Marine

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Different Types of Marine Insurance: A Guide
Different Types of Marine Insurance: A Guide 560 372 James Hallam

Marine insurance is designed to protect boats, their crews, and their cargo from the many risks associated with sailing. Marine insurance policies can also provide cover for any legal expenses that may arise from incidents.

In this post we will discuss some of the different types of marine insurance. For a full introduction to how marine insurance works, and what it covers, be sure to check our dedicated marine insurance hub.

Types of Marine Insurance Cover

Freight Insurance

This is specialist cover for marine trade businesses to cover any loss or damage to freight cargo in the event of accidents.

Marine trade businesses can also take out Freight Demurrage and Defence (FD&D) insurance to cover any legal costs that are not covered by other insurance policies.

Hull Insurance

This is cover for a ship’s hull, along with any pieces of equipment or furniture. Hull insurance can cover any repairs or replacements that may be necessary following accidents or incidents.

Ship owners may also choose to take out dedicated machinery insurance to cover damage to any essential machinery used on the ship. Or they can choose a combined Hull & Machinery (H&M) policy.

Liability Insurance

If a ship is involved in a collision, liability insurance covers the crew and any other individuals involved for compensation resulting from their injuries.

Marine Cargo Insurance

This covers the ship’s cargo for loss or damage. Marine cargo insurance can also cover for any losses incurred by delays either in sailing, loading, or unloading.

Most marine cargo insurance policies also cover for third parties, in the event of any loss or damage caused by heavy or otherwise dangerous cargo.

P&I Insurance

P&I stands for protection and indemnity insurance. This provides policyholders with cover for claims made by their crew and passengers for illnesses, injury, and death as a result of collisions or other incidents. In the result of a major incident at sea, P&I insurance can also cover for the salvage and removal of the shipwreck.

Types of Marine Insurance Policy

As well as different types of cover, there is also a range of different types of marine insurance policies:

  • Floating Policy – Also known as an open policy, or a blanket policy. It is designed for major exporters. Rather than taking out separate policies for each shipment, they can instead take out a floating policy to cover every shipment they make over an agreed period of time. Periodically, the policyholder will have to declare details of every shipment they made during this period.
  • Voyage Policy – A Marine Insurance policy designed to cover a single shipment or consignment.
  • Time Policy – A Marine Insurance policy that is issued for a fixed period of time, usually a year. The policy will cover all voyages undertaken during this period, with no need to take out separate policies for each voyage.
  • Valued Policy – A policy in which the value of a voyage’s cargo and consignment is specified in the policy wording. This makes it clear how much reimbursement will be due following an incident at sea.
  • Unvalued Policy – The opposite of a valued policy, in which the value of the cargo and consignment is not specified in the policy document.
  • Single Vessel Policy – A Marine Insurance policy that provides cover for a single vessel.
  • Fleet Policy – A Marine Insurance policy that provides cover for multiple ships, usually over a pre-agreed period of time.
  • Port Rick Policy – This provides cover for vessels while they are docked in ports. Usually, marine businesses will take out this policy when they expect their vessel to be anchored at port for an extended period of time. The cover usually stops the moment the ship leaves the port.

Get Comprehensive Maritime Insurance Cover From James Hallam

If you are not sure what type of Marine Insurance cover is right for you, give us a call.

We have partnered with Everard Marine and Commercial Insurance, which has given us a deep understanding of every aspect of the maritime industry, and the various insurance implications.

We deal with a wide range of niche insurance providers, we can arrange the cover you need, whether you’re looking to cover a single vessel or an entire marine trade supply chain.

Find out more about our specialist marine insurance services

Yacht club and marina

Agreed Value vs Market Value for Boat Insurance
Agreed Value vs Market Value for Boat Insurance 650 433 James Hallam

Ensuring you have the right insurance coverage is crucial. Many marine traders, boat owners and even some insurance brokers may not fully understand the intricacies of their marine insurance policies, particularly when it comes to the marine section.

In this post, we take a look at key components of marine insurance, specifically the basis of cover, helping you to determine whether you are adequately covered or your client has adequate cover under their marine section.

What Types of Marine Cover Is There?

Marine insurance policies typically offer two main types of cover for your boats, vessels, or watercraft: Agreed Value and Market Value. Understanding the differences between these can help you make an informed decision about your coverage.

Agreed Value vs Market Value

Agreed value and market value policies differ on how and when the value of your vessel is made. In brief, agreed value policies set the value of your boat and watercraft at the beginning of your policy, while market value policies set the value of your vessel at the time of the loss.

Next, we look at each type of policy in more detail and the advantages and disadvantages of each.

Agreed Value Cover

Under an Agreed Value policy, the insurer and the insured agree on the value of the vessel at the start of the policy. This agreed value is based on the insured having a financial interest in the amount, supported by evidence provided in the event of a claim.

  • Advantages: In the event of a total loss, you receive the agreed amount, which can provide peace of mind knowing exactly what payout to expect.
  • Disadvantages: These policies can sometimes be more expensive, as the agreed value might be higher than the current market value over time.
    Your financial interest may be lower than the actual market value of your Vessel.

