What does Marine Hull Insurance cover?
Marine Hull Insurance covers physical damage to a ship (the hull and machinery) caused by various named perils. The most important ones covered are: perils of the sea, fire, explosion, theft, piracy, jettison, earthquake, volcanic eruption, and physical damage caused by negligence of the master, officers, crew or pilots.
What are the major exclusions?
Standard Hull & Machinery Insurance is a named-peril policy, and all the perils not specifically mentioned are excluded. However, the most important ones are machinery breakdown not caused by any insured perils, liability to third party (except collision liability which can be covered for 3/4th portion), liability to crew, environment, pollution, war, and loss of hire.
How do I cover such risks?
Liabilities to the third parties, crew, and pollution liability can be covered under a separate Protection and Indemnity Insurance. War perils can be covered under a separate War Insurance policy. Loss of Hire/ income after damage to the vessel due to insured perils can be insured under a Trade Disruption Insurance/ Loss of Hire Insurance cover.
What factors does the premium depend on?
The insurance premium is a function of various factors including type of vessel, age of vessel, classification society, flag, trading area, experience of owners/managers, fleet size, claims experience for last 5 years, and possible future acquisitions.