Marine Cargo Insurance

Marine policies relate to three areas - hull, cargo and freight - and insure against the ‘perils of the sea’, which include sinking, stranding, heavy weather, fire, collision, thieves and piracy.

  1. Hull - this relates to the vessel itself and its machinery. Cover also incorporates pollution hazard and three quarters collision liability. The remaining quarter, and all other forms of liability, are catered for by mutual associations known as Protection and Indemnity Clubs. The main exclusions are damage caused by strikes, malicious acts and nuclear radiation
  2. Cargo - this relates to goods or merchandise being carried by a ship. Usually insured on a warehouse to warehouse basis. Cover is often on an all risks basis and must reflect the term and conditions of carriage.
  3. Freight - this refers to the cost of transporting the goods, or for hiring a vessel.

It is now common for marine insurance to be arranged on an 'all risks' basis, although there may be specific exclusions. Some covers are still arranged on a 'specified perils' basis, which only provides cover for those risks referred to in the policy wording.


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