For those in the shipping industry, bunker insurance is a protection from loss associated with groundings, collisions, and total loss. Many times a hull and machinery coverage package will exclude the coverage of the bunker, which can contain fuel materials extremely valuable to the owner of the ship. Ships are required to possess a bunker convention certificate before traveling international waters.
Cases of Coverage
At any point in the time on board, the bunker is susceptible to damage, it may get lost, or it may need t to be recovered during a salvage operation. In terms of general coverage terms, bunker insurance will cover losses incurred by:
In situations involving general average or salvage, the value cost of the bunker is what might contribute to the payout or financial assistance received. This is called the salvage award. The policy covers the value of bunker or quantity of bunkers held on the ship at any time. However, the award is issued according to the value of bunker at the current moment of the loss. The bunker convention certificate provides information for all parties to verify the coverage and policy limits.
International incidents involving oil spills and other oceanic or harbor damage has placed significant pressure on mariners to carry proper insurance coverage for their vessel and cargo. With bunker insurance, vessels have a liability resource in the event damage or loss occurs with their bunker.