Guam Industrial Services, Inc. was well prepared. Its coverage included a hull and machinery policy through Zurich Insurance and Starr Indemnity and an ocean marine policy from Zurich that provided limited property damage pollution coverage. When the covered dry dock sank taking barrels containing 113,000 gallons of oil on 1/2/2011, Guam submitted a claim.

All companies denied coverage. Zurich and Starr denied coverage on the hull and machinery policy because a required certification had expired in October. Zurich denied coverage on the ocean marine pollution coverage because the barrels never leaked oil and therefore no pollution occurred.

Guam argued that the certification was not relevant to the loss and that a pollution event had occurred by the barrels entering the water.

Click here to see if coverage was awarded.

The history of ocean marine insurance is also the history of warranties. An ocean marine underwriter is not able to inspect every ship wherever it may be so that underwriter must rely on the truthfulness of the owner. Seaworthiness has always been a major part of the coverage.

Click here to review the PF&M Ocean Marine Insurance Overview that discusses some of the unique characteristics of this primary coverage and who determines seaworthiness.

The personal lines version of ocean marine is watercraft or yacht coverage. Coverage is available from ocean marine specialists but also from standard markets. Clients should be asked about their watercraft exposure because they may be unaware that their homeowner policy will not respond to most motorized watercraft losses.

Click here for two emarketing articles you could use to notify your clients of their coverage needs and of your ability to fill the gap.

The Personal Lines Risk Evaluation Systems Personal Lines Watercraft Questionnaire is available. Whenever a new client is written, the personal lines watercraft questionnaire should be considered, especially if the client lives on or near water.