What Are the Classifications Of Marine Insurance?

Most common types of insurance are rather easy to obtain in modern times. Car insurance and homeowners insurance can be found from most big-box insurance retailers you see on the news every day in a variety of different packages. Marine insurance, on the other hand, is not so simple. Marine crafts are some of the hardest to cover due to the myriad of issues that can happen both to the craft itself and also while at sea.

Before you get a marine insurance plan for your marine business or crafts, it is very important to understand the different classifications of marine insurance. To start, let’s take a look at what marine insurance is in simple terms.

What Is Marine Insurance?

Marine insurance is an assurance to the policyholder that the goods dispatched from the country of origin to the destination are wholly insured and protected. Marine insurance typically covers the loss or damage of ships, cargo, and terminals, and it includes any other means of transport by which goods are transferred, acquired, or held. These plans can differ widely, and the policy you get should be personally tailored to the unique needs of your marine operation.

The Three Main Classifications Of Marine Insurance

The three most common types of marine insurance are hull, cargo, and protection and indemnity (P&I). There is no such thing as a standard marine insurance policy. That is, not all marine insurance plans are built the same. Different companies insure against different risks depending on the unique needs of each client they work with. Additionally, marine insurance providers may use their own types of custom policies or they might use forms issued by other entities.

Hull Insurance

Hull insurance is part of the marine insurance policy that covers the physical damage to the craft itself. There are a variety of different types of coverage in this area that depend on your craft’s unique details and the type of operation you are involved in.

Different policies exist for different types of crafts. These include fishing boats, tugs, barges, yachts, large commercial vessels, and passenger-carrying vessels. The coverage may apply for a certain period of time or just one voyage. Coverage under a hull policy usually falls under either an “all-risk” or “named perils” category.

An “all-risk” policy covers all risks of physical loss or damage to a vessel from an external cause, while named perils cover physical loss or damage from the perils that are specifically named in the policy. Common exclusions to these can include wear and tear, ice, and improper/inadequate maintenance. Typical named perils that companies often automatically use will include inclement weather, fire, pirates, and other perils that may be unique to your operation.

Cargo Insurance

As the name suggests, cargo insurance involves coverage for the goods and products that your marine craft is responsible for shipping. These policies often go into effect as soon as the voyage begins and cover a wide range of risks. Every operation will have its own risks, however, which makes it very important to have this section customized to the unique risks you face. For example, you may need specialized terms in your policy for refrigerated or other special types of goods.

Protection And Indemnity Insurance

P&I covers the vessel owner’s liability for injury to or death of persons aboard the insured vessel. This is simply a insurance version of typical liability insurance for the owner and operator of the vessel. P&I policies also cover liability for injuries or death suffered by persons on shore caused by the negligence of the vessel’s crew. The liabilities found in this section, as with the others, are subject to customization based on the unique risks that you and your agent deem important to your operation.

Why Marine Insurance Is Important

Not only can insurance save you tens of thousands of dollars toward lost goods or the expensive parts required within most boats, but it is also required in many different import-export trade and shipment operations. Having marine insurance protects the cargo you are responsible for, the crew, as well as the craft that transports everything. Additionally, it can also cover accidents or blunders that happen on account of your crew. They are only human, after all!

If you are looking for a professionally designed marine insurance policy, be sure to work with a company that will help you identify the unique risks that your marine operation faces. This way, you can be sure that your policy will cover you where it counts and comes in at an affordable price.

Work With JMG Insurance Today

JMG Insurance Corp is a full-service business, personal, and specialty insurance agency. Their team strives to provide personalized and comprehensive coverage plans for their valued clients at the best possible price tag.