Believe it or not, commercial marine insurance is the world’s oldest form of insurance. Its roots can be traced as far back as 16th century Europe. If you are in the marine business, it is important that you get the insurance you need in order to protect your assets.
Marine Hull Insurance covers damages done to the ship, engine boilers and equipment. These damages can occur as a result of an accident or from maritime perils such as fire, piracy, tsunami or volcanic eruption. In addition, if your ship damages a third party’s property your insurance company will guarantee it. This includes damages done by colliding with other vessels, docks or wharves.
Cargo insurance is governed by the Marine Institute and Trade Association. This association names different clauses for marine insurance policies. The first is the “A” Clause which covers any damage or loss to the cargo while it is being transported. The other clauses each cover very specific perils, but can provide wider coverage for these. For example, there is a clause that specifically covers piracy that takes place at the Horn of Africa.
The cargo may be covered either by the buyer or seller. If it is covered by the seller, it is known as “Free on Board.” “Costs, Insurance and Freight” (CIF) puts the insurance responsibility on the shoulders of the buyer.
Marine Hull and Cargo Insurance are two main types of insurance offered to the commercial marine industry and can help you to protect your business.