What is Ocean Marine Insurance?

M.R. Anglin

Ocean marine insurance is insurance used to protect cargo, vessels and other items while they are being transported across the ocean. Both the vessel owner and the owner of the cargo are able to benefit from this type of insurance. Ocean marine insurance is not limited to ships, but can also cover items traveling by air and land as well. Since the cargo is being moved through international territories, this insurance is not regulated by any particularcountries.

Individual intermodal containers, and their contents, can be insured against loss at sea.
Individual intermodal containers, and their contents, can be insured against loss at sea.

There are different types of dangers that cargo may face when being transported from one country to another. Goods can be damaged while they are being loaded on or off the vessel. In addition, they can be broken en-route. People, including passengers and staff, can be injured, and the vessel itself can also be damaged. To protect against this, the vessel owner or the owner of the cargo can get different types of ocean marine insurance to compensate him in case of these damages.

Container ships may be insured against loss at sea or piracy.
Container ships may be insured against loss at sea or piracy.

Many types of ocean marine insurance exist: hull insurance, cargo insurance, and protection and indemnity (P&I) insurance. Each of these types of insurance covers something different. Hull insurance covers the vessel and machinery if they get damaged. Many times the coverage will include coverage for damage caused by stranding, sinking, fire, and collision. The insurance can be written for an individual voyage or can be written to cover a period of time.

Cargo insurance is used to protect the actual cargo that is being shipped. This type of ocean marine insurance can be either specific — covering certain damage — or all risk — covering a variety of incidences. Cargo insurance can also be special or open-ended. Special insurance is bought on a transaction to transaction basis. In contrast, open-ended insurance covers the cargo from where it is picked up to where it is going and is the most common type.

In order to protect the vessel’s owners against liability, protection and indemnity insurance can be bought. Protection and indemnity insurance is a kind of ocean marine insurance that covers liability due to damage to the cargo, death and injury to people, damage to piers, underwater cables, and other such items. Ocean marine insurers can also offer policies to cover pleasure crafts. This type of insurance can be referred to as yacht policies. Yacht policies from ocean marine insurers are usually used to cover larger vessels, while smaller vessels are mainly covered by inland marine insurers.

Various policies are also available to cover miscellaneous items associated with shipping. Some of these items are piers, docks, marinas, shipyards, and repair facilities. In addition, there are some incidences that are usually excluded for coverage under ocean marine insurance policies. Examples of such incidences are strikes, riots, acts of war, and confiscation. It is possible, however, to have these things covered by endorsements.

Maintenance facilities, like drydocks, may be covered specific ocean marine insurance policies.
Maintenance facilities, like drydocks, may be covered specific ocean marine insurance policies.

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Discussion Comments


When I was a little girl, my grandfather would take me to the docks to watch the large cargo ships get loaded. Some days were really cold, but we would bundle up and spend hours watching the large containers being lifted onto the ships and stacked.

My grandfather and I would play a game of what's inside the container. We would make up stories about what was in the containers and where the stuff was going and who would be there to pick it up. Both of us had large and vivid imaginations.

I don't know what was in all of those containers, but I do know that a ship with all of that cargo has to be heavily insured. I have no idea how much freight insurance the average cargo ship carries, but it has to be a fortune.


As of late, the cruise companies are the ones that have needed the ocean marine insurance. Not only do they need the insurance to replace their ships when they sink and stop running, but they also need insurance to cover all of their expenses when they have to refund all of the passengers on the cruises that go awry for one reason or another.


I wonder whether ocean marine insurance covers a ship being hijacked by pirates. That is a real risk, believe it or not. If you are like me, when you think of pirates, you think of the guys in the big flashy hats with eye patches and wooden legs.

Until I began reading all the stories about the new modern day pirates, I didn't know there were people who continue to make a living robbing ships. Of course, they no longer use cannons and swords. Automatic weapons and speed boats have replaced the old pirate tools. Either way, this is another reason for ships to have freight insurance.

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