Insurance solutions for companies operating in the maritime leisure sector have evolved slowly compared to other sectors. Until relatively recently, the owner of a shipyard could find a set of insurance products to cover buildings, contents, financial risks, boats, pontoons and compensation against a series of legal liabilities.
The Marine craft insurance providers
Combined insurance policies for ocean-related businesses are now available through a series of specialized providers. While most of these providers will deal directly with the public, some will do so only through insurance brokers. An insurance provider that sells directly to the public will only offer its own product. Dealing directly with insurers not only restricts you in terms of available insurance options, but also means that you have to invest valuable time in purchasing suppliers to obtain competitive quotes. A Marine Trades specialist insurance broker can potentially save you and your business time and money by conducting a full brokerage exercise in the entire market on your behalf.
Specialized brokers can also help organize customized coverage instead of a standard “ready-to-use” solution. This can provide your company with vital benefits when the standard exclusions of the policy are modified or eliminated, expanding the general scope of the protection. You can also benefit in case of a claim.
When a business buys directly from an insurer, in the case of a claim, the owner must negotiate an agreement with the insurer. This can put the company at a disadvantage when there is a dispute over liability or liquidation. The use of an independent specialist agent to organize the coverage gives the owner of the company an experienced advocate in the event of a claim. The agent is obliged to act in the best interest of the client at all times and a specialized agent can often help him in cases where the claims have been initially repudiated.
Structure of the combined marine insurance policies
Before describing the structure of a policy, it is necessary to emphasize the importance of ensuring that the correct compensation limits are the basis of your insurance coverage. It is tempting for companies that seek to reduce their costs to secure them deliberately. This can be catastrophic in the case of a loss, since it is almost certain that an insurer invokes the “Average” principle when insufficient insurance is discovered.
The previous example emphasizes the importance of companies establishing the correct basis of coverage with their supplier and then negotiating a competitive premium. An independent specialized broker with access to several alternative markets will help you get the right solution with the best premium available.
Marine Trades combined insurance policies generally follow the same model, with the odd exception of where a particular item may appear. For example, some policies will include pontoons in the Material Damage Section, while others may include them in the Marine Section
- Computers and associated equipment (in business facilities)
- Machinery and equipment (in business facilities)
- General Stock (in business facilities)
- Valuable and attractive stock (in business facilities)
- All other content (in business facilities)
The Benefits of combined insurance policies
There are numerous advantages for business owners to have a unique insurance policy that combines coverage with respect to most of their needs. First, it streamlines administrative processes by significantly reducing documentation, saving time and money for business owners. It also guarantees that the owner has a unique renewal date to deal with. Probably, the main benefit for companies is the possible savings in the premium that can be obtained through this type of system: the more coverage can be placed on a single policy, the provider will have more possibilities to reduce the general insurance premium.
Glass: Some insurers will include Glass inside the roof for Buildings. However, most Marine Trade insurers will not cover Glass unless specifically requested and will also charge an additional premium. A cover for external and internal glass will be provided with additional extensions available for items such as glass signs and sanitary appliances.
Coverage of all risks: must be obtained for companies that wish to insure the items that they remove from the company’s facilities, such as:
- Tools and machinery
- Laptops, mobile phones, etc.
- Trailers (these can also be covered under the Marine Section)
Exhibitions: Covers exhibitions, stands and other materials in exhibitions.
While insurers include this Section within their policies, a company could reduce costs by having the Marine Section of its policy endorsed to cover ships at exposures instead of paying its insurers an additional premium for the same benefit .
Business interruption: covers the loss of gross profits and / or the additional cost of working in the event that an insured business interrupts the business activities of a business, such as a fire or flood. Extensions can be purchased to cover losses resulting from hazards such as:
- Channel rupture
- Damages in the vicinity of the facilities or in contracts or exhibitions sites
- Denial of access to the surroundings of the premises
- Damage to molds, patterns, templates, matrices, tools, plans, designs, etc.
- Loss or damage to property stored in places other than your own premises
- Loss or damage to property in transit
- Damage to premises of suppliers or customers.
- Loss of public services
- Illness and disease
Frozen food: Covers loss or damage to fuel as a result of temperature change in refrigerators or freezers that result from the breakdown or interruption of the feed.
Goods in transit: Protects against the loss of goods while in transit or while temporarily stored in transit. Business owners should be careful with the variation in the scope of policy to policy coverage and the large number of exclusions that each insurer applies to cover.
The premium for Transit Goods insurance is based on a combination of the total sum insured per vehicle, the number of vehicles used and the estimated annual total of the business.
This Section may also be extended to secure postal items and transportation by third parties.
Coverage of goods in transit for vessels is excluded in many policies unless specifically mentioned. However, it is possible to include insurance for ships while in transit by endorsing the Marine Section of the policy. Organizing a policy in this way can save a company money if ships are the only items that will be secured while in transit.
Just as it is essential to insure property correctly to prevent insurers from applying the “Average” in the case of a claim, it is vital to ensure that the correct level of Gross Profit is used to determine Business Interruption coverage.
The sums insured for ships are generally determined on the basis of the “Agreed Value”. This may be the price you paid for the boat plus the cost of any improvement, or it may be a depreciated or amortized value.
The cruise range of your vessels will be clearly defined in this Section of your policy. You should check to make sure that you and your landlords are really insured to navigate or navigate to your intended destinations. For example, an insurer can assume that, if it is based on the Thames, it is only on the non-tide leg and will back up its policy of exclusive use of “Inland waterway routes”.
- There are several extensions that can be purchased for this part of your policy, such as:
- Social use of ships by directors, employees, family members.
- Risks of races (sails, masts, masts and rigging).
- Water skiing, toy trailer.
- Fishing and / or diving holidays.
- Personal items
- Exclusions with respect to vessels will vary from one policy to another. You should ask your provider to review the exclusions with you in detail in case you need a special endorsement or extension
Builder Risks: Although the scope and definitions may differ from one insurer to another, the builders’ Risk insurance will generally cover your boat in the yard or dock where it is being built, including the yard or facilities of a subcontractor. You can also cover the boat while it is in transit between your yard and the yard of your subcontractor.