Ship owners need to be mindful of many perils their vessels are subjected to during operations. Along with ensuring financial protection in case of damage to cargo or the ship, they also need to consider potential lawsuits should their ship cause damage to a third party. Equally essential is to remain guarded against legal actions from crew and passengers.
While a marine insurance policy safeguards ship owners financially if their ship suffers physical damages, marine protection and indemnity insurance protects them from third-party liability risks. It is one of the essential marine insurance coverages offered, the others being hull coverage and cargo insurance.
The Need for Marine Protection and Indemnity Insurance
Ship-owners, today, require coverage beyond traditional ones. They are exposed to a range of unique third party liabilities that could result in expensive lawsuits. Settling them can pinch finances hard. Therefore, ship owners need to have this coverage for comprehensive protection.
For example, an oil spill from a ship can cause environmental damages worth several lakh dollars, resulting in many civil lawsuits. Deaths to passengers and crew members because of accidents or illnesses may also lead to settling expensive claims and paying for medical expenses. Hence, as a vessel owner, you need to be financially prepared to face such liabilities.
Coverage Under Marine Protection and Indemnity Insurance
Loss of life, illness or injury to crew member and passengers
Marine protection and indemnity insurance will help you settle claims arising due to loss of life, illness or injury to the vessel’s crew members and passengers. In the past, many cases of crew members and passengers losing their lives or injuring themselves on ships have come to the fore resulting in expensive litigation for ship owners.
Medical expenses
Treatment of injured crew members and passengers can be an expensive affair. Marine protection and indemnity insurance can help ship owners bear these costs to some extent.
Age of Employees
Age is a critical factor while buying health insurance, and group health insurance policy is no different. Risk increases with age as the body becomes vulnerable to several ailments. If the employees’ age is on the higher side, you need to pay a higher premium towards the plan.
Damage to other vessels
If your vessel accidentally causes damage to another ship, the other ship-owner can sue you. However, marine protection and indemnity insurance can help you pay for the damages and cover the legal cost.
Along with these coverages, this insurance policy also covers costs for removing wrecks, repatriation of crew members, wars and political risks, among others.
Read the Policy Documents to Know the Exclusions
Like marine cargo and inland marine insurance have exclusions, this policy also has a few exclusions. The policy will not cover risks under a worker’s compensation policy or a collision clause under a hull insurance plan.
Conclusion
As evident, marine protection and indemnity insurance provides coverage against a range of third party liabilities. Purchasing it can help ship owners fortify their coverage significantly. It’s wise to compare multiple plans before buying and choose the one that best fits your needs.