Comparison with non-marine insurance

Loss of hire insurance is in principle the same type of insurance that land-based factories and industry may cover as loss of use insurance. The relevant civil perils (like marine perils) are fire and natural catastrophes. War perils are equally relevant on shore as at sea. However, the mobility of vessels makes war a greater and more complex risk for insurer to evaluate. On the other, hand mobility of vessels makes it possible for insurers to define trading areas and to get vessels moved out of harm’s way when a conflict escalates into a war or war-like situation. Therefore, it is generally easier for owners of vessels to get war risks insurance than it is for the owners of fixed property on land. The non-marine insurers generally exclude war risks altogether, while many marine insurers are prepared to cover war risks at an additional premium in combination with ordinary marine perils. There are also entities specializing in covering war risks for vessels and other floating and movable units.

Loss of hire insurance for vessels and loss of use insurance for shore-based industry have apparently developed completely independently of each other. There also seems to have been very little, if any, communication between professionals within the different branches. It is difficult to say who would benefit the most by such communication apart from, hopefully, the customers.

The Nordic marine insurance market, broadly speaking, has put much greater emphasis on developing the various insurance products in co-operation with the customers (the shipowners) than has the non-marine insurance market.  For example, the Nordic non-marine market has no equivalent to the Nordic Marine Insurance Plan which has been developed through a co-operation between insurance professionals and shipowners in four Nordic countries (Denmark, Finland, Norway and Sweden). This seems also to be true outside the Nordic market.  It is likely that the strong tradition of shipowner-controlled mutual insurance in the Nordic market has contributed significantly to this phenomenon of shipowner participation in the development of marine insurance terms.