Insurance Marine Business And Cargo If you operate a marine business or regularly ship cargo overseas, you should consider purchasing ocean marine insurance.
The following types of businesses are especially exposed to maritime risk and may need specialized marine coverage:
Insurance Marine Businesses And Cargo
- Marine service providers—including shipyards, builders and repairers, dealers, terminal operators, stevedores and others.
- Marine transportation providers—operators of any type of water vessel.
- Businesses dependent on overseas shipping—such as commodities traders, freight forwarders, importers and exporters, manufacturers and others.
Types of coverage
Marine insurance is a broad category that includes several types of specific coverage. An insurance professional who specializes in marine insurance can walk you through potential risks and available insurance products. Key coverages include:
- Cargo insurance—covers product losses when products are being transported overseas or warehoused prior to or following overseas transport.
- Hull and machinery (H&M) insurance—coverage for damage to a vessel’s hull, machinery and equipment caused by collisions and other ocean perils.
- Marine liability insurance—broad business liability coverage for specific types of marine businesses, such as boat dealers, rental companies, shipbuilders, terminal operators and others.
- Marine pollution insurance—covering costs associated with pollution from fuel spills and other events. Some pollution coverage may be added to a general marine liability policy.
- Protection and indemnity (P&I) insurance—often offered in conjunction with marine hull insurance, this covers ship owners against liabilities for property damage and bodily injury.
Additionally, shipyards, terminals and other marine facilities often purchase specialized “bumbershoot” policies, which provide umbrella coverage for a range of risks, including liability, collision and salvage costs.
Recognizing coverage limitations
Marine insurance policies include limitations in coverage amounts and types of incidents covered. While certain events may not be covered by a standard policy, you may be able to supplement your policy with special riders or endorsements. Exclusions may include losses caused by:
- War or military action.
- Riots or other civil strife.
- Mold, mildew and dampness.
- General wear, tear and weathering.
- Marine life.
Bear in mind, too, that marine cargo insurance covers losses when products are transported overseas by ship or airplane. That coverage ends when products continue their journey overland by rail or truck.
Insurance Marine Business To continue coverage for ground transportation, you’ll need an inland marine policy. Some insurers also offer worldwide cargo policies that combine all forms of transit. Talk to your insurance professional about the best options for your business.
Note also that specific war risk insurance is available to both marine and aviation businesses. This type of policy covers damage due to acts of war, including invasion, insurrection, rebellion, and hijacking. Some policies also cover damage due to weapons of mass destruction.
The majority of ships are insured against piracy under their war risks coverage; however, stand-alone piracy coverage is also available. In some cases, the risk of piracy may be covered under a ship’s Hull and Machinery (H&M) policy.
Don’t let the term “inland marine” confuse you. As opposed to “marine insurance,” which covers products when transported over water, inland marine insurance covers products, materials and equipment when transported over land—e.g., via truck or train—or while temporarily warehoused by a third party. Collisions and cargo theft are the two most frequent causes of inland marine losses.
Does your business need inland marine insurance?
For many businesses, the property insurance provided by your Business Owners Policy (BOP) or Commercial Package Policy (CPP) may be sufficient. In general, these types of insurance cover property housed at a specific location, but tools and equipment that travel with employees to nearby job sites may also be covered.
Insurance Marine Business However, if your business frequently ships products or equipment, you may want to consider purchasing inland marine insurance. This type of coverage is especially important if you ship high-value products or materials, which are often excluded from basic property coverage. Inland marine insurance can cover a wide range of specialty equipment and products, including:
- Computers, everything from servers to laptops.
- Communications and networking equipment.
- Construction and contracting equipment.
- Medical and scientific equipment.
- Photography equipment.
When weighing the need for inland marine insurance, consider the nature of your business and operations. Inland marine insurance isn’t just for companies that ship products to retailers and customers. For example, if you have a valuable tradeshow booth that is frequently shipped around the country and stored offsite by a vendor, you may want the protection provided by inland marine insurance. In addition, if someone else’s property is temporarily in your possession, inland marine insurance can provide coverage against the loss of this property. Special inland marine coverages include:
- Bailee’s Customer Coverage—Protects clients’ property that is left in the care of your business; e.g., if you operate a warehouse or repair shop.
- Builder’s Risk—Protects structures and materials during new construction projects or renovations.
- Exhibition and Fine Art Coverage—Keeps valuable items protected while on exhibit, in transit or on loan.
- Installation Floater—Covers materials from the moment they are loaded onto a truck until they are put to use or installed.
- Motor Truck Cargo Coverage—Keeps clients’ goods protected while your business transports and delivers them.
Your insurance professional can help you determine whether or not purchasing inland marine insurance makes sense for your business. If you opt for this type of coverage, your insurer may provide services to help you evaluate and minimize your inland marine risks and control losses. Insurance Marine Business