If you operate a business at sea, you should consider taking on some form of marine insurance. At the very least, you’ve probably asked yourself, what does a marine policy cover? Essentially, this type of insurance covers losses or damages that happen to goods transported across the world – whether that’s by road, rail, sea, or air.
Whether you’re a self-employed engineer or running a large-scale port, marine insurance guards against the unexpected and can save you from significant financial damages – particularly in a setting prone to weather hazards and other challenges that can impact you significantly.
For businesses that import or export goods – such as shipping companies or couriers – marine cargo insurance products can go one step further, providing an extra level of service. We understand that no one shipment is the same, which is why at Arkwright Insurance we’re able to provide specialist cover and competitive premiums, all thanks to our extensive insurance network.
Below we explore some of the marine insurance policies available to you and exactly what a marine policy covers.
What Types of Marine Insurance Are Available?
Marine insurance is typically used as an umbrella term for a range of different products – covering everything from the vessel itself to the cargo or freight that’s onboard.
The common types of products are:
Hull Insurance: This covers the vessel itself in the event of losses at sea – focusing mostly on the torso or hull of the vessel as well as any personal contents that are onboard.
Machinery Insurance: This type of cover protects essential machinery onboard the vessel, in case there’s accidents or damages during operation. Generally, Machinery Insurance and Hull Insurance will come under one policy – Hull & Machinery.
Marine Cargo Insurance: One of the most important forms of insurance, cargo insurance specifically covers the cargo carried by a vessel rather than the vessel itself. This type of policy will usually protect the cargo owner against any losses or damages due to accidents, delays or issues unloading. You may also find that Marine Cargo Insurance products have third-party liability, which protects against damage to the port or terminal, ship and any other transport that carries the cargo – usually via rail or road.
Marine Liability: If your policy doesn’t include third-party liability, you can take out a separate marine liability policy. The coverage by marine liability products will usually include any liabilities that arise from loss of life, injury or damages.
Freight Insurance / Liability: Similar in nature to Marine Cargo Insurance, if you’re carrying freight aboard your vessel, freight insurance offers protection in the event your ship has an accident that could cause losses.
Outside of the products themselves, there’s also a variety of marine trade insurance policies typically offered to clients, ensuring you have complete flexibility over your cover. Some of the marine policies include:
Voyage Policy: This is a policy that simply provides marine insurance for a specific type of voyage.
Time Policy: This form of insurance generally offers the same protection as a voyage policy but for a specific time period instead of a specific voyage – they’re usually valid for a year.
Port Risk Policy: An insurance policy that’s fairly straightforward – it protects the vessel while it’s harboured in the port.
Valued or Unvalued Policy: Regardless of which you opt for, these policies cover the cargo and consignment onboard the vessel. The difference is whether you have the cargo valued beforehand or not. An unvalued policy doesn’t have the value of the cargo in the policy beforehand, while a valued policy does.
Single Vessel or Fleet Policies: These policies cover your vessel(s) depending on how many you have. As you might expect, a single vessel policy insures one ship, while a fleet policy can cover multiple vessels under the same policy. Single vessel insurance is usually chosen by small shipowners.
What Does a Marine Policy Cover?
So you have an idea of the products out there but what does a marine policy cover? At a base level, it protects against cargo losses, damages caused to ships, ports, terminals or any other transport that may carry the cargo.
More specifically, different policies can cover:
–Loss or damage to goods during transit
– Ship related incidents, including sinking, grounding or colliding with another ship
– Incidents relating to other transports such as truck, train or plane
– Damages during loading/unloading
– Damages during storage
– Fire or explosive damage
– Natural disasters
– Total loss of any goods lost overboard or dropped during loading
While most marine trade insurance policies will cover the basics, the majority of cover mentioned above will be covered in more specific marine cargo insurance products, something we’re able to provide here at Arkwright Insurance.
Things that aren’t commonly covered with your insurance – particularly those involving cargo – tend to include; goods being damaged due to bad packaging, goods spoiling, dangerous goods such as ammunition or chemicals, losses due to transport delays, cargo leaking, wear and tear of products, transit delays that could affect goods, using an ‘unsuitable’ vessel (which can sometimes still be claimed on) or loss/damage caused by financial challenges.
Something to consider is that many policies have specific clauses relating to cargo. Generally, Institute Cargo Clause (A) offers the widest coverage and protects against the majority of the issues mentioned above.
Why Do I Need Marine Insurance?
Shipping is vital to supply chains across the world – nearly everything we eat, use or wear has probably been imported at some point.
Cargo damage can always occur – especially during loading – and over 3,000 cargo containers were lost at sea in 2020 due to the unpredictability of sea transport. From freak accidents to natural disasters, there’s always a risk, which makes marine trade insurance a key product for most people operating at sea.
There are also other challenges specific to naval transport that can occur – namely pirates. While it might sound like a joke, piracy is still an issue in some parts of the world and often your insurance can protect against that.
Are you – or someone you know – looking for marine insurance products? Here at Arkwright Insurance, we can help you find the perfect policy. Please feel free to share this article with any of your network that may be looking for specialist help when it comes to this type of insurance
For a quote or to discuss your individual requirements call us on 01204 392 525 or email us your details at Quote@arkwrightinsurance.co.uk and one of our agents will call you back.