What can be insured

Sea and river vessels of all types are insured — cargo and passenger ships, tugs, fishing vessels, service craft — as well as yachts, motorboats and other small craft. The subject of insurance is the policyholder's financial interest in damage to, loss of or destruction of the vessel, including its machinery and equipment. Freight and cargo can be insured separately.

Marine insurance is governed by Chapter XV of the Merchant Shipping Code of the Russian Federation; insurance of inland vessels and small craft is governed by the general rules of Chapter 48 of the Civil Code and insurers' rules.

Hull insurance conditions

Russian practice uses several standard conditions that define the scope of the insurer's liability:

  • "Total loss and damage" — the widest cover: total loss of the vessel, damage, salvage and loss-prevention costs, the vessel's contribution to general average.
  • "Damage only" — partial damage, without total loss.
  • "Total loss only, including salvage costs".
  • "Total loss only" — the minimum and cheapest cover.

Insured events

A typical list of events for which damage, loss or destruction of the vessel is compensated:

  • grounding, collision, striking a berth or floating object;
  • fire, explosion, spontaneous combustion;
  • storms and other natural disasters;
  • a transport incident while under way causing harm to people, other vessels, structures or cargo;
  • theft or hijacking;
  • unlawful acts of third parties.

Additional costs

The policyholder can additionally insure:

  • the cost of searching for a vessel presumed missing after the maximum voyage time has been exceeded;
  • emergency rescue operations in the area of the casualty;
  • delivering personnel, materials and equipment to the repair site or towing the vessel to the repair site by the most economical means;
  • trial runs after repair needed to confirm fitness for service;
  • returning the vessel to its home port or the nearest suitable port.

Shipowner liability

Hull insurance protects the vessel itself but does not cover third-party claims. For that there is shipowner liability insurance, known internationally as P&I (Protection and Indemnity). It covers:

  • harm to the life and health of crew, passengers and third parties;
  • damage to cargo;
  • environmental pollution;
  • wreck removal;
  • damage to port facilities and other vessels.

For certain categories of vessels, the law requires compulsory insurance or other financial security for liability — for example, for oil pollution damage. Passenger carriers by water must insure their liability under Federal Law No. 67-FZ (OSGOP — compulsory carrier liability insurance).

Yachts and small craft

For private owners, insurers offer simplified programmes: yacht or motorboat hull cover, third-party liability and personal accident cover for passengers. They take into account the navigation area, seasonality, winter storage location and the skipper's experience.

What determines the price

  • the chosen insurance conditions and list of risks;
  • the vessel's type, year of build, displacement and class;
  • the navigation area and territory of cover;
  • crew qualifications and technical condition;
  • loss history and the deductible.

The sum insured is the maximum amount of the insurer's liability when an insured event occurs. It is usually set at the market value of the vessel.

For a fleet of several vessels it is convenient to conclude a single contract for the whole fleet: administration is simpler, and the rate may be lower thanks to volume.

Tips for shipowners

  1. Check that the navigation area in the policy matches the actual geography of voyages.
  2. Maintain the vessel's class and documents — their absence is a common ground for refusal.
  3. Notify the insurer of a change of flag, owner or management company.
  4. Insure cargo under a separate contract — hull insurance does not cover it. See Cargo insurance.

More about the products in the Watercraft section. To get offers from insurers, submit a request.