In the shipping industry, accidents involving vessels are never expected. However, when a loss does occur, a company’s immediate attention usually turns to the Marine Hull Insurance claims process.
Not a few ship owners felt disappointed because the compensation they received was far below their expectations.
However, in many cases, the cause isn’t simply the insurance company refusing to pay. In fact, the root of the problem often arises long before the accident occurs, namely when the policy is first drawn up.
As a media that discusses risk management and the insurance industry, LigaAsuransi.com sees that there are still many shipping companies that view…Ship Insuranceas an administrative obligation, not as part of an asset protection strategy.
As a result, important decisions are made based solely on premium prices, without understanding how each policy provision will work in the event of a loss.
Marine Hull Insurance Policy Is a Risk Management Contract
Marine Hull Insurancebasically designed to provide protection against physical damage to ships due to various shipping risks.
However, this protection does not stand alone.
The amount of compensation is influenced by many factors, starting from the insured value, policy clauses, shipping area, to the obligations that must be fulfilled by the insured.
Therefore, two ships of the same type will not necessarily receive identical coverage even if they are insured by the same company.
This is what many ship owners often don’t understand.
The Four Most Common Mistakes
Based on various practices in the marine insurance industry, there are several mistakes that are most often found when companies purchase policies.
1. Ship Value Not Updated
The value of a ship is not a fixed number.
Changes in material prices, the cost of building new ships, inflation, and the condition of the used ship market can affect its economic value.
When a vessel is insured well below its actual value, there is a possibility that the principle ofunder insurance, so that claim payments are made proportionally.
This error often occurs because companies use book value or old purchase price as the basis for coverage.
2. Too focused on pursuing cheap premiums
Keeping operational costs down is a reasonable business decision.
However, in insurance, cheaper premiums are often obtained with certain consequences, for example increasing the deductible or limiting the scope of coverage.
If these aspects are not analyzed properly, premium savings can actually turn into additional costs when a loss occurs.
3. Operational Changes Not Followed by Policy Adjustments
Shipping activities are dynamic.
Vessels may change operating areas, carry different types of cargo, or obtain new contracts in previously unplanned shipping areas.
These changes should also be accompanied by an evaluation of the Marine Hull Insurance policy.
Otherwise, there is a possibility that some risks are outside the scope of the agreed protection.
4. Policy Clauses Never Studied
Marine Hull Insurance contains various technical clauses that have major consequences on the claims process.
Terms such asGeneral Average, Constructive Total Loss, Sue and Labour, as well asCollision Liabilityoften considered a difficult legal term to understand.
In fact, it is precisely these clauses that determine how the company obtains its rights when a loss occurs.
The better the understanding of the contents of the policy, the less likely it is that differences in perception will arise when a claim is submitted.
Learning from Frequent Cases
In the shipping industry, there have been numerous cases where companies felt they had purchased adequate coverage, only to discover deficiencies after an accident occurred.
For example, a vessel is insured at a value that no longer reflects current market conditions.
When a collision occurs and major damage occurs, the claim payment turns out to be less than expected due to provisions regarding the shortfall in insured value.
Cases like this show that regular policy evaluation is as important as paying premiums on time.
Why Are Policy Reviews Becoming More Important?
Shipping companies today are facing much more rapid change than they did a few years ago.
The shipping route has changed.
Transportation contracts are evolving.
Asset value increases.
Operational risks are also becoming more complex.
Unfortunately, many companies still use insurance programs that were created years ago without ever conducting a review.
However, small changes in operational activities can affect the effectiveness of the protection provided.
Conducting regular policy reviews is a preventative measure that can help identify potential gaps in coverage before losses occur.
Insurance Brokers Go Beyond Just Handling Policy Placement
In international practice, insurance brokers function as risk consultants who help companies design protection programs according to their business characteristics.
Brokers don’t just compare premiums from multiple insurance companies.
Moreover, brokers help evaluate coverage needs, explain the contents of policy clauses, negotiate with the insurer, and assist with the claims process in the event of a loss.
This is the approach that shipping companies are increasingly using to ensure that their Marine Hull Insurance program actually provides benefits when needed.
Conclusion
Marine Hull Insurance is not just an instrument to fulfill contract or financing requirements.
The policy is part of a strategy to maintain business continuity when the ship experiences risks.
Therefore, the decision to purchase insurance should not only consider the premium amount, but also the quality of protection provided.
Understanding the policy’s contents, evaluating the vessel’s value, tailoring coverage to operational activities, and obtaining assistance from an experienced broker are steps that can help minimize the potential for future claim disputes.
Want to Make Sure Your Boat Insurance Program Is Right?
For shipping companies, shipowners, ship operators, and parties who want to evaluate the programMarine Hull Insurance, conducting an independent policy review is a step worth considering before the coverage period ends.
As a media that focuses on insurance industry education,LigaAsuransi.comrecommends consulting with an insurance broker who has experience in maritime risks so that the protection program can be tailored to the company’s operational characteristics.
One of the insurance brokers who has experience in handling risks in the shipping sector isL&G Insurance BrokerThe L&G team can help evaluate existing policies and provide recommendations for program development.Marine Hull Insuranceaccording to business needs.
Contact L&G Insurance Broker:
📱 WhatsApp: 0811-8507-773
