Hull and machinery insurance is an insurance policy specially designed for covering ship damage expenses. Where the ‘Hull’ refers to the main body of the ship. Understanding Marine Hull insurance Policy as car insurance, with a difference of being for a water-faring vehicle instead of land.
What does hull insurance Insurance cover?
Hull insurance includes fixtures attached to the ship hull as a functional part, into the definition of the hull. Since the policy mostly applies to water-going vessels, it is more popularly called Marine Hull Insurance and is a part of marine insurance.
It covers all types of vessels operating in the oceans, lakes, and rivers like bulk carriers, fishing boats, ships, tankers, cruises, yachts, jetties, and wharves.
The policy plays an important role in helping boat owners to secure their vehicles against machinery damage and destruction of hulls, fittings, liabilities, etc.
Mainly the policy insures against the following perils of the sea:
- Destruction of hull
- Damage to machinery
- Disbursement losses
- Ship-breaking losses
- Fittings and freight
Hull insurance policies can also include third-party liability such as cover for losses or damages caused by your vessels to other ships or boats, or injury to the ship workers.
Case on Hull Insurance Policy
Couch Adventurer Ltd. operates three ocean liners equipped with five-star facilities. The ships are large and have multiple safety features, apart from satellite connectivity and ocean early warning systems.
A crew manned each ship with approximately 200 on a normal workday and carries a maximum of 1000 passengers. Since any accident leads to a huge loss of public life. Therefore, the license of Couch Adventurer insured the ship with a comprehensive marine hull policy.
The policy not only covers damages to the ship due to a mishap, but it also covers the compensation payable to the employees and tourists on the ship.
The company also maintains contingency funds to meet with certain expenses not covered by the insurer. Such as injury to passengers or crew members while boarding or debarking the ship on a pier, etc.
Hull Insurance & Financial Safety of Shipper
Godavari Shipping Ltd. is the second-largest shipping company running river transport in the country. The firm manages 20 river vessels including 5 with passenger-carrying capacity.
In some areas, the company reported, damaged ships due to collisions with other boats and fishing vessels.
Also Check: What is not covered under marine insurance?
To recover such losses, marine hull insurance is a must for the firm. At times, facing issues such as a discarded fishing net stuck in the underwater turboprop blades. As a result, the ship had to be under repairs.
Such incidents not only increase the cost of repairs and operations but also cause the firm to lose part of its revenue due to the cessation of operations of the ship.
Losses due to claims payable to third parties after collision with their vessel are rare but also covered by the hull insurance bought by the company.
Other than that, Godavari provides sufficient training to their staff for better performance and emergency handling processes as well, which helps in reducing avoidable losses.
The firm faced a situation where the ship’s crew had to abandon some of the goods midway to save the vessel and remaining cargo. They had to disburse the repair cost for an emergency repair at the next port. Which was not the destination port and had to pay general average liability for the lost goods.
About The Author
Simran
MBA Insurance and Risk
With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.
