The vast majority of international freight (90%) is transported around the world by sea with more than 70% in containers. Unfortunately, merchant shipping isn’t always the safest form of transportation; there were 88 major accidents involving merchant shipping reported worldwide in September 2019, and five ships were lost.
To bring this closer to home, most of us remember the containers lost from the YM EFFICIENCY along the NSW Central Coast, after hitting bad weather on its trip from Taiwan to Sydney in June 2018. More recently, a Chief Officer onboard the cargo ship YALIKOY died after being hit by a snapped mooring line on Oct 8th in Spain, the bulk carrier RT HON PAUL J MARTIN ran aground on Oct 6th in the St. Lawrence Seaway while on its way from Port Weller to Quebec and a mobile crane fell onto the ASTRA MARINE’S cargo deck in Turkey on Oct 7th.
All of these disasters, mean that marine insurance is a priority, but what type of insurance do you need?
Marine Insurance is designed to provide peace of mind when you have a ship, vessel or marina that requires insurance, or you are moving your cargo across sea, land or air.
Marine Cargo Insurance
Marine Cargo Insurance covers the loss or damage of goods in transit, generally due to theft, collisions, fires and explosions, and stranded or sinking ships. Whilst this type of insurance lowers the risk of loss or damage to cargo, there are three different types of Marine Cargo Insurance available:
- Open Cover Cargo: This policy either covers goods to a specific value for a specific time period (single trip voyages) or multiple shipments with no specified value during the policy period.
- Specific Cargo: This policy covers one consignment for one voyage and ends when the cargo arrives at its destination.
- Contingency Cargo: This policy is used by freight brokers to reduce their risk when the carrier of the policy refuses to honour a claim against damage or loss of cargo.
Commercial Hull Insurance
This policy is designed specifically for businesses who operate commercial vessels where their vessels are the centre of their business (namely charter boats, barges, ferries etc). Commercial Hull Insurance covers you for accidental damage or sinking (in the case of sinking, the vessel must be in a sea worthy condition prior to sinking), malicious damage and theft, and any liability resulting from use of the vessel. Due to the nature of their businesses, many marine operators need both Marine Cargo and Commercial Hull Insurance.
Marine Liability Insurance
Similar to third party auto insurance, Marine Liability Insurance reduces the risk of damage to third parties (property and personal injuries). These include collisions with other ships (in transit or stationary) and removal of wrecks, but can also cover collisions with terminals, docks and piers. It’s suitable for ship repairers, import and export marine businesses, yacht owners, port and marina operators, charter service operators, docking facilities, and so on.
Ensuring that you have the correct type of Marine and Hull Insurance is the first step to protecting your cargo when in transit if something were to go wrong. To decide what type of marine insurance is suitable for your business, contact your local insurance adviser today.
General Advice Warning
The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.