Risk & Business Magazine Bowen Miclette & Britt Spring 2017 | Page 31

MARINE INSURANCE
Marine Insurance:
M
arine insurance is a
specialized coverage created
to insure marine vessels
that, incredibly, dates all
the way back to the Middle Ages. In
the 1600s, marine insurance contracts
were underwritten by individuals, not
corporations. Many of these individuals
were bankers or lenders and engaged
in both lending and insurance but as
separate transactions. The practice
was to carry a policy around to each
individual to sign off on a share of the
risk, which led these risk takers to be
known as “underwriters.” Today, as in
the early days, underwriters in London
still carry around a slip to individual
underwriters to have them agree to
cover a percentage of the risk, agree to
the proposed terms, and sign off on the
slip or contract.
There are two basic types of marine
insurance: Ocean Marine and Inland
Marine.
OCEAN MARINE INSURANCE
Ocean Marine insurance covers many
types of vessels including, but not
limited to, ocean going vessels, cargo
ships, offshore supply vessels, utility
vessels, tugboats, barges, drilling rigs,
and crew boats. Marine insurance can
range from either very basic to very
broad, depending on the level of risk.
There are many extensions of coverage
A Primer
that can be added to include risks and
exposures relating to vessel operations
and the specific liabilities associated
with the industry.
The most common types of Ocean
Marine insurance include Hull
& Machinery and Protection and
Indemnity (P&I). Hull & Machinery
covers the actual asset or investment of
the owner — the “property” — including
the hull, furniture, supplies, stores,
tackle, equipment machinery, and
boilers. It also extends to equipment
that has been installed for use on board
the vessel that the owner or operator
has assumed responsibility for. By
purchasing hull insurance, the owner or
operator is protected against expenses
incurred in repairing or replacing
the property if it is damaged, lost, or
destroyed.
P&I is a broad type of coverage that
includes allowances for loss of life;
injury and illness; damage to other
vessels or onboard property; damage to
piers, docks, jetties or other objects; and
loss of, or damage to, cargo on board
and in other areas. Extension clauses
are endorsed onto the basic policies to
broaden coverage as needed.
INLAND MARINE INSURANCE
Inland Marine insurance covers land
risks and was initially developed for
property in transit by rail, and later by
motor truck. Today’s Inland Marine
policies — or “floaters” — have been
broadened to cover all types of property
while in transit, whether waterborne
or anywhere in the policy territory.
For example, a Commercial Equipment
Floater would cover equipment owned,
rented, or leased by a company, such as
motorized equipment or self-propelled
vehicles. Basic coverage includes any
equipment the company uses for its
operations and, therefore, must insure
such as forklifts, backhoes, excavators,
tools, generators, and the like.
Agencies should meet with potential
clients to examine their exposures and
design a marine insurance program
customized to their specific needs. For
more specific information about marine
insurance, please visit our website at
www.bmbinc.com or call (713) 860-
1900 for more information. +
BY: GINGER THOMAS
BOWEN MICLETTE & BRITT
31