Marine Insurance 水險

Marine Cargo Insurance 海上貨物保險

Marine cargo insurance mainly protects the goods, with additional cover for general average contributions and salvage charges. Hong Kong policies commonly use Institute Cargo Clauses: ICC (A) provides all risks own damage cover, ICC (B) covers specified risks and ICC (C) covers fewer specified risks. Banks financing shipments usually require ICC (A). Warehouse to warehouse cover normally runs from departure from the sender's premises to final storage, including connected land and sea transport. Premiums are usually a percentage of the amount insured; the insured's identity and loss record matter particularly for large turnovers.

ICC (B) and ICC (C) both cover specified major casualties, such as fire, stranding, sinking and collision, together with discharge at a port of distress, jettison and general average sacrifice. ICC (B) additionally covers earthquake, volcanic eruption, lightning, washing overboard, entry of sea, lake or river water, and total loss of a package during loading or unloading. Both expressly exclude deliberate or wrongful acts by any person. By comparison, cargo damage from a fire deliberately started by someone other than the insured or claimant can be recoverable under ICC (A).

All risks cover still has exclusions: the insured's wilful misconduct, inevitable losses such as wear and tear or ordinary loss in weight, inadequate packing, and inherent vice arising from the goods' own qualities. Loss caused by the carrying vessel's unseaworthiness is also excluded where the insured knows of it at loading. War and strikes are normally excluded but can be insured for an extra premium under Institute War and Strikes Clauses. War cover has a waterborne limitation: goods out of the water are outside that cover.

In marine insurance, average means partial loss, unlike the underinsurance penalty found in other property insurance. Particular average is a partial loss other than general average. General average involves an extraordinary sacrifice or expenditure made voluntarily and reasonably during peril to preserve the shared interests in ship and cargo; sacrifice is physical loss, while expenditure is a cost. The act must successfully prevent total loss of the whole adventure for contribution to arise. The parties whose interests are saved contribute proportionately, and the owner claiming for the sacrifice also bears their own share. This contribution liability is commonly insured.

Marine Hull Insurance 船舶保險

Marine hull insurance, also called hull and machinery insurance, protects the hull, equipment, stores, propulsion fuel and safety boats. Institute Hull Clauses normally cover specified perils, such as perils of the seas, fire and explosion. Insured repairs are generally settled new for old, without deductions for wear and tear or depreciation. War and nuclear risks are normally excluded; war and strikes can be insured under separate Institute Clauses. Premiums depend heavily on the individual insured's claims experience, so different ownership or management can produce very different premiums for the same vessel.

Ships and cargo are usually insured under valued policies, using an agreed value as the property value for assessing total and partial losses. Actual total loss includes destruction, loss of the insured property's original character, or irretrievable deprivation of it. A loss falling short of actual total loss may be a constructive total loss where restoration is uneconomic under the applicable legal or policy standard, allowing treatment as a total loss. The normal hull deductible applies to partial losses, but not total losses.

Hull insurance also covers general average, salvage charges and sue and labour charges. Maritime salvage usually involves rescuing a vessel or other maritime property from danger on a no cure, no pay basis, with an award payable by the property owners after success. Sue and labour charges are reasonable expenses incurred by the insured to prevent or reduce an insured loss. They are payable in addition to the sum insured, so own damage payments together with these expenses can reach twice the sum insured. Cargo policies also insure these expenses, although their wording normally uses a different description.

The usual commercial hull collision liability cover concerns collision with another vessel and insures three-quarters of the resulting liability. The remaining quarter and certain other shipowners' liabilities can be insured with a Protection and Indemnity Association, or P&I Club, traditionally serving member shipowners where commercial cover is less readily available. This collision liability cover excludes death, personal injury and illness, whether provided by a commercial insurer or a P&I Club; distinguish it from other P&I liability covers.

Pleasure Craft Insurance 遊艇保險

Pleasure craft insurance commonly combines property and liability cover. The usual Institute Yacht Clauses cover specified perils, including perils of the seas, fire, lightning, explosion and earthquake. Third party cover includes liability for personal injury or property damage and legal costs, covering 100% of the insured liability, subject to policy limits and conditions.

Usual exclusions include outboard motors dropping off or falling overboard, personal effects, consumable stores, fishing gear and moorings. A ship's boat without the parent vessel's name permanently marked on it is also excluded.

The standard warranties require a maximum designed speed of no more than 17 knots and use solely for private pleasure, without hire, charter or reward. Assess the speed warranty by maximum designed speed: a speedboat capable of exceeding 17 knots needs different contract terms even if it is actually driven slowly.

A deductible normally applies to partial losses, but not total losses. Own damage is generally settled new for old, although specified items such as sails and outboard motors may have deductions for depreciation and similar factors of up to one-third.

Statutory Requirements for Third Party Risks 第三者風險保險的法定規定

Under the Merchant Shipping (Local Vessels) Ordinance (Cap. 548), subject to statutory exemptions, an owner, charterer or coxswain using a local vessel in Hong Kong waters, or causing or permitting another person to use it, must have effective insurance for liability for death or bodily injury arising from that use. Cover solely for damage to the vessel or third party property does not satisfy this death or bodily injury insurance requirement. [Hong Kong legislation](https://www.elegislation.gov.hk/hk/cap548)

From 1 September 2016, the minimum limit is HK$10 million for any one occurrence where the operating licence permits more than 12 passengers, except for two prescribed vessel categories; it is HK$5 million in other cases. Use the permitted passenger capacity, rather than the actual number aboard on a particular trip. The limit applies per occurrence, rather than per injured person. [Marine Department Notice No. 71 of 2016](https://www.mardep.gov.hk/en/notices/pdf/mdn16071.pdf)

These policies normally include an Avoidance of Certain Terms and Right of Recovery clause. Where compulsory insurance rules require payment, certain policy restrictions cannot defeat a valid third party claim. After paying an amount that the contract would otherwise allow it to refuse, the insurer may recover that amount from the insured where applicable. [Insurance Authority Study Notes, 2022](https://www.peak.edu.hk/exam/doc/SN_P2_chi_2022.pdf)