Liga Asuransi – Hello Risk Taker, how are you? I hope you and your business are always in good and smooth condition. On this occasion, I would like to discuss the shipping industry, which from the past until now has always experienced an increase due to the increasingly fast pace of industry and trade. And on the other hand, of course, the level of risk that will be faced will be even more significant, and this is what makes the ship players worried. If something happens to the ship and cargo later on the trip, how much will it lose if that happens? Of course, it’s enormous.
Therefore, on this occasion, I would like to discuss the types of shipping insurance that shipping business people must know because this can be your savior from substantial financial losses.
In the shipping industry, not only general cargo ships are famous. There are many other types of boats, for example, container ships, bulk carrier ships, log carrier/timber carriers, warships, tug boats, dredger ships, research ships, hospital ships, cruise ships, ferries, etc. Each of these boats is worth tens or even hundreds of billions if assessed in terms of money. Such a fantastic value, and if proper risk management is carried out, it is like us releasing our young children into the middle of a crocodile nest, ready to prey. So it is necessary to have ship insurance that will provide partial or complete protection to your ship.
Ship insurance is a form of insurance that the owners and managers of ships must own. In Indonesia, the general public still needs to learn about this type of insurance. Ship insurance provides guarantees not only for the ship but also for what is inside, starting from machinery, workers, cargo, and passengers. And it can also protect parties outside the ship which can be affected by disasters that might be experienced by the ship, for example, ship dock owners and third parties involved in ship accidents.
With ship insurance, ship owners will receive coverage for all risks due to hazards at sea on certain voyages within a specific time.
In anticipation of an accident or ship damage, ship owners must have ship insurance. This has been stipulated in the Circular Letter of the Directorate General of Sea Transportation noUM.003/94/16/DJPL.15 dated 30 November 2015, which states that ships that are eligible to be insured are ships that have a gross weight of over 35 tons and the scope of domestic shipping. Internationally it has also been regulated. The International Nairobi Convention dated 14 April 2015 states that ships traveling abroad with sizes over 300 GT and types of wooden ships are required to have insurance for the removal of ship hulls.
In Indonesia, the Director General of Sea Transportation has also instructed that if the ship owner ignores these provisions, he will be subject to administrative sanctions. Starting from warnings and freezing permits to revocation of operating permits. If they continue not to follow instructions, ship owners also run the risk of not getting operational services, such as guidance, berthing, and loading and unloading.
Types of Ship Insurance
Risk takers carrying out shipping activities have a high risk. Understanding these conditions, an insurance broker with experience in shipping is ready to help ship owners and managers minimize the impact of losses due to risks in transit. Ship insurance provides comprehensive protection against various risks during ship-building and transporting goods at sea. What are the types of insurance? Read more in the following section!
- Builders Risk Insurance
Builder’s Risk Insurance is specifically designed to protect construction or renovation properties during construction. This provides protection against loss or damage that may occur in a construction project, such as fire, theft, inclement weather, or structural damage.
Builder’s Risk Insurance is usually purchased by property owners, general contractors, or project owners to protect their investment during construction. This policy is valid for a certain period, usually from the start of construction until the project is completed or the property is handed over to the owner.
The protection provided by Builders Risk Insurance covers damage to building structures, construction materials and equipment, and legal liability that may arise from such losses. This policy may cover risks such as fire, theft, hurricanes, earthquakes, explosions, or damage due to faulty construction work.
Builder’s Risk Insurance is often a standard requirement in construction contracts and may also be required by lenders or mortgages. Insurance premiums are usually based on the value of the construction project and the associated risks.
- Marine Cargo Insurance
Marine Cargo Insurance protects the sender or owner of goods against loss or damage during shipping by sea, air, or land. This protects against risks such as shipwreck, fire, theft, physical damage, or loss of goods during transit.
Marine Cargo Insurance is generally purchased by exporters, importers, or goods owners to protect the value of shipped goods. This includes all types of cargo, including general goods, manufactured products, vehicles, raw materials, or other goods of value.
Marine Cargo Insurance policies can be adjusted according to the needs of the sender or owner of the goods. Some policies cover only the goods in transit from point A to point B. In contrast, others can provide a broader range of protections, including temporary storage in a warehouse or road transportation after the goods arrive at the destination port.
Marine Cargo Insurance insurance premiums are usually determined based on the value of the goods sent, the type of cargo, the shipping route, the method of transportation, the conditions of packaging, and the associated risks. This insurance may also cover additional costs such as salvage costs, handling costs for damaged cargo, or replacement costs for lost items.
Marine Cargo Insurance is an essential tool in international trade to protect the interests of shippers or owners of goods and provide peace of mind throughout the shipping process.
- Protection and Indemnity Insurance
Protection and Indemnity (P&I) Insurance protects ship owners, operators, or related parties against risks related to ship operations, legal liability, and claims arising in the shipping industry.
P&I Insurance covers various risks that may be faced by ship owners or operators, such as damage to the ship, accident or loss of cargo, legal liability to third parties such as environmental loss, loss of life or bodily injury, or damage to dock facilities.
The protection provided by P&I Insurance covers the following:
- Damage to the ship: Protect the ship’s owner against damage or loss that occurs to the ship itself, including repairing or replacing a damaged ship.
- Cargo: Protect the ship owner or the party responsible for cargo shipment against damage, loss, or damage that may occur during transportation.
