Definitions:

• Insurance value: the total cover required
• Insurance premium: the amount to be paid annually to the insurance company, it is always a specific percentage of the value and in most cases paid on four installments annually

The ship owner is in many cases forced to cover his ship with insurance because it is required by a charterer or by port authority, not always is his desire to protect his ship and properties

The value of the insurance depends on the following factors:

• Insurance company policy
• Owner requirements: The value he needs
• Area of navigation: War regions increase the insurance premium and decrease cover value
• Class of the ship: standard and reputation of the class encourage the insurance company to accept higher cover value
• Age of the ship: Old ships pay higher premium and get lower cover value

Documents issued by the insurance company:

• Insurance policy: states all terms of the insurance. Valid for one year
• Insurance certificate (blue card): is issued upon request form owner to submit to a third part, such as flag or charterer, and in all cases should be addressed to the required party, the insurance can issue more than one blue card to state the cover of different items such as Bunker, Wreck removal etc

Required documents for the insurance

• Copy of valid flag certificates
• Copy of valid class and statutory certificates
• Application

Types of ships insurance as follows:

• Hull and machinery insurance: it covers the partial damage of the ship hull or, machinery and also total loss of the ship
• Protection and Indemnity (P&I): this insurance covers the and compensation imposed in the owner due to one of the following or all:
  • Crew compensations due to sickness or injuries during their duty
  • Pollution cases either by cargo or bunker
  • Wreck removal
  • Accidents
• Cargo insurance: sometimes included in P&I and sometimes individual when higher values is required

Always be sure that P&I insurance cover the Bunker and wreck removal as minimum in order to be able to process the BCC and WR certificates by the flag