Ocean Marine Insurance Basics

Ocean Marine Insurance is generally regarded as the oldest form of insurance. In fact, the term ‘underwrite’, which dates back to 1430, was literally the practice of accepting risk for the transit of ocean vessels and their cargo by signing your name under a contract listing a description of the shipment. Today, ocean marine insurance policies are used to cover watercraft of varying descriptions (hull coverage), cargo and liability related to various marine activities. The common policy types that fall into the broad category of ocean marine insurance include: Hull Insurance, Marine Cargo Insurance and Yacht Insurance.

Cruise liners, pleasure yachts, huge container ships, tugboats and more are eligible for this type of policy. In fact, offshore oil rigs are also protected by this variety of insurance. Despite the fact that the insurance category specifically references ‘ocean’ not only sea going vessels are covered by ocean marine insurance. Vessels plying inland waters and other related risks are also protected by this kind of coverage.

Goods shipped by water are often offloaded and reloaded to and from land based transportation. An ocean marine policy will cover goods during the entire process including during land transit or temporary storage on land. Typical causes of loss (perils, insured against), include sinking, stranding, heavy weather, collision with other watercraft or submerged objects, fire and explosion. Coverage for excluded perils, like acts of war, can sometimes be bought back.

Ocean Marine Insurance is typically purchased by the owner of a vessel but may be purchased by any party with an interest in insurable property subject to maritime perils. In this way, even land locked businesses may find themselves in a situation where ocean marine insurance is called for.

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