Hull and Machinery

As a mutual organisation, the Shipowners’ Club exists to serve its Membership, seeking to provide the cover that they require and to provide Members with a first class service – to ensure their peace of mind. In order to respond to Members’ needs and to maintain our market leading position, the Club has acquired Waterborne Underwriting Agency Limited and is proud to now offer Hull and Machinery (H&M) cover to Members domiciled in the UK and Ireland.

What is H&M insurance?

H&M insurance is a specialised form of marine insurance designed to cover physical loss of or damage to the Vessel, including machinery and fittings. Whether you own, operate, or manage a commercial ship, fishing vessel, yacht, or any other type of maritime craft, H&M insurance is crucial for safeguarding your investment and operations on the water.

What does H&M insurance include?

H&M insurance typically provides coverage for:

Physical damage to the vessel

This includes damage caused by collisions, grounding, fires, storms, or other marine perils. The policy covers the ship's hull, superstructure and fittings.

Machinery damage

Coverage extends to the ship's machinery and equipment, such as engines, generators, and other essential operational systems. If these components suffer loss or damage due to covered risks, the insurance can cover the repair or replacement costs, depending on the degree of coverage purchased.

Port risks

Coverage typically extends to incidents that occur while the vessel is in port, including damage during loading and unloading operations, and while the vessel is moored.

Total loss

In the event of a total loss, where the vessel is completely destroyed or rendered beyond repair, H&M insurance compensates the insured value of the ship.

Salvage costs

The cost of recovering vessel from the scene of an accident/incident and moving it to a suitable repair yard typically forms part of a H&M policy claim.

Collision liability

This aspect covers the shipowner's liability for damage caused to other vessels in the event of a collision. It includes legal expenses and compensation that may be required.

Traditionally H&M policies covered collision liability up to a limit of 3/4ths of the H&M insured value. However, nowadays the collision liability is more often included entirely in the vessel’s separate P&I policy.

The Waterborne approach

Waterborne H&M coverage conforms to the list provided under 'What does H&M insurance include?' when Waterborne is also providing a full P&I policy for the vessel through the Shipowners' Club.

However, sometimes a customer may only require a more limited form of P&I coverage, typically when they do not have any paid crew on board and do not carry any third party owned cargo or any fare-paying passengers. In such cases Waterborne can include a more limited form of P&I coverage within the H&M policy. This coverage includes, inter alia, Collision Liability (collision with other vessels as well as fixed and floating objects), Third Party Bodily injury and Removal of Wreck Liability. It can also be extended to include carriage of a small number of non-fare-paying third parties, such as officials or surveyors carried in connection with the vessel’s commercial operations.

This coverage is most suited to smaller vessels, as it excludes Pollution Liability and the limit is normally GBP 1,000,000 any one accident or occurrence, extendable to GBP 2,000,000 for a small additional premium.

Support from Lloyd's

As the Club is offering H&M cover through an MGA (Managing General Agent), Waterborne, it avails itself of Lloyd's licensing. Waterborne was established over 20 years ago and has been acquired by the Club to facilitate the provision of H&M cover. Waterborne is supported by a panel of Lloyd's underwriters and cover will be provided through that vehicle, using the Shipowners’ Club systems. The H&M risk will therefore be borne by the Lloyd’s panel.