Machinery and Hull Insurance Explained

What is Hull and Machinery Insurance?

Just as the comprehensive coverage in auto insurance protects insured individuals against physical damage to their cars, so does hull and machinery insurance. Hull and machinery insurance provides physical damage protection for the ships, vessels, and their machinery.

Since the soundness and normal operation of the hull and machinery of a ship are key to the safe transportation and delivery of any cargo or freight, it is highly advisable that ship owners purchase hull and machinery insurance.

Characteristics of Hull and Machinery Insurance

  • Hull and machinery insurance is a type of ocean marine insurance. This hull coverage protects the insured vessel or fleet against physical damage caused by a peril of the sea or other covered perils while the vessel is in transit over water.
  • Although the most commonly insured vessels are those operating in the ocean or the sea, hull and machinery insurance can cover vessels that work in any kind of waterway. For example, tugboats, barges, floating machinery, and even oil rigs which operate in coastal areas.
  • Hull and machinery insurance policies can be written to cover a single vessel or the whole fleet of a ship owner.
  • A deductible specified in the policy declarations is payable in the event of a hull and machinery insurance claim.

In depth: what you need to know about collision liability

A very important hull and machinery insurance provision is the running down clause, also known as “the collision liability” provision.

As its name suggests, this clause protects the owner of the craft against legal liability. This liability may arise from the owner’s vessel colliding with another ship and damaging its property or cargo.

It is very important to note that the collision liability clause does not apply to legal liability arising out of bodily injury, death, or property damage to fixed installations such as piers.

If you wish to get insurance against this kind of liability, you will need to purchase protection and indemnity coverage.

In short, we can help with all of your hull and machinery insurance needs

Business insurance is what we specialize in. When you choose to work with us, you get an advocate who works with Canada’s top insurance companies to get you comprehensive coverage for your commercial liability and business risks at competitive rates. 

ALIGNED business insurance experts can save you time, money and the hassle of shopping around for the best hull and machinery insurance. 


Hull and Machinery Insurance FAQ

Is Hull and Machinery insurance compulsory?

The short answer is “No.” But just because commercial hull and machinery insurance is optional, that doesn’t mean you shouldn’t get it.

Major bodies of water like oceans, rivers, and lakes can be unpredictable. Even if natural forces don’t harm your boat, a crash into another vessel can cause serious damage.

Covering repairs to your vessel’s hull out of pocket can be costly. Hull and machinery insurance lets you insure your vessel and/or its machinery from physical damage, making it easier to keep your boat in excellent condition.

In another way, while hull and machinery insurance may not be mandatory, it can make owning a water-based vessel easier.

What is covered under hull insurance?

Hull and machinery insurance primarily addresses two things:

  1. Physical damage done to your ship or vessel. This can include fire damage, storms, and other perils.
  2. Collision liability liability. In the event that your boat collides with another vessel and damages property and/or cargo in the process, this provision could protect you against legal liability.

It’s possible to take out hull insurance on a fleet of vessels owned by a single owner. The policy can also cover various vessels operating in waterways, like tugboats or floating machinery.

How is a hull insurance premium calculated?

When it comes to calculating your premium, your insurance professional will need to look at a number of factors. Some of these may include details such as:

  • The depth of your port
  • The construction quality of your vessel
  • The presence of tide protection and anchorages at your port
  • The replacement cost of your vessel
  • The type of usage of your vessel

While you’ll have to contact an ALIGNED broker to get an exact number, the general rule of thumb is that the more shipshape your vessel is, the lower you can expect your premium to be. To get a sense of what you can expect to pay, contact us for a free hull insurance quote

What is increased value in marine hull insurance?

Increased value marine hull insurance is a coverage feature that allows you to insure the mortgage value of your vessel instead of the market value. What this means in practice is that depending on the situation, you may be able to claim damages and/or seek to replace your vessel at a higher dollar amount than you would be able to on a market-based valuation. 

From a vessel owner’s perspective, being able to claim for a higher dollar amount can make all the difference when considering your repair and/or replacement options.

It’s time to get insurance value and choice aligned. Want Canadian business insurance that aligns with your bottom line? We can help. Call us toll-free at 1-866-287-0448 or click to Get a Quote!

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