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Hull and Machinery Insurance Explained

Hull and Machinery Insurance Explained - ALIGNED Insurance Brokers
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What is Hull and Machinery Insurance?

Just as the comprehensive coverage in auto insurance protects the insured individuals against physical damage to their cars, so does hull and machinery insurance provide physical damage protection for the ships or vessels and the machinery which is part of them.

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


Hull and Machinery Insurance Explained - ALIGNED Insurance Brokers
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Characteristics of Hull and Machinery Insurance

  • Hull and machinery insurance is a type of ocean marine insurance. This 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.

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In depth: what you need to know about collision liability

A very important provision of hull and machinery insurance 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 is the liability that may arise out of 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 or 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. 

Contact an ALIGNED advocate to learn more about hull and machinery insurance or get a free quote started right away by using our simple online tool.

Hull and Machinery Insurance FAQ

Is Hull and Machinery insurance compulsory?

The short answer is “No.” But just because 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. And even if your boat isn’t harmed by natural forces, a crash into another vessel can cause serious damage. 

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

Or put another way, while hull and machinery insurance may nont 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 veseel 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. And the policy can also cover a range of vessels that operate in waterways like tugboats or floating machinery to name a couple of examples.  

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

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 you’re considering your repair and/or replacement options. 

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What more info about related coverages? Check out these informative reads…

ALIGNED brokers understand the nuances of commercial insurance coverages and can help you make informed decisions about your business insurance options. Bookmark our insurance info blog to keep current with Canadian insurance insights.


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