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Hull & Machinery

This coverage protects the vessel itself and its machinery. These policies typically cover physical damage and salvage costs, and also provide collision liability – also known as a 'running down clause'.

Physical damage cover- marine perils

  • Perils of the sea
  • Fire, explosion
  • Violent theft from person outside the vessel
  • Jettison
  • Contact with conveyance, dock, harbour equipment, installation
Inchmaree clause covers latent defects in the hull and machinery. This protects the buyer of a vessel from injuries caused by flaws in the design or the manufacture of the vessel, which may take time to become apparent but can be the cause of an accident or injury.

Inchmaree perils

  • Loss of or damage caused by accidents in loading, discharging or shifting cargo or fuel
  • Bursting of boilers
  • Breakage of shaft
  • Latent defects
  • Negligence of master, officers, crew or pilots of the vessel
  • Barratry of master, officers, crew
Sue and labour clause require a vessel owner take necessary measures to repair the vessel after damage occurs. If the repairs are successful, the owner is compensated for their reasonable costs. If the repairs are unsuccessful, the insurer must pay for both the total loss of the vessel and the repair costs that the owner incurred in attempting to save the vessel from further injury. While it may sound counterintuitive for insurers to do this, it forces vessel owners to attempt to salvage a damaged vessel before the insurer becomes liable for the total loss of the insured vessel.
'Increased hull cover' or 'hull interest' policies.Whether a vessel has the potential to fluctuate in price or could be costly to replace, some insurers allow vessel owners to purchase These policies allow an owner to take out a policy for an amount greater than the vessel's fair market value. This protects the owner against fluctuations in price throughout the year, while also providing it with money that may be needed to cover administrative costs incurred while procuring a replacement vessel.


ITC-H 1.10.83 are the most widely used in practice. Conclude Inchmaree Perils. The 1/11/95 clauses are also widely used, but frequently with removed extension of the want of due diligence proviso to include Superintendents and any of the onshore management in addition to the Assured, Owners or Managers.

  • ITC-H 1.11.95 restricted clauses used from the underwriters to old vessels for total loss only
  • ITC-H 1.11.03 are rarely used. They are more comprehensive and include Leased equipment, parts taken off in coordination with the underwriter
  • American Clauses more comprehensive clauses, include more Incmaree perils, the policy could not be voided in a change of the class , could conclude a 4/4ths Collision Liability
  • Norwegian Plan most comprehensive clauses, a kind of All Risks policy, including Loss of Hire, War risks, suggested to specialist ships, 80% total loss, the right of interest from the date of submitting the claim

Some policies have deductibles, or deductible-like provisions, which create a minimum amount of damage before the insurer pays on the policy. A deductible in a marine policy works just as it would in any other insurance policy. The insured must pay a certain amount itself, and the insurer will cover any amount above that to repair the injury.


Some policies use a different provision, called a 'franchise'. A franchise is a minimum amount of damage that must be incurred before the insurer covers the loss – but then the full amount of damage, including the franchise, is covered up to the policy limit. These deductibles and franchises protect insurers from liability for the normal wear and tear that a vessel suffers due to everyday use.

For any additional information please contact us.

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