Marine Insurance Facts  

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Marine Insurance Facts

United Marine Insurance is primarily engaged in arranging insurance cover for commercial marine risks, including for marine hull and liability and marine related enterprise.

The following explanation of 'marine insurance facts' primarily concerns commercial marine insurance matters rather than recreation marine risks such as for pleasure-craft.

Introduction to Marine Insurance

Each country typically have their own laws dealing with insurance matters however, marine insurance is peculiar in that by the very nature of international marine transit there are common factors governing marine insurance across the world, expressed as 'over the seabed and the ocean floor'

While each country has its own 'consumer protection' based insurance laws applying to pleasure-craft and similar locally registered non-commercial vessels moored or flagged in that jurisdiction, commercially operated vessels will most likely be subject to
'Admiralty Law' which is generally silent on matters of consumer protection.

Introduced in England in the mid 1700's, most common law based countries have an Admiralty division attached to their higher Courts which tend to follow the English statutes and case law but, not in every case.

Admiralty Courts assume jurisdiction by virtue of the presence of a vessel being in its territorial jurisdiction irrespective of whether the vessel is national or not and/or whether registered in the specific country or not and wherever the residence or domicile or their owners may be.

Some of the common primary aspects of marine insurance across the world are;

Seaworthiness of a Vessel
Limitation of Ship owner's Liability
Personal injuries to passengers
Cargo Claims
Personal injuries to Seamen & Maintenance and cure
Maritime Liens and Mortgages
Salvage and Treasure Salvage
Marine Pollution
War Risks
Terrorism & Piracy

That means, an Australian vessel in New Zealand waters could be subject to New Zealand Admiralty laws and visa versa - the same if an Australian vessel is operating in Indonesian waters it would be subject to Indonesian laws.

However, from the perspective of an operator's marine insurance cover, will their insurance cover include decisions made under the laws of a different country? - In a surprising number of circumstances no.


A New Zealand owned game fishing boat, crewed by New Zealanders, undertakes a one month charter in Vanuatu waters. Before departing NZ the Game Boat's owner arranges an extension of insurance cover from their local NZ insurance company to include Vanuatu's Territorial Waters.

While moored in Vanuatu, the vessel comes adrift in high winds, colliding with other vessels before becoming beached. Claims for damage are made against the NZ Game Boat from the other damaged vessels owners - which law applies?

Liability usually only arises as a result of negligence, but not in every case because each country applies its laws differently thus, if there were to be a difference between the subject laws of Vanuatu and New Zealand, would the NZ Game Boat's insurer pay the claim, indeed would they defend a case if it were to proceed to court in Vanuatu.

The NZ Game Boat's insurance policy may only cover legal liability arising under New Zealand laws, not another country's laws which might have 'no fault liability' as opposed to negligence based laws.

While the NZ insurer may pay for repairs to the NZ Game Boat, it may not be obligated to pay for the damage caused to other vessels thus, potentially leaving the NZ Game Boat's owner adrift. [so to speak]

In fact, we have seen cases where owners of vessels have been injuncted from leaving a country until damages are paid, forcing one to have to abandon their vessel to the effective ownership of the owners.

Given that maritime vessels can be flagged in a number of jurisdictions there became a need to have common rules and laws that transcended across boarders and territories which in affect guaranteed uniformity of primary marine requirements for vessels and their operators to abide by, from navigation procedures through to seaworthiness and marine insurance liability.

The 'United Nations Convention on the Law of the Sea' in 1982 established the framework for the the 'International Tribunal for the Law of the Sea' (in the Hague) to adjudicate disputes under an agreed Convention which provides an effective international regime over the seabed and the ocean floor beyond a clearly defined national jurisdiction by the recognition of a comprehensive legal framework to regulate all ocean space, its uses and resources.

It contains, among other things, provisions relating to the territorial sea, the contiguous zone, the continental shelf, the exclusive economic zone and the high seas.

It also provides for the protection and preservation of the marine environment, for marine scientific research and for the development and transfer of marine technology. One of the most important parts of the Convention concerns the exploration for and exploitation of the resources of the seabed and ocean floor and subsoil thereof, beyond the limits of a country's national jurisdiction.

Finally in this regard, vessels of any type, recreational or commercial, which travel on the high seas beyond their home county's territorial waters are likely to become subject to the 'United Nations Convention on the Law' and/or the Admiralty laws of the particular jurisdiction's waters they are traveling in at any time.

These are some of the issues requiring specialist marine insurance advice from a marine insurance expert such as United Marine Insurance.

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