An Insurance Primer for Shipping Companies

Marine vessels, like vehicles, require insurance against damages. Not only do these accidents cost money for owners, but they can also cost business profits and lives. For this reason, arrangements like liability insurance are available to eligible boat owners. Akin to vehicle insurance, getting a marine vessel in this arrangement lets boat owners save up on repair costs. As with the typical insurance, however, boat owners are expected to know the limits of its coverage. Here’s a breakdown of factors surrounding marine insurance.

The Responsibilities of Boat Operators

Before getting permission to operate a boat, people are required to a series of tests. These typically include drug testing, safety equipment, and licensing, and the like. These operators will also be responsible for negligence and the damages that it can result in it. For instance, a crew member or passenger might get hurt. This is a situation that insurance coverage can alleviate.

Insurance for Shipping Companies

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To put things in context, consider companies that charter a vessel for shipping products. Leasing or hiring a vehicle or vessel for temporary use causes risky situations for these charterer companies. The ship they temporarily hired might become damaged or entangled in legal matters that can compromise their business operations. This will be a hassle for the chartering company, the third party that owns the hired vessel, and the company’s clients. It has, therefore, become a given in the shipping industry to avail a charterer’s insurance to prepare for such hassles.

Coverage of Vital Ship Components

Insurance covers the vital parts of a shipping vessel, such as the hull and machinery, in case of disasters. These areas can get damaged in case the ship encounters a collision, catches fire, or sinking. If so, their components such as electronics, engines, and deck machinery will need repairs. However, normal wear which happens over time, or damage due to improper maintenance or negligence mentioned beforehand will not be covered anymore. Coverage of certain vessel parts is different from company to company.

Considerations Involving People

The coverage specifics for people onboard the ship are different from ship components. For instance, crew members and passengers might get covered by the vessel insurance, but divers will not. Good coverage includes medical payments for, but the limit can vary among companies. Personal effects that get lost or damaged will also get covered, enabling crew members or passengers who lost items to get compensation. With the coverage in effect, a form of “damage control” is expected, in that those involved in the ship when it got damaged will not sue or file claims anymore.

To sum things up, ships benefit from insurance coverage the same way vehicles on land do. This explains why business people in the shipping industry, such as companies who hire vessels for use, are expected to avail of these insurance arrangements. By doing so, everyone or everything on the ship is accounted for in case of untoward incidents. It’s an investment that mitigates damage for the crew members, passengers, and shipping companies.