What Are the Different Types of Marine Insurance?

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  • Written By: Melissa Barrett
  • Edited By: Lauren Fritsky
  • Last Modified Date: 12 August 2019
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Marine insurance is basically insurance relating to boats and travel of cargo over oceans. The two main categories of marine insurance are cargo insurance and hull insurance. Cargo insurance is most often purchased by the owner of the goods to be shipped rather than the owner of the vessel. Hull insurance is most often purchased by the owner of the vessel.

The laws regarding the shipping of goods by sea are fairly standardized internationally. One set of laws that affects the transport of this cargo are the International Convention Regarding Bills of Lading, commonly referred to as the “Hauge rules." These statues limit the financial liability of a shipper to the owner of cargo for damage occurred during transport. To protect themselves financially, many manufacturers purchase marine insurance for their goods.

The most inclusive cargo insurance is an all-risk policy. Basically, this type of policy covers damages up to the full value of the shipment in any circumstance that is not specifically excluded. Typically, these exclusions are based on conditions such as loss resulting from poor packaging or abandonment of goods, where clear fault can be assigned.

Total loss insurance protects against the complete loss of cargo but not against damages. This coverage is typically much less expensive and used when some degree of damage to the shipment can be reasonably expected. Bulk goods such as grain are most often covered under this type of marine insurance.


Hull insurance is designed to protect against damages to the vessel itself. These policies are like all-risk cargo policies in that they generally protect against all conditions that aren’t specifically excluded. In many cases, hull insurance protects against all equipment required to operate the ship as well as the body of the craft itself.

Policies for hull insurance are generally time-specific. In some cases, the coverage only extends to the length of a specific voyage. In practice, recovery under these types of policies is often more limited. In these policies, there is an assumption of sea-worthiness at the time of insurance issuance. Any damages that can be traced to a problem that predated the policy will often be denied.

In contrast, hull insurance bought by time period often ignores the condition of the ship at the time of policy purchase. In many circumstances, this marine insurance is renewed while a vessel is at sea. Since many repairs and preventative maintenance services can only be preformed while a ship is docked, it would be impossible to ensure the complete health of a vessel that has already been put to sea.


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