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 as well as the machinery which is part of them.
A very important provision of hull and machinery insurance is the running down clause, also referred to as “the collision liability” provision. Just as its name suggests, it protects the owner of the craft against legal liability which 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.
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.
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