What is Hull Insurance? Meaning, Coverage & Benefits

Since ancient times, traders and businessmen have been dependent on waterways. Marine trade had always been the second choice after air cargo. Carrying goods worth millions through the waterways carries an immense risk of damage, which is why traders often sign up for insurance. In this blog, we will be solely discussing a specific type of marine insurance, more popularly known as hull insurance. The blog will lay out the coverage details of hull protection, how to claim it and the documents needed. For businesses that deal with waterways, this blog will provide them with a detailed roadmap for securing their cargo. Let’s read on to understand more.

Hull Insurance Meaning

Hull insurance meaning is insurance coverage for any maritime cargo damages and damages to the hull, or its machinery. This type of insurance safeguards all cargo businessmen against all forms of damages - collisions, natural disasters, water damage and more. The coverage details of hull protection are provided in detail below.

Main Features of Marine Hull Insurance

Marine hull insurance is one of the most comprehensive policy protections offered for the protection of vessels while the ship is onboarding a new voyage. Some essential features of the policy are:

Provides All-Rounder Coverage

Marine hull policy offers complete coverage for any damage to the vessels, such as accidental damage due to collision, fire, excessive storm and tempest damage.

Covers Third-Party Liability

The hull policy also offers complete coverage for third-party damage, such as the insured ship damaging the vessel of the third-party ship.

Covers Salvage Charges

Hull protection covers recovery and salvage costs borne by the insured after any accidental damage to the hull.

Wider Coverage For Vessels

A hull policy offers protection for vessels of all types, which varies from a ship to a yacht. The policy offers critical protection for all types of vessels that are used for both commercial and non-commercial purposes.

Read also how marine insurance can be an exhaustive solution for any losses to the cargo or damage to the ship.

Customizable Policy

Hull protection coverage can be easily customized based on the tenure for which the policy needs to be taken, the water route to be taken or the ship type. This makes hull coverage a widely known insurance that most businesses take on before onboarding their maritime cargo.

Coverage For Recovery Expenses

As the hull gets damaged, the recovery expenses levy a high financial cost on the business. This policy offers a critical financial cushioning for covering any expenses that arise from recovery expenses.

What Does Hull Insurance Cover?

The coverage details for hull liability are summarized here:

Protection against natural disasters

Natural disasters such as typhoons or lightning are a common occurrence in seaways. This is covered by hull insurance, where all financial losses of goods damaged or lost during natural perils are taken care of.

Major collision damage

Ships may run into the risk of damage from collisions, which leads to damage of vessels. Having hull damage claims provides instant protection for all monetary losses that would have come along with the collision damage.

Physical Injury to Crew

Any ship crew damaged while maintaining the hull can be claimed under the hull protection plan.

Maintenance Operations Damage

Any unforeseen damages done to maintain the vessels can be claimed as compensation from hull policy insurance.

Theft or hijacking

Theft or hijacking of hulls is still reported, which turns out to be a major threat for those traders who do not have active insurance. A hull insurance offers complete coverage for theft or piracy of cargo in such a case. All losses that arise from a theft or hijacking, such as missing vessels or even vandalised hulls are adequately covered with a hull coverage.

Third Party Damage

Damage caused to the hull of a third-party ship by the insured ship is covered under a hull policy. Hull coverage offers costs of all liabilities arising out of hull damage, as the hull is the base and vital part of the ship.

Also, discover how a liability insurance policy can provide better coverage for damage to third-party ships and transport vehicles.

What Does Hull Insurance Not Cover?

There are a few cases of damages that marine hull insurance does not cover. Here is a concise list:

Willful Act

In the case of willful damage, or damage done intentionally to the hull or vessel does not get covered by a cargo insurance.

Mishandling of Cargo

Vessel mishandling is not covered by this type of insurance. In case the shipping business or cargo logistics company is mishandling the vessel, no insurance compensation can be claimed.

Overloading

In the case of overloading, such as excessive loading of goods, there is no coverage. Also, hull liability insurance does not cover any damage caused due to unsafe loading of goods.

Natural wear and tear

Hull insurance does not include coverage for normal wear and tear, or hull damaged during shipment by normal routine deterioration.

War Damage

Vessels damaged during transit in a war situation are excluded from the coverage limits. Neither is cargo damaged by nuclear war covered by a hull policy.

