Marine Insurance Terms Simplified

Preston Cavignac, CPCU, CRM, CIC
HULL – Hull Insurance

  • Insures a vessel against physical damage. It’s similar to physical damage coverage for your auto.

P&I – Protection & Indemnity

  • Provides liability coverage for a vessel and can sometimes include additional coverages. It’s similar to liability coverage for your auto.
  • P&I insurance can also provide coverage for cargo legal liability, collision (if not already in place through Hull Insurance), liability for passengers’ baggage, Jones Act, Alternate Employer Endorsement, etc.
    • Jones Act – liability remedy for employees to sue vessel owner or operator. Employer has to prove there was no negligence on their part. This is a Federal Act.
    • Alternate Employer Endorsement – A Workers’ Compensation endorsement that provides an entity scheduled as an alternate employer with primary Workers’ Compensation and Employers Liability coverage as if it were an insured under the policy.

MEL – Maritime Employers Liability

  • Provides Employers Liability coverage arising out of employees working on a 3rd party vessel or a 1st party vessel when they are not considered captain or crew.
  • These employees may not qualify as “seamen” as it pertains to the vessel they are working on, however, they still may be subject to Admiralty Law. MEL fills that gap.
    • “Seaman” – must be masters and members of a crew. A seaman’s duties must contribute to the function or mission of a vessel (or fleet of vessels under common ownership or control) in navigation, and a seaman has to have a connection to the vessel (or fleet of vessels) that is substantial in terms of both its nature and duration.

USL&H – United States Longshore and Harbor Workers’ Compensation Act

  • Provides medical and wage coverage for employees who work on or near navigable water and are engaged in maritime employment.
  • This coverage is similar to Workers’ Compensation, however, it is a federal vs. a state Act. Companies often need both USL&H and Work Comp to comply with federal and state laws.

MGL – Maritime General Liability

  • Provides General Liability coverage for those companies who have marine exposure, but who do not generate income from owning and operating vessels.
  • Provides coverage for ship repair, terminal operator, marine construction, wharfingers, and stevedores.
    • Stevedores – a person who loads/unloads cargo from ships
    • Wharfingers – the owner of a wharf/dock

Marine Insurance is different than standard property and casualty insurance. Companies have to deal with statutory laws, federal laws and admiralty laws. It can be ambiguous, so the first step is to get a basic understanding of the terms.