What is Marine Insurance?
Marine insurance covers risks from sea transport, protecting the ship, cargo owners, cargo damage, collisions, and piracy.
Types of Marine Insurance
- Hull insurance: taken by the ship owner to cover the ship and equipment against fire, bad weather, or collision — made up of voyage policy and time policy.
- Cargo insurance: covers cargo against loss or damage, borne by either the importer or exporter (not both), so it’s a “particular average” loss.
- Freight insurance: taken by ship owners to cover claims from exporters whose goods reach the wrong destination.
- Ship owner liability insurance: covers claims from third parties, e.g. damage to a dock or another vessel, harm to a passenger, or pollution.
- Floating (open) policy: taken by someone who regularly loads goods at sea.
Types of Marine Loss
- Total loss: the ship or cargo is completely lost or destroyed — either “actual total loss” (destroyed or sunk) or “constructive total loss” (damaged beyond value).
- Partial (average) loss: the ship or cargo is only partially destroyed — either “particular average” (from fire, accident, or collision) or “general average” (deliberate loss, e.g. throwing cargo overboard).
General vs Particular Average
| General Average | Particular Average |
|---|---|
| Loss is voluntary | Loss is accidental |
| Shared by all parties | Borne entirely by the cargo or ship owner |
| Example: jettison | Example: hull insurance claim |