Non-compliance With Warnings

When the hull is sailed even after repeated warnings, hull coverage does not apply. Cases of non-compliance with the warnings before sailing hulls to the sea are excluded from coverage.

Damage From Illegal Activities

Hull policy does not cover any damages done to vessels from illegal activities or crew damage to vessels under the influence of alcohol.

Types of Hull Insurance Policies

Marine hull policy covers all damages accrued to vessels during natural disasters, collision damage theft and hijacking. Here are some of the most known hull coverage policy types:

Voyage insurance

Offers coverage for any hull damaged for a particular journey. Thus, when the hull is sailed for a specific journey and covers only a singular route, it is covered under a voyage hull policy.

Fleet insurance

This hull policy offers comprehensive coverage, where multiple marine vessels are insured.

Port Risk Policy

Port risk hull protection covers vessels docked at the ports, against financial losses from fire or theft or damage due to natural peril.

There are two other types of hull insurance too, these are:

Brown-Water Hull Insurance

This is complete insurance protection for all vessels travelling inland, such as travelling in rivers, lagoons and lakes.

Blue-Water Hull Insurance

Blue-water insurance offers critical protection for vessels that are shipping through seas and ocean bodies.

Who Needs Hull Insurance?

Hull protection is a necessity for all those businesses that need to follow marine routes for cargo shipment. Often ships run the risk of colliding with a third-party ship or even get severely damaged during a sudden onset of a typhoon or a tornado. Having hull liability protection offers critical coverage for all damages caused, so all trade exporters or marine logistics providers need to necessarily use vessel coverage insurance. These businesses and entities need to buy hull marine insurance for avoiding maximum financial loss due to hull accidents:

• Port authorities
• Owners of ships
• Logistics/freight partners
• Boat owning companies
• Companies that rent out boats/marine freight ships
• Marine operators

How to Choose the Right Hull Insurance Policy?

Here are some steps that you can follow for choosing the most suitable hull marine coverage policy:

• Compare the benefits and coverage scope of the insurance providers with others
• Check for the pricing details of the policy
• Note the add-ons (if any)
• Check the extent of third-party collision liability covered
• Measure the maximum deductibles payable
• Understand if the policy covers machinery damage

How To Claim Hull Insurance Policy With Covrzy?

Covrzy has a completely customer-centred approach when it comes to claiming hull policy coverage. Follow these steps to claim insurance without undergoing any hassles anymore:

• Get in touch with the Covrzy relationship manager. We will be guiding you in detail about the immediate next step.
• We will share a claim form with you to get the details and your authorised signature
• We will forward the details to the insurance company
• The insurance company will look at the details, and generate a claim reference number
• There will be a survey briefly to assess the nature and magnitude of damage
• You will receive a list of documents to submit from the Covrzy team
• Submit all the duly signed documents and await claim approval
• You will be notified via email and SMS about the approval and release of the claim amount

Claim Documents Required for Hull Insurance

As soon as the insured has filed the claim, they will be asked to submit the claim documents required. Here is a total list:

• Report of the accident
• Insurance policy copy
• Claim form (this includes policy no, certificate no, date and time of loss, nature and extent of damage, invoice receipt from insurer)
• Insurance certificate
• Bill of Landing with the details of the cargo
• Claim Bill Without these documents, the insurance company may not settle the claim against hull damage.

Conclusion

Hull insurance, although being a part of marine insurance, is still an insurance facility that covers the most paramount parts of the ship, the vessel. Vessel damages can cause massive damage - destroying the cargo to overturning the ship. Not to mention the financial outage and the commercial disruption that can follow in case the vessel is damaged, it is always wise to adopt a cautionary system beforehand. Hull protection offers clear armour against such damages, whether it is done by any natural peril or by an accidental collision. However, before choosing the most appropriate insurance policy for vessel damage, the insurer needs to take note of factors such as collision liability, maximum deductibles, and a few more. This blog has listed all of these factors, along with details on the claim process.

Why Choose Covrzy for Hull Insurance?

Covrzy offers a seamless process to file your claim for hull breakdown or any damage to your transport hull. With dedicated team support and a yearlong claim assistance system, Covrzy stands to transform insurance buying into a highly customer-friendly approach. Whatever your business requirements, Covrzy is your trusted partner for every step of buying hull liability insurance without any hassle.