What does that policy say again?

There are a few things you need to be aware of concerning how your vessel’s hull is insured. Let’s start with the “Inchmaree clause.” This was an English court decision in the late 1800s involving the steamer Inchmaree where the court determined that the then normal perils of the sea needed expansion to include:

• Bursting of boilers;

• Breakage of shafts;

• Latent defects in machinery, hull or appurtenances; and

• Faults or errors in the navigation or management of the vessel by the master, officers, crew, engineers or pilots.

This clause was established in part because the age of steam power was overtaking sail power. The insurance form needed an upgrade in order to cover claims created by this new source of propulsion.

Today, we’re looking at a new age of propulsion with diesel, LNG, nuclear and diesel/electric.

Ships and their propulsion systems are lasting longer today than ever before. That’s why the ocean marine insurance industry needed to see if they could cut claim costs when the Inchmaree clause might apply.

Some ocean marine hull underwriters now put endorsements on hull policies eliminating coverage for damage to machinery in the vessel. Others will not cover damage to propulsion machinery and still others will cover the damage but will charge depreciation. Normally, commercial hull insurance policies cover hull damage with no depreciation based on the wording in the policy “new for old.” However some insurance underwriters will add wording by endorsement that will include depreciation if the propulsion machinery is older than 10 years.

If you have engines older than 10 years and you’ve decided to upgrade with new ones, ask your ocean marine insurance agent to look at your hull policies. They may also need to be upgraded to eliminate any limitations that may hinder your rights to fully recover damages under your hull insurance policies.

Remember, nearly everything is negotiable in ocean marine insurance. So if your insurance agent tells you that your policies have these limitations ask him or her to get a price for eliminating those restrictions. That’s money in the bank when a claim arises.

About the author

Gene McKeever

Gene McKeever is a marine insurance agent with Allen Insurance and Financial. He can be reached at gmckeever@allenif.com.

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