Physical damage to or loss of a vessel’s “Hull and Machinery” is a primary risk area for shipowners and operators, including the costs of salvage and wreck removal for which they may be held liable. In addition to standard operational perils such as fire, explosion, collision, stranding and sinking, coverage for losses related to war and piracy may also be required for ship’s marine insurance when navigating certain locations. With increasingly sophisticated on-board technologies and integrated supply chain systems, cyber-attacks have the potential to disrupt on and offshore operations with potentially significant business interruption exposures. In addition to physical losses, marine liabilities such as crew casualty and environmental pollution are another area of significant risk, being addressed by specialist marine insurance products such as Protection & Indemnity (P&I), FD&D (a form of legal costs cover primarily focused on charter party disputes) and charterers liabilities. For goods being shipped by sea (and onwards across worldwide transportation and distribution systems), risks such as loss, theft and damage are common loss events which need to be covered through cargo and shipping insurance.

The global maritime transportation system is complex. Insurance cover is provided to support stakeholders across the value chain, from maritime financing institutions, shipowners, operators and charter parties to shipyards and port and terminal operators.

The traditional centre of Marine insurance activity has been the London Market and Lloyd’s of London. However, the Nordic Hull market is now bigger than London’s in terms of annual gross written premium. Marine markets in the USA and Singapore are also strong, across multiple lines of cover. For specialist P&I and related coverages, this type of risk is written in the mutual model by 13 P&I clubs.

Port and Terminal operations are diverse, and their associated shore-side and off-shore risks varied. However, there are key areas of exposure where coverage is generally required: construction and redevelopment, operational liabilities including environmental, property and handling equipment, revenue stream risks, political violence, and terrorism and cyber.

Goods owners (manufacturers/wholesalers/retailers) from many different industries need to protect the value of their property or stock in transit or in storage, as it moves through the global supply chain, by taking out cargo insurance cover. The senders of goods, carriers, freight forwarders and other logistics operators also need to insure their liabilities in the case of cargo loss or damage, and their revenue streams in relation to business interruption risks. The marine and cargo insurance markets are diverse and provide opportunities for a wide range of insurance products related to the movement and storage of goods and equipment. Common commercial insurance products relate to stock throughput, project cargo, and war and political risk.

Marine hull and machinery and liability risks apply to any vessel operating at sea or upon inland waterways, from bulk and container carriers to cruise ships and super yachts. Like other forms of marine insurance, yacht insurance can be purchased from various marine insurers worldwide who are experts in this class of business. Acquiring marine insurance through a broker can provide assurance on policy terms, price, and coverage, as well as leveraging the broker’s claims management expertise, especially in the event a claim is needed to be made for against a yacht.

The shipping industry has powered global trade for millennia and Marine insurance is one of the oldest forms of pooled risk management. The transition to new fuel technologies and net zero (and accompanying regulatory regimes), cyber, geopolitical, and pandemic risks have all been cited as emergent factors that have the potential to disrupt individual and global marine operations and trading patterns as we move towards mid-century. Insurance providers will need to develop their underwriting strategies, products, and portfolios in order to continue to protect and advance the industry we serve.