- Legal Responsibilities: Protect the owner or operator of the ship against claims or lawsuits arising from the operational activities of the ship, such as claims for compensation from third parties who suffer losses or injuries due to ship activities.
- Environmental Protection: Protect ship owners or operators against claims or costs arising from environmental damage caused by ships, such as oil spills or marine pollution.
- Employee Protection: Protect the owner or operator of the ship against claims or claims filed by the crew regarding injuries, disabilities, or death that occur while working on the ship.
P&I insurance premiums are usually determined based on the type of vessel, vessel size, operating area, claims history, and associated risks. This insurance is managed by P&I Clubs, associations of ship owners who share risks and offer P&I Insurance protection to their members.
- Marine Hull and Machinery Insurance
Marine Hull and Machinery Insurance are specifically designed to protect ship owners against the risk of damage, loss, or loss arising from the physical part of the ship and its engines. This insurance focuses on protecting the ship itself and its mechanical components.
Marine Hull and Machinery Insurance cover various risks that may occur on ships, including but not limited to:
- Physical Damage: Protect the owner of the ship against damage or loss caused by collision, contact with complex objects, accidents while berthing, fire, storm damage, or other actions that can physically damage the ship.
- Loss or Loss of Kapal: Protecting ship owners against total losses or loss of ships during shipping activities. If the ship is permanently lost, the owner will receive compensation payments according to the insurance value.
- Machine Damage or Loss: Protect the ship’s owner against damage or loss of machinery in the boat. This includes damage to the main engines, auxiliary engines, propulsion systems, and other mechanical equipment required to operate the ship.
- Rescue Fees: If the vessel is damaged or stranded, Marine Hull and Machinery Insurance can cover salvage costs to salvage or recover the vessel from the situation.
Marine Hull and Machinery Insurance premiums are determined based on the value of the ship, age of the ship, type of ship, condition of the ship, use of the ship, area of operation, and history of claims. This insurance provides essential protection for ship owners to reduce financial risks that may arise due to damage or loss of ships and engines.
- Marine Operation All Risks Insurance
Marine Operation All Risks Insurance (MOAR) is designed to provide comprehensive protection against risks associated with maritime operations and marine activities in general. MOAR includes protection against damage, loss, or loss to ships, naval facilities, and related assets during operations at sea.
MOAR provides “All Risks” protection, meaning risks not explicitly excluded in the insurance policy will be covered unless specific exclusions are listed.
The protection provided by Marine Operation All Risks Insurance includes, but is not limited to:
- Damage to the ship: Protect the owner of the ship against damage or loss caused by collision, fire, accident while berthing, lousy weather, engine failure, or other factors that can damage the ship during operation.
- Loss or Damage of Cargo: Protect the ship owner or the party responsible for cargo delivery against the risk of cargo loss, damage, or theft during transportation.
- Legal Responsibilities: Protect ship owners against claims or lawsuits arising from maritime operations, including the liability to third parties who may experience loss or injury due to operational activities.
- Environmental Protection: Protect ship owners against legal liability and costs from environmental damage caused by ship operations, such as oil spills or marine pollution.
- Rescue Fees: MOAR may cover salvage costs to save ships or other assets from hazardous situations or damage incurred during operations.
MOAR insurance premiums are determined based on the type of maritime operation, the value of the assets to be accounted for, the risks involved, and the history of claims. MOAR provides broad and essential protection for maritime companies, ship operators, and asset owners to reduce financial risks that may arise during operations at sea.
CONCLUSION
In conclusion, the operation of the shipping industry has risks and challenges that can significantly impact the financial interests of investors and owners. Therefore, insurance broker services are needed to mitigate these risks.
An insurance broker with experience in the marine and shipping industry, offering the essential industry expertise and knowledge to deal with the unique risks associated with the shipping industry. They carry out thorough risk assessments, customize insurance solutions, and provide valuable guidance to ensure adequate coverage to protect the financial interests of stakeholders.
With access to a broad network of insurance providers, insurance brokers can obtain competitive quotes and coverage options, giving investors, owners, and contractors the power to choose the insurance that best suits their shipping business. The broker’s policy review and analysis ensures comprehensive coverage, addressing potential gaps or areas needing attention.
In addition, insurance brokers act as advocates during the claims process, assisting clients in documentation, communication, and negotiations for fair and timely compensation in the event of an insured loss. The broker’s Ongoing risk management support helps clients stay informed about changes in the insurance market, the regulatory landscape, and emerging risks, enabling them to adapt their scope and risk management strategy as needed.
Ultimately, insurance brokers provide peace of mind for investors, owners, and contractors involved in solar power generation. By leveraging their expertise, industry knowledge, and network, insurance brokers play a critical role in safeguarding the financial interests of stakeholders, increasing project resilience, and contributing to the long-term success of the solar industry.
One of Indonesia’s leading insurance broker companies focusing on solar power generation is L&G Insurance Broker.
For all your insurance needs, contact L&G Insurance NOW!
—
LOOKING FOR INSURANCE PRODUCTS? DON’T WASTE YOUR TIME AND CONTACT US RIGHT NOW
L&G HOTLINE 24 HOURS: 0811-8507-773 (CALL – WHATSAPP – SMS)
website: lngrisk.co.id
E-mail: customer.support@lngrisk.co.id
—
