Marine Insurance Germane to Multiple Industries: The original insurance'.

AuthorBarbour, Tracy
PositionINSURANCE

Marine insurance is a broad term with meaning and coverage areas that have significantly evolved over the years, according to Lynne Seville, CSP, principal and account executive with Parker, Smith & Feek Inc. Headquartered in the Pacific Northwest, Parker, Smith & Feek is one of the largest insurance brokerage firms in the country.

"Marine insurance is kind of the original insurance," says Seville, who is based in Anchorage. "It is one of the oldest types of insurance, established when almost all important things were shipped in boats. It was really about protecting cargo in the beginning, and then it morphed from there."

Today, the "marine" insurance category encompasses many different types of insurance. "It includes everything from maritime insurance for vessels and cargo to builder's risk to inland marine coverage, which is basically insurance for property that moves around, such as mobile equipment," Seville says.

Almost every kind of business can utilize some kind of marine insurance--from building contractors to manufacturers and social services agencies. "It's really one of those coverages that almost every business needs in one shape or form," she says.

Common Coverage Types

What people think of as traditional marine insurance is a type of coverage that primarily pertains to vessels and cargo over the ocean. Commercial marine businesses typically purchase coverage for the hull (the body of the boat), the crew, and marine liability. Liability insurance provides coverage for damaging others if the owner or operator is at fault for an accident on the water. It can pay to repair or replace the property as well as any medical care, lost wages, and other cost resulting from the accident.

Commercial vessels often also have cargo insurance to offer protection against the destruction of the property carried on board. Cargo coverage represents approximately half of the "true" marine insurance market, Seville says. Parker, Smith & Feek places a significant amount of ocean cargo coverage for businesses, ranging from shippers to contractors who ship materials. For example, a contractor who has a critical component for a project that needs to be shipped over ocean would place marine cargo coverage to protect against its loss. Seville explains: "You can also cover loss of business if you lose cargo. We also have 'delay in start-up coverage', which covers the impact to the contractor's business if a project is delayed due to something happening to the cargo."

Another essential type of insurance that is designed for boat owners is pollution liability. This insurance, which is required, provides coverage from spills or threats of spills involving entities such as shipyards, yacht dealers, fishing vessels, and marinas. Coverage includes clean-up, third-party property damage, subsistence, assessment of and damage to natural resources, loss of revenues and profits by third parties, civil penalties, and criminal fines and defense.

There are also a number of coverages that people typically do not associate with marine...

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