January 17, 2022

Marine Hull and Machinery Insurance

Marine Hull and Machinery Insurance

Marine Hull and Machinery Insurance covers a ship's physical body against damage or destruction due to a number of risks, such as fire, capsizing, explosion, stranding, piracy, and any other accidental damage.

A large part of our global economy is supported through import and export of goods via marine vessels like container ships, bulk carriers, tankers, etc. These vessels are responsible for facilitating international trade and thereby boosting their country’s economic growth and prosperity.

In fact, according to the Ministry of Shipping, around 95% of India's trading by volume and 70% by value is done through maritime transport. Marine cargo vessels are extremely expensive and carry vast quantities of valuable goods. There is no doubt then that any damage to these vessels can cause great losses for shipping companies.

Hence, it is paramount for shipping companies and export/import businesses (that own maritime vessels) to purchase Marine Hull and Machinery Insurance. This is a comprehensive insurance policy that covers marine vessels against various risks like fire, burglary, piracy, natural disasters, collision with other ships, among several others. This insurance is called ‘Marine Hull’ as it specifically covers the main body (outer portions) of a maritime vessel.

Hull Insurance also includes fixtures attached to the ship hull (the main body) as a functional part. It covers all kinds of water-going vessels such as bulk carrier ships, cruise ships, tankers, yachts, fishing boats, jetties, etc.

Let’s examine some of the inclusions and exclusions under a Marine Hull Insurance policy in detail.

Marine Hull Insurance covers all types of nautical vessels including ocean-going vessels, coastal and inland vessels, port craft and sailing vessels along with their machinery, fittings and freight.

Damage to these vessels due to risks like fire or explosion, sinking, stranding, capsizing, derailment, burglary, jettisoning, piracy, collision with other vessels/aircraft/land vehicle/fixed or floating structure, earthquake, volcanic eruption or lightning are all covered.

This policy covers the following costs :

  • Salvage and salvage charges
  • Sue and labour expenses that are reasonably incurred to prevent loss of or damage to the insured vessel due to a covered peril
  • Legal costs
  • Costs incurred in respect of third party liability (if this cover has been opted for)
  • Dry docking expenses
  • Disbursement losses
  • Costs for marine surveys to assess potential damage
  • Ship-breaking losses


On payment of additional premium, you can avail the following add-on covers :

  • Terrorism coverage
  • Third party liability coverage (bodily injury or property damage)
  • Business interruption
  • Removal of debris
  • War, strike, riot and civil commotion

These covers form a part of the policy’s exclusions unless specifically opted for.

Some costs and risks excluded from a Marine Hull Insurance policy are :

  • Insolvency or financial default of the vessel owner / operators / charterers
  • Ordinary loss in weight or volume or ordinary wear and tear
  • Damage due to a nuclear attack or radioactive contamination
  • Damage due to pollution
  • Willful and intentional misconduct
  • Costs, expenses or any commercial losses whatsoever arising from normal  trading activity or operation of the insured vessel
  • Fines, penalties, punitive or exemplary damages
  • Any violation of current regulations, laws, or trade practices

Please note - the specific inclusions and exclusions of a Marine Hull and Machinery Insurance policy might differ from insurer to insurer as per their policy wordings. There are only a few insurance companies in India who offer Marine Hull Insurance - HDFC Ergo and United India Insurance to name a few.

Marine Hull and Machinery Insurance is extremely beneficial for all maritime ships, tankers, carriers, and boats. Some insurers also cover damage to premium vessels such as yachts, cruise liners and other pleasure boats. This kind of complete financial protection against a wide range of risks can provide shipping corporations, business owners, and traders a sense of security while operating in international or domestic waters.

Marine Hull Insurance only covers the physical body of the ship. But, what about the cargo carried by the ship? That is covered through Marine Cargo Insurance!

Opinions, conclusions and statements of intent expressed in this article are that of the author and Verak does not accept liability for the views expressed unless confirmed by an authorized representative of the Company independently of this communication.