Understanding the language of marine insurance is key for anyone involved in shipping, whether you’re a shipowner, broker, underwriter, or cargo owner. The industry has developed its own set of specialised terms over centuries, many of which carry significant legal and financial implications. In this blog, we highlights six essential marine insurance terms that professionals should know.

Cyber Hull Coverage

🔍 Definition
Cyber hull coverage protects ships and their operators against losses arising from cyber incidents, including ransomware attacks, navigation system failures, or data breaches that impact vessel operations.

⚓ Real-world example
A container vessel’s navigation system is compromised by malware, forcing it to divert ports and delaying cargo delivery. Cyber hull coverage helps cover the operational losses and IT recovery costs.

❔ Why it matters
As ships become more connected, cyber risks are increasingly material. Cyber hull coverage ensures operators have financial protection against digital threats that could otherwise disrupt maritime operations.

Delay in Start-Up (DSU) for Marine Projects

🔍 Definition
Delay in Start-Up (DSU) insurance covers financial losses arising from delays in vessel deployment, offshore projects, or cargo delivery, often due to transit interruptions, equipment failures, or port congestion.

⚓ Real-world example
A drilling rig shipment is delayed for two months due to port congestion in Singapore. The operator suffers financial losses from postponed operations. DSU coverage compensates for these losses.

❔ Why it matters
DSU bridges the gap between marine transit insurance and operational/business interruption exposure. It helps marine project owners manage financial risks associated with delays beyond physical damage, increasingly important in global supply chain management.

Institute Cargo Clauses (ICC)

🔍 Definition
The Institute Cargo Clauses are standardized sets of clauses (A, B, and C) defining the scope of cargo insurance coverage. ICC(A) provides the broadest coverage, ICC(B) medium, and ICC(C) the most limited.

⚓ Real-world example
A freight forwarder insures electronics shipped from Singapore to Rotterdam under ICC(B). During transit, minor water damage occurs due to a leak in the container. The claim is partially covered according to the ICC(B) terms.

❔ Why it matters
ICC clauses provide consistency in cargo coverage worldwide, helping brokers, underwriters, and clients understand what perils are insured and how claims are assessed. They are a cornerstone of marine cargo insurance.

Actual Total Loss (ATL)

🔍 Definition
Actual Total Loss occurs when the insured vessel or cargo is completely destroyed or lost at sea, or when recovery is impossible. It represents a total financial loss for the insured.

⚓ Real-world example
A cargo ship sinks during a severe storm in the North Sea, with the entire cargo lost and the vessel unrecoverable. The insurer pays the full sum insured, classifying it as an Actual Total Loss.

❔ Why it matters
Recognizing an ATL ensures clarity for claims settlement and distinguishes it from partial or constructive losses. It allows insurers and insured parties to act promptly in cases where recovery is impossible, helping to reduce disputes.

Utmost Good Faith (Uberrimae Fidei)

🔍 Definition
Utmost Good Faith, or Uberrimae Fidei, is the fundamental principle of marine insurance requiring both parties – the insured and the insurer – to disclose all material facts relevant to the risk. Failure to do so (whether by misrepresentation or omission) can render the contract void or affect claims.

⚓ Real-world example
A shipowner applies for Hull & Machinery cover but fails to disclose that the vessel recently failed a safety inspection. When a claim arises after a grounding, the insurer can deny the claim on the basis of breach of utmost good faith.

❔ Why it matters
Marine insurance relies heavily on accurate information to assess and price risks. Utmost Good Faith ensures transparency, fairness, and trust between shipowners, brokers, and underwriters. In today’s regulatory landscape, it also underpins compliance with international standards and legal frameworks governing insurance contracts.

Jettison

🔍 Definition
Jettison is the voluntary act of throwing cargo or goods overboard from a vessel to safeguard the ship, crew, or remaining cargo in an emergency. Under marine insurance policies, losses from jettison are typically covered if the sacrifice is made for the common safety of the voyage.

⚓ Real-world example
A container ship encounters a severe storm in the Pacific. To stabilise the vessel and prevent capsizing, the crew jettisons several containers. The owners of the jettisoned cargo can claim compensation under their marine insurance policy.

❔ Why it matters
Jettison is one of the oldest principles in maritime law, tied closely to General Average. It reflects the shared risk of sea transport: sometimes, individual cargo is sacrificed for the survival of the voyage as a whole. For shipowners, cargo owners, brokers, and underwriters, understanding how jettison is treated in policies is critical to managing risk and claims expectations.

By familiarising yourself with these six essential terms, you’re taking an important step towards navigating marine insurance with confidence.