Ocean Marine Insurance

1. Ocean Marine Insurance Everything You Need to Know About Protecting Your Property at Sea and In Transit 

2. The World Shipping Council states that the international shipping liner industry transported approximately 130 million freight containers with an estimated value of over $12 trillion in the year 2017.  • What if accidents were to happen, damaging valuable contents in the cargo? - The answer: Ocean Marine Insurance

3. What events can cause damage to cargo or the properties in it? • Crashing into objects or other ships at sea  • Pirate attacks  • Sinking  • Fire  • Capsizing • Barratry  • Jettisoning  • Bad weather 

4. What is Ocean Marine Insurance? • Ocean marine insurance is a type of commercial insurance that covers the risks associated with the transportation of goods across the ocean. • It covers the property in marine transport across both foreign and domestic waters, and the property in all the stages in the shipment, such as land or air transit associated with the marine shipment.   

5. What does ocean marine policy cover?   • Hull and machinery coverage Ocean marine insurance provides coverage to vessels, fixed machinery, and operating equipment from any sort of physical damage. • Example:   A fire breaks out in the ship due to an explosion in the engine. It damages the entire body of the ship. In this scenario, hull and machinery coverage will compensate the loss resulting from this fatal event.  

6. Protection and indemnity insurance Ocean marine policy provides coverage to thevessel owners from legal liability arising from bodily injury to the crew, passengers, or others while aboard the vessel. The liability can arise due to the following reasons:   • Vessel’s operation causing an injury, illness, or loss of life.  • Medical expenses resulting from an injury, illness, or loss of life.  • Expenses resulting from quarantine.  • Example: Many crew members fell ill due to an outbreak of flu on a ship. As a result, all the affected crew members were taken to the hospital for treatment after the ship docked at the port. Fortunately, protection and indemnity coverage will provide aid for all the medical expenses for the shipowner.  

7. Marine general liability insurance Ocean insurance protects the insured against liabilities that may arise from their marine or vessel operations. • Such liabilities can result from the following reasons:   • Collision • Incidents other than collision • Removal and cleanup of wreck   • Damage to cargo in specific situations   • Oil spill or civil pollution liabilities

8. Example: A container cargo collided with another container ship while in transit. As a result of the collision, the cargo that was on board of the other ship was severely damaged. In this case, marine general liability insurance covers the loss resulting from the collision.  

9. Ocean cargo insurance Ocean marine cargo coverage provides aid for losses arising from physical damage to the cargo. For instance, natural disasters, collisions, pirate attacks, cargo abandonment, or customs rejection can cause physical damage to the cargo. • As per a report by Logistics Management, 10,000 containers of 130 million shipped containers fall into the ocean every year due to severe weather and high seas, accidents, or incorrect stowage. • Ocean freight insurance Ocean marine insurance policy provides financial protection to the owner of the vessel if the cargo is damaged or lost. Moreover, it also covers shipping costs. • Example: A shipping corporation lost a valuable cargo during the shipment process. They will now have to face a substantial financial loss. Fortunately, freight coverage compensates for all the losses that they have to bear from this loss.

10. Common exclusions of ocean marine insurance • Passenger ships: Ocean marine policy does not include passenger ships in its coverage, for instance, ferries.   • Employee strikes, civil riots, or commotions: This policy does not include liabilities arising from employee strikes, civil riots, and commotions.    • War: This policy does not cover damages or liabilities resulting from war or war-like incidents. 

11. Cost of parts for repair: This policy does not cover the cost for repair of parts.   • Losses from shipping delays: This policy does not provide coverage for losses resulting from a delay in shipment.   • Willful misconduct: This policy does not cover losses resulting from mere negligence, reckless disregard, and willful misconduct.   • Ordinary wear and tear:  Ocean marine policy is not liable for damages resulting from natural wear and tear. Such wear and tear can be a result of hidden defects, insects, rust, depreciation, gradual deterioration, and heat or cold.  

12. Types of insurance that include ocean marine policy • General contractor insurance  • Farm insurance   • Entertainment insurance   • Truck insurance 

13. Factors that determine the cost of ocean marine insurance Loss history INCOTERMs Route risk

14. Destination risk Vessel’s type and construction Nature of the goods Policy conditions