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Commercial marine insurance

Protect your business cargo from damage or theft, whether you're transporting over land or sea.

Commercial marine insurance can benefit nearly any business transporting cargo or goods. But it doesn’t cover damage if you fail to take reasonable safety precautions, like locking up your items to prevent theft.

What is commercial marine insurance?

Commercial marine insurance is designed to cover damage and theft to a business’s ship, truck or plane cargo during transport. It also covers medical and legal bills for injuring someone and lost business income for a variety of businesses from freight companies to fishermen.

What is commercial inland marine insurance?

Inland marine insurance refers to coverage for cargo shipped on land, rather than by sea. But how the coverage works is similar.

What does commercial marine insurance cover?

A typical marine insurance policy involves covering four major sections of your business. Coverage includes:

  • Cargo damage. Your policy can reimburse you for damage or theft that happens to the cargo while en route to a new location.
  • Liability. Marine liability insurance covers a business for accidents that cause bodily injury or property damage to a third party, including the cost of medical, repair and legal bills.
  • Lost income. This covers a shipowner when damage to or loss of their ship results in a loss of business income.
  • Hull insurance. Hull insurance offers protection against the loss of ships, as well as any damage to the ship itself. A policy can cover the hull, motors and machinery, equipment and accessories, sails and masts, trailers and even a dinghy or tender.

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Who should consider commercial marine insurance?

If your business transports goods using a boat — whether they’re imported, exported or moved within the US — liability insurance is essential for legal protection. Or, protect your business financially by picking up a more comprehensive policy. This type of insurance cover can be highly useful for:

  • Companies that ship goods.
  • Shipowners.
  • Companies chartering ships.
  • Ship repairers.
  • Marina and port operators.
  • Tourist craft operators.
  • Road transport companies.
  • Logistics businesses.
  • Yacht clubs.

What are the risks of not having commercial boat insurance?

For most marine businesses, going without commercial boat insurance isn’t worth risking:

  • Damages and losses to stock. A container could be washed overboard and lost during a heavy storm.
  • Damages and losses to cargo. Your vessel could be damaged by bad weather or even hijacked by pirates.
  • Loss of income. Damages could result in lost income or goods left in an unsellable condition.
  • Liability. If you’re cargo business causes damage or injury to third parties, you could be held liable.

How to file a commercial marine insurance claim

Each insurance provider will have their own unique process for handling claims, but you’ll typically be able to find a claims form online. You’ll need to fill out this form with all your claim details.

In some cases your insurance provider will request more information, which could include anything from photographic evidence to police reports. Supply any evidence as quickly as possible to ensure the prompt resolution of your claim.

Most insurance providers will have an expert claims team that specializes in managing marine insurance claims to help guide you through the process.

What are common marine insurance policy exclusions?

Exclusions can differ between policies but will typically include:

  • Failing to take due care to prevent a loss. For example, failing to lock a vehicle that is transporting goods. This can also include improper handling or storage of goods.
  • Acting recklessly. This includes any act that an insurer could argue you knew could lead to a loss and committed anyways.
  • Wear and tear. Insurance won’t cover expected wear and tear of your boat or losses occurring from mold, mildew or insects.
  • Not taking care of livestock. This includes claims related to the inoculation of livestock or livestock kept in unhealthy conditions.
  • Using autopilot. If an incident occurs when a vehicle is being driven under its own power, except when being loaded or unloaded, your claim can be denied.
  • Pre-existing damage. Your insurer won’t pay for any equipment or goods that were damaged before you got them.
  • Fraudulent or dishonest acts. This can include anything from not disclosing something on your insurance application to lying about the cause of an accident.
  • Failure of your refrigeration equipment. Check your refrigerators regularly, because your insurer won’t cover any losses that happen if they fail.
  • Traveling to unsafe areas. Vessels may only be covered in certain geographical areas — check your policy to find out if there are any off-limit waters.
  • When your hull is undergoing major repair. Your insurer may not cover damage to your boat while it’s undergoing major repairs.

Risk management tips for commercial boat owners

A crucial part of any business insurance plan is minimizing the risks your business is exposed to. When any disruption to your regular operation could lead to a financial loss, it’s essential that you develop a risk management plan to help limit your exposure.

To develop a risk management plan, ask yourself what marine risks your business faces. How likely is it those risks will occur? What would be the financial consequences if they did occur?

Once you understand the risks, you can put plans in place to reduce them. This could mean increased security at certain storage sites, upgrading the machinery on a certain vessel or any number of backup plans.

Common risks that you’ll want to consider include:

  • Natural disasters
  • Epidemic or pandemic
  • Technology
  • Injuries to yourself or your crew
  • Economic downturns
  • Suppliers
  • Regulatory or governmental changes.

Bottom line

If your livelihood depends on your cargo, protect it with a commercial insurance policy. And if shipping is only one piece of your company’s puzzle, consider bundling it with your business insurance to save money.

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