Market Value Cover

Market Value policies, on the other hand, work similarly to property market value. The payout is based on the vessel’s market value at the time of the loss.

  • Advantages: Premiums for market value policies can be lower, as they reflect the depreciating value of the vessel.
  • Disadvantages: If the vessel is undervalued, you may not receive enough to replace or repair it fully, and the principle of average may apply. This means if you are underinsured, any claim payment could be reduced in proportion to the amount of underinsurance. Therefore, the question should be asked at the start of a policy or renewal of the insurance contract, “What is the current value of your vessel, and explain the implications of ‘average’.

The Impact of Inflation and Rising Costs

With inflation driving up the costs of goods, services, and labour, ensuring that your insurance cover keeps pace with these increases is vital. If your policy’s sums insured have not been updated to reflect current values, you might find yourself underinsured. This can have significant financial implications, especially in the event of a total loss or major damage. As inflation has soared over the past few years, has the value of your Vessels changed? Could you replace the Vessel in the event of a total loss for the amount noted on the Policy Schedule.

Making Sure You Have Adequate Insurance Cover

To ensure you are adequately covered, consider the following steps:

  1. Review and Update Regularly: Regularly review your policy and update the sums insured to reflect current market values and replacement costs.
  2. Provide Accurate Information: Ensure all information provided to your insurer is accurate and up-to-date. This includes the value of your vessel and any modifications or additions.
  3. Consult with Experts: Engage with insurance brokers or consultants who specialise in marine trades insurance. Their expertise can help you navigate the complexities of your policy and ensure you have the right cover.
  4. Obtain an Up to Date Valuation
    In the event that you are unsure of the Value of your Vessel(s), it is always a good idea to obtain an up to date valuation from a marine professional.

Having the correct marine insurance cover is your financial safeguard. Whether you choose Agreed Value or Market Value cover, understanding the nuances of your policy can prevent unpleasant surprises in the event of a claim. As costs rise and the market evolves, regular reviews and updates to your insurance cover are essential to maintaining adequate protection.

Get In Touch to Discuss Your Insurance Requirements

If you are unsure about the adequacy of your marine insurance coverage, now is the time to consult with your broker or a specialist. Ensure your policy is up-to-date and reflective of current values to secure peace of mind and financial security for your marine business.

Call us on 020 3148 9540 or email info@everardinsurance.co.uk

Cyber & Data Risks Insurance
Cyber & Data Risks Insurance 1920 1280 James Hallam

Each year when completing a review of their insurances, most businesses will look at uninsured exposures with their insurance broker. Most of these can be reasonably ignored following simple cost-benefit analysis, but cyber is more difficult in that the associated risks and their potential cost to a business are still developing. It is anticipated though that the frequency and severity of such incidents will continue to rise, mirroring the experience of North America where cyber risks are given a higher regulatory and boardroom prominence. In the US it is now estimated that over 75% of corporate businesses purchase cyber insurance.

  • Different businesses will be exposed to cyber risk in different ways; some are reliant on their website to drive turnover, some rely on a hosted accounting or billing system to operate whilst others hold sensitive client data or intellectually valuable data on their systems. There are a multitude of scenarios that leave a business exposed to internal and external electronic threat. The failure of an IT network could be debilitating and a good first step is to identify and take steps to mitigate external and internal IT risks. These include:
    data theft or data loss
  • hijacks where hackers gain control of a system and demand a ransom to restore service
  • bot scams where viruses are used to take over large numbers of computers
  • basic human error (internally generated risks should not be overlooked and continue to be the most common proximate cause to a cyber loss)

Notification costs following the loss of third party data is now a major concern for EU business following GDPR. Safekeeping of data is the responsibility of the customer facing entity, notwithstanding that a third party processing company may have been the party that lost the data and/or contractual terms making a third party responsible for notification. This means if you are hacked and lose your customer data (names, addresses, credit card numbers etc.) you will need to report the loss to the data commissioner, possibly pay PCI fines, pay the cost of notifying your customers that they are at risk, pay for advice to manage their risks and pay PR costs to manage the potential damage to your brand and reputation. All of these risks can be insured and cyber insurance will additionally cover fines and penalties associated with regulatory investigations due to a privacy event.
The other major threat to a business may be the loss of a website and a resultant loss of revenue. Again, this can be insured.

