldest form of insurance, protects shipping companies and cargo owners against the loss of a ship and/or cargo. It is a contract of indemnity whereby the insurer or the underwriter agrees to indemnify the assured against marine losses in consideration of a monthly payment called the premium. In the maritime industry, the risk is high as there is the potential risk of losing expensive cargo or valuable ships as well as the risk of damage to the environment as a result of oil pollution and the risk of losing seafarer lives due to accidents. In short, marine insurance policies are designed to cover loss or damage caused to boats and other watercraft.
The object of an insurance contract is to place the assured after a loss in the same relative financial position in which he would have stood had no loss occurred. Marine insurance helps to manage risks in the event of an unfortunate incident like accidents, damage to the property and environment, or loss of life. It is very important because, through marine insurance, ship owners, and transporters can be sure of claiming damages especially considering the mode of transportation used. It 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.
Hull Insurance – offers protection for physical damages to the boat or vessel along with its operating equipment, including machinery. Shipowners insure their vessels and the equipment on board against the risks of damage or loss by taking out a hull and machinery policy. 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 traveled as part of the shipment process. It protects the cargo owner against damage or loss of cargo due to ship accident or due to delay in the voyage or unloading.
Marine Liability Insurance – It includes coverage for injuries, illnesses, or even loss of life caused by vessel operation. These could include damage or loss of cargo, personal injury, oil pollution, wreck removal, and casualty management. Medical expenditures, damage to other vessels and cargo, collision incidents, and related expenses as a result of quarantine may also be covered.