Skip to content
←Back to glossarySpecial risks

Marine insurance (hull and cargo)

The line covering ships (hull) and goods in transit (cargo), largely written on the Institute of London Underwriters clauses, with general average under the York-Antwerp Rules.

Definition

Marine insurance covers ships (hull) and the goods they carry (cargo). Take a container of semiconductors worth 8 million euros that takes on water on an Asia-Europe crossing: on Institute Cargo Clauses A, 2009 edition, the insurer pays the loss less the 50,000-euro deductible. On the same voyage another cargo was jettisoned as general average, and that sacrifice is shared among all the interests on board. Most of the business is in that one case. Cargo cover protects the goods, by sea, air or land, with ICC A written all risks subject to exclusions and B and C on named perils, C being the narrowest. Hull cover protects the ship against damage, total loss and collision, under Institute clauses (IHC) or French clauses. General average makes shipowner and cargo owners contribute to a sacrifice the master made to save the venture, under the York-Antwerp Rules. Liabilities the hull policy leaves out, to crew, passengers and third parties, go to the P&I Clubs, the shipowners' mutuals. The market is still centered on London and Lloyd's, where the line took shape in the 17th century.

Its 13 cross-references, woven across the glossary's 18 categories
Marine insurance (hull and cargo): Special risks glossary illustration, AlgoPolis
Example

Textbook case: a container of semiconductors worth 8 million euros is damaged by water ingress during an Asia-Europe crossing. The cargo was insured on Institute Cargo Clauses A, 2009 edition. The insurer indemnifies the full loss, less a 50,000-euro deductible. Another shipper's cargo had been jettisoned as a general average sacrifice, and the loss is shared among all cargo owners on board.

Read next
Special risksAviation insuranceLine of business covering the aircraft itself and liability to passengers and third parties, under the Warsaw and Montreal conventions.Read the entry →Special risksP&I clubs (protection and indemnity)Shipowner mutuals that cover the liability that comes with running ships: pollution, crew, cargo and damage to others.Read the entry →Special risksHull and machineryInsurance for damage to the ship itself, its hull and machinery, distinct from the liability covered by P&I clubs.Read the entry →
Put it to work
QuizModule check: sixty days, six months, ten weeksAcademy questions on this concept, each one marked and explained.Test yourself →
Related terms
Go further at the Academy
Also known as

marine insurance, marine and energy, hull and cargo, marine insurance policy

Stay informed

Follow the research

One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.

No spam, one-click unsubscribe, no data ever sold.