For vessels venturing out to sea, there are a number of different types of marine insurance that can be useful to have. Depending on the shipping company and type, the type of marine insurance to get can vary. The options out there are numerous, which is why it’s important to know what’s what so that you can choose the best type for your needs. Here, we talk about some of the common types of insurance available to shippers.
Charterers’ liability cover
Shipowners are generally covered against liability to other vehicles. Most shipowners have liability cover that protects them in case of damage to cargo or a third party’s vessel. But these benefits are not extended to charterers. This is why they may choose to get charterers’ liability cover.
Charterers are also responsible for the owners of the ship for a number of reasons. It is their duty to ensure that the port that the ship is departing from is safe for operations. They are also responsible in case they carry hazardous cargo on the ship, which could lead to an accident such as a fire. Having liability cover for the charterer will protect them from paying for these claims out of pocket.
Hull and machinery cover
As charterers are most likely to take the previous type of insurance, shipowners are most likely to get hull and machine cover. This cover protects them from paying for ship repairs out of pocket, in case there has been some damage to the ship’s body or machinery. This is important to have in case your ship gets into an accident. Paying for repairs can end up costing millions. This insurance also covers furniture inside the ship, so it is useful to have in any case.
Owners and charterers can both take out cargo insurance. This cover protects those who handle cargo from having to pay out of pocket in case there has been an accident damaging the cargo. The cost of cargo can be sky-high. This is why it’s always necessary to have cargo insurance if you are going to be carrying goods. A comprehensive cargo insurance plan can include such cover against damage to the port structures from the impacts of the dangerous goods.
Freight and cargo insurance may sound similar, but in reality, they are different. Cargo insurance covers the goods being transported on the ship. Freight insurance, on the other hand, covers the cost of renting the ship. It provides indemnity for what the charterer owes the shipowner. In case an event happens where you are unable to pay the owner back, your insurance can step in and cover parts of the payment.
There are multiple risks of operating at sea, especially if you are carrying valuable goods. This is why getting multiple types of insurance is your best option. Not only should you get the four types of insurance mentioned above, but you should also get insurance that covers specific types of liability such as injury to crew.