What does Hull and Machinery (H&M) insurance cover?

• A. Physical damage to the vessel’s hull and machinery from perils of the sea, collision, fire, grounding, and other incidents; does not cover cargo or third-party liabilities.
• B. Covers cargo insurance in transit.
• C. Covers third-party liabilities.
• D. Covers crew medical costs.

Answer: (A)

Hull and Machinery insurance covers the ship itself—its hull and the machinery on board—against physical damage from risks like the sea, collision, fire, grounding, and similar incidents. It protects the vessel from repair costs and related losses after an insured event. It does not cover the cargo being carried or third-party liabilities. Cargo in transit is protected by cargo insurance, while claims from others due to the vessel’s operations (such as damage to third parties or pollution) are handled by a separate Protection & Indemnity (P&I) policy. For example, if rough seas crack the hull, H&M pays for repairs; if the cargo is lost in the same incident, cargo insurance covers that, and if a third party sues for damage caused by the vessel, P&I would address that.