Hull & Machinery Coverages
A Hull & Machinery policy covers the Assured's losses resulting from physical damage to the ship and on-board equipment.
Total Loss Coverages
These policies cover the Assured's loss if a ship is lost without there being any prospect of it being recovered or if the ship is so badly damaged that it cannot be repaired.
Hull Interest represents a standard total loss insurance, available to the Assured in all markets. The sum insured is normally stipulated up to a maximum of 25 per cent of the Hull & Machinery sum insured.
Freight Interest is a separate total loss insurance, available in some markets, that covers the Assured against the loss of long-term freight income in case of a total loss. The sum insured is normally stipulated up to a maximum of 25 per cent of the Hull & Machinery sum insured.
Loss of Hire
Loss of hire policies cover the Assured's loss of income as a result of the vessel being out of operation because of damage or because it is prevented by a physical obstruction from leaving a port.
The damage that prevents the vessel from sailing regularly has to be recoverable under the Hull and Machinery policy in order to be claimed under a Loss of Hire policy.
War risks are those related to two (or more) belligerents engaging in hostilities, whether or not there has been a formal declaration of war.
An insurance against war perils normally covers the following risks:
- War or war-like conditions
- Use of arms or other implements of war or in the course of military exercises in peacetime
- Capture, Condemnation in prize, Confiscation and other similar interventions by a foreign state or power
- Riots, strikes, lockouts, sabotage, etc.
- Piracy and mutiny (depending on which set of conditions are applicable)
War policies are closely linked with marine policies. In order to avoid any gaps in coverage, we recommend that the Assured cover both policies with the same set of conditions.