Marine insurance comes in a wide variety of forms and types, ranging from basic to advanced forms of protection.

As an insurance provider who regularly works with transportation businesses that ship cargo overseas or by water, it can be worth understanding how marine insurance works. While many marine shipping businesses are well established, just as many are just getting started. Likewise, many companies that primarily use trucks to transport their clients' goods are interested in starting marine shipping.

Key Differences Between Marine and Ground Insurance

Marine transportation presents a number of distinct risks that ground transportation businesses don't have to deal with. While ensuring the integrity of the cargo and the vehicle carrying the shipments are generally quite similar between ground and marine transportation, the environment that ships travel through is quite different.

Isolated Transportation by Nature

Shipping cargo by sea is inherently an isolated business for ships. Once away from land, the ship is entirely self-sufficient unless it decides to call for aid. This element of necessary individualism brings risks of its own. Most problems that arise must be dealt with by the crew while at sea. Issues that wouldn't create problems while the ship is close to shore can be extremely threatening while away from land.

Many marine transportation companies specialize in moving goods through international waters, which brings with it a separate set of problems. While a ship is outside of US waters, the US government has little authority to help with problems that may arise. Strong insurance that covers all likely risk areas is extremely important for successful companies.

Different Types of Cargo

While trucking and air transportation can move smaller amounts of cargo relatively quickly, marine transportation can move vast amounts of cargo more slowly. Because of this essential difference, marine transportation tends to ship a different variety of goods. What's more, changing conditions at sea can delay arrival by days, or even weeks, further limiting what is most easily transported by sea.

While you won't need coverage for when cargo goes bad, you may need coverage for damage caused to the cargo by sea-related incidents. Weather can change almost instantly, causing storms that can damage or destroy incorrectly packed fragile items.

Key Coverage Categories

Different agencies will recommend and offer different types of marine coverage. Some will offer more, and some less, often relative to the specifics of the client's shipping needs. Most standard types of coverage start as the ship leaves port, and end when the ship arrives at the destination port.

Hull and machinery insurance covers most types of damage caused by ocean-related dangers or collisions with other vessels to the hull, equipment, and other machinery of your fleet. This is extremely important, and is one of the most essential forms of maritime insurance.

Cargo insurance covers damage or destruction of cargo transported overseas, and often even covers cargo sitting in a warehouse but contracted to be shipped overseas in an intermediate time frame.

Protection and indemnity insurance can help cover companies from having to pay for property damage or bodily injury caused by, or onboard of, one of their vessels. Similarly, your clients can also secure marine pollution insurance, which will help to cover the costs of accidental pollution events like oil or fuel spills.

Going Beyond Basic Coverage

Because of the international nature of most marine shipping, other types of coverage go beyond the basics.* While these options may not be necessary for all types of shipping companies or individual shipments, they're worth considering for any type of long-distance marine transportation.

War, Military Action and Civil Unrest

While these types of hazards are not extremely common in North American ground shipping, these factors can certainly affect trade routes elsewhere. Many maritime insurance providers will offer coverage for unforeseen international calamities or other types of unrest. World governments sometimes change shipping regulations or international trade obligations at a moment's notice, and this type of insurance can protect your clients from the worst of it.

General Aging and Damage From Ocean Conditions

Saltwater and open ocean can be extremely hard on seafaring vessels. Ships take on general wear and tear over time, but luckily, there are also policies for this. While this type of policy will have to take into account the age and condition of the vessels that you want to insure, it can be worth it for some ships. When discussing this type of insurance with your clients, it can be useful to ask them to take a good look at the condition of their fleet. If there's a higher than average chance that a ship will have a use-based issue on a future journey, this type of insurance can be a lifesaver.


*"Insuring Marine Businesses and Cargo," Insurance Information Institute, accessed 4 Jan 2024.