The ocean can be a hazardous place, with potential problems lurking at every turn. Storms, rough waves, underwater hazards, and others can pose problems for maritime transport. To help reduce the financial risk of companies in related marine industries, marine insurance policies can be created. Marine insurance commonly covers the loss or damage of ships, cargo, and ship terminals.
Since there are both commercial and personal aspects to marine insurance, the types of policies and coverage can vary widely. Commercial marine insurance can include cargo insurance, hull insurance, liability insurance, and freight insurance. Cargo insurance covers the cargo onboard the ship, as well as the belongings of the people on the ship. Hull insurance protects the costs of repair to the hull of the ship in case of damage, as well as much of the equipment and furniture on the ship that is not cargo. Marine liability insurance provides compensation if a ship crashes or collides. Freight insurance protects merchant vessel corporations from financial responsibility in the event of lost cargo from one of their ships. These commercial marine insurance policies can be broken down or have variants to allow for merchants the flexibility to create a marine insurance policy that fits the needs of their business.
For more personal marine insurance policies, coverage like cargo and freight insurance is not needed. However since boats and yachts can be significant investments, boat insurance is necessary to protect the owner from financial responsibility in case of an unforeseen event. Additionally, many states require boat insurance, just as most states require auto insurance to protect the monetary damages motorists can inflict on each other. Boat insurance is actually available as a form of marine insurance, or as an additional coverage on a homeowners’ insurance policy. Water craft liability insurance is the most basic form of personal marine insurance available. Water craft liability insurance covers damage to people or property due to actions on the boat, whether it is in the water or being towed to or from the water. Sometimes added to personal boat insurance is a medical payment insurance that covers medical expenses of the operator and passengers in the boat if they injured in an accident covered by the liability marine insurance. Wreck removal and pollution coverage is another recommended marine insurance addition to the standard boat insurance. After a boat is wrecked, removal is required in a timely manner. Depending on the damage to the boat and whether it has sank or not, this can be a costly undertaking, especially since the turnaround for removal must be expedient. Also, if any gasoline or oil leaks, the owner of the boat will be fined for the pollution to cover the cleanup costs. Wreck removal and pollution marine insurance coverage ensures these costly bills are not solely covered by the owner of the boat.
Similar to cars, many boating accidents take place within a short distance of the home port, so marine contractors’ insurance can be helpful coverage. Marine contractors’ insurance covers workers in the port or marina where the boat or ship is docked, sheltering the owner from costs if a dock contract worker is injured while attending to their craft.
Marine insurance can protect one of the most significant investments people make outside of their home. While the insurance coverage varies depending on the type of boat or ship and the purpose, the insurance can more than pay for itself in the event of an unforeseen accident.