  • The cyber insurance market has been developing at a rapid pace over the past five years as experience has been gained by insurers. Areas of cyber-risk that can now be insured include:
    replacing, restoring or recreating data that has been corrupted or destroyed by network failure or first/third party intervention
  • loss of data and notification management costs
  • criminal threat or extortion to release sensitive information or bring down a network unless demands are met
  • loss of income and extra expenses resulting from when a network is interrupted by attack. Covers criminal hackers, malicious insiders and denial of service (DOS) attacks, (including extortion monies)
  • payment fraud (deception of the insured’s customers into transferring over funds)
  • public relations expenses and crisis management
  • disaster recovery activation costs
  • fines and penalties where insurable by law
  • use of leased / rented external equipment
  • use of third party services
  • additional staff expenditure and overtime payments
  • terrorism risk, including ideological risk (LulzSec, Anonymous etc)

James Hallam Insurance Brokers have been placing cyber risk in the London market for over fifteen years. We source cover to insure against all of the above threats and, in addition, we can protect against risks that the majority of cyber insurers omit. For example, our favoured market will also provide:

  • the provision of first party cover on an “each and every claim” basis, ensuring that policyholders aren’t restricted by a policy aggregate and that the full benefits of cover are available each time a crisis strikes, even if they experience multiple cyber incidents in the same policy period
  • full retroactive cover as standard, meaning that policyholders are covered for breaches they discover during the policy period, even if it first occurred long before. Symantec has reported that the average time to discover a breach is 205 days, making this a particularly important feature
  • an extensive in-house incident response capability to ensure that cyber incidents are dealt with quickly and efficiently in real time. Initial response services are offered with no deductible payable by the insured
  • broader cover for senior executive officers who are regularly targeted in cyber attacks, covering theft of personal funds of individuals as well as those of the company
  • if a suit is brought against directors and officers following a cyber attack, the policy provides affirmative cover in the event that their management liability policy doesn’t respond
  • incident response costs are provided in addition to the policy limit
  • no excess is applied to the initial reporting and investigation costs
  • full systems failure is covered, including resultant business interruption
  • full Supply Chain is covered, including Technology suppliers (and non-Technology suppliers if named)
  • Cryptojacking and Botnetting are included under the definition of Cyber Crime
  • Additional Extra Expense coverage is included for costs above the normal operating expenses of a business
  • Hardware Replacement coverage is included for computer hardware or tangible equipment damaged as a result of a cyber event

Some points to consider when discussing Cyber Risk with your clients

Dealing with a ransomware incident is rarely a simple matter of the ransom payment being made and the business in question automatically regaining access to their systems and data. Even after a ransom payment has been made, and assuming the system can be successfully decrypted, the ransomware can have the unintended side effect of severely impairing the functionality of one or more of a business’s vital systems.

The use of legacy systems can significantly increase the risk of a cyber loss. Generally speaking, legacy systems are not only far more vulnerable to attack, they are also much more susceptible to dysfunction following a cyber attack.

The importance of having data re-creation cover is becoming increasingly apparent. Many cyber policies only provide cover for the cost to recover or restore data from back-ups, but not the costs to re-create or re-enter lost data from scratch. The bulk of the costs to a claim can come from the labour costs associated with manually re-entering data, and brokers should be sure to check that their clients have this important cover in place.

Almost all modern businesses have some form of cyber exposure. Even if a policyholder does not solely rely on their computer systems to carry out work, they will still have an office function that playing a key role in the running of the business. When the computer systems in an office are affected by a cyber event it will almost certainly have a negative impact on the overall business operation and having a cyber insurance policy in place will provide a valuable safety net for the company.

James Hallam can place cyber insurance in the London Market for business domiciled almost anywhere worldwide so please feel free to get in touch if you would like us to assist you and your clients.

Seventeen Group Announces Specialist Broker Acquisition in Kent
Seventeen Group Announces Specialist Broker Acquisition in Kent 1920 1280 James Hallam

Seventeen Group has announced that it has acquired Everard Insurance Brokers Limited (‘Everards’) on the 2nd July for an undisclosed sum.

Everards are based in West Malling Kent and was established in 1969. It is a specialist marine and marine trades broker as well as handling general clients. Everards controls gross written premium of £10 million.

The vendors Stephen Roper and Tim Gilbert plus all staff will be remaining with the business which will continue to operate out of the existing West Malling premises and operate as a specialist division within Seventeen Group’s broking subsidiary James Hallam Limited.

Stephen Roper, MD of Everards comments “We thought long and hard about the type of broker we would want our staff and clients to join and James Hallam within Seventeen Group felt like the right choice from the outset”. Fellow Everards Director Tim Gilbert adds “Having developed the business and its reputation over many years we are keen to see these foundations built upon. We can add enormously to James Hallam in terms of our specialist knowledge and will likewise gain from being part of a specialist dynamic Group”.
Seventeen Group is a privately owned insurance Group which includes James Hallam insurance brokers, Touchstone Underwriting and 4Sight Risk Management.

Paul Anscombe, Chief Executive Officer of Seventeen Group comments “The acquisition of Everards is consistent with our strategy of growing and creating specialist lines of business. The team in West Malling are hugely knowledgeable in their field and are ambitious to grow the business. Everards have excellent relationships with their key insurers which we are keen to maintain and to expand the product range”.

Anscombe further adds “We were supported in this transaction by Paul Hambrook and the Clydesdale Bank insurance team and we will seek to work with Clydesdale on future opportunities going forwards. We are also grateful to Gary Medcraff of Darwin Smith for introducing Everards to us. Successful acquisitions require experienced business partners and there is no doubt that both Clydesdale bank and Darwin Smith were instrumental in helping both parties achieve our desired outcomes”.

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