What is Ocean Marine Insurance?

The name “ocean marine insurance” might make you think that this kind of insurance is primarily for sea-faring vessels. On the contrary, ocean marine insurance is a specific kind of insurance to protect goods and vessels crossing domestic and international waters by sea, land, or plane. 

If your Insured owns a marine vessel that is used for commercial purposes or they contract with another company to transport their goods and merchandise, they may need this kind of insurance. An ocean marine insurance policy is most often taken out by businesses in the following industries: 

• Marine services and contracting
• Marine transportation
• Importing
• Exporting
• Fishing
• Yachting

As you can guess by the different industries that use ocean marine insurance, this type of policy can cover a variety of risks. Ocean marine insurance is a broad term for three kinds of coverage: 

• Cargo coverage 
• Hull (vessel) coverage
• Liability coverage 

Let’s take a closer look at each coverage. 

Cargo coverage 

If your Insured deals in international imports and exports, ocean marine insurance can help to cover their goods and merchandise. It may be helpful in situations like the following: 

1. Lost cargo – Should the shipment that was promised to their clients never arrive— whether due to a collision or misplacement—your Insured could be liable. 
2. Lost revenue – Should a shipment be delayed for so long that your Insured’s client no longer needs the goods and refuses to complete payment, your Insured could suffer a financial loss.
3. Legal liability – In a situation like the above, a client could take your Insured to court to sue them for the payments they’ve already made on lost, late, or damaged goods. Without ocean marine insurance, your Insured may be responsible for their own legal fees (depending on the specifics of your other insurance policies).

Hull (vessel) coverage 

Ocean marine insurance can also provide coverage against damage to a ship’s hull, or machinery, and against total loss of a ship. If your Insured owns or operates a marine vessel for commercial purposes, this kind of ocean marine policy may be essential to protecting their yacht, ferry, or boat.

Liability coverage 

Like general liability insurance, ocean marine coverage can help to protect vessel owners from claims of bodily injury, personal injury, and property damage related to their services.

Ocean marine vs. inland marine coverage 

When shopping for insurance, you may be unsure of the difference between ocean marine insurance and inland marine insurance. 

Inland marine insurance, or commercial inland marine insurance, covers goods and merchandise in transit. When your Insured’s imported or exported goods are covered by this kind of policy, the insurance goes wherever they go. Inland marine insurance most often applies to goods traveling domestically via rail, air, and truck. 

Ocean marine insurance can cover not just goods, but also vessels. It can apply to goods traveling domestically or internationally by any means, with continuous coverage if part of the shipping trajectory includes shipping by land, air, or water. 

Consider the shipping path your Insured’s goods take. Depending on the specifics of your Insured’s business and their policy, they may need one or both kinds of insurance.

Doesn’t their insurance already cover that? 

As you read through the above scenarios, you may think that an existing commercial insurance policy already covers their goods, their lost revenue, and their legal liability. In fact, ocean marine coverage may seem similar to policies that they already have. 

For example: 

Commercial property insurance can protect your client’s company’s equipment and assets. You may assume this covers any goods you transport—but in fact, commercial property insurance only covers goods at one location, not when they’re in transit. 

General liability insurance can provide coverage in the event of client or third-party bodily injury, personal injury, advertising injury, or property damage. However, depending on the specifics of their policy, it may not protect against liability during international transit. 

Professional liability insurance can provide coverage against claims of errors, omissions, and mistakes related to your professional services. While lost goods may seem like a mistake, most professional liability coverage applies to domestic work, not to international shipping. 

In general, it’s important to check with the insurer to discuss the specifics of their policy. This will help you determine whether there may be an additional need for insurance for their goods or vessel.

Ensure smooth sailing for your client’s business 

Whether your client is a marine services company or a small importer, it’s important to understand their insurance coverage, and how it applies to goods in transit. Remember:  

• Ocean marine insurance can cover liability, goods, and vessels during international transit by sea, air, or land.  
• Inland insurance can cover goods in domestic transit. 

Businesses likely need other policies like general liability insurance and professional liability insurance to protect against other kinds of claims. 

Stay out of rough water by helping them to protect their business. Allow them to leave risk management to you, the professional and focus on what they can control—their growth.