Hull & Machinery Insurance (H&M)
Hull & Machinery (H&M) insurance covers physical loss of or damage to the ship itself — its hull, engines, machinery and equipment — arising from perils such as grounding, collision, fire, heavy weather, sinking and machinery breakdown. It is the shipowner's cover for the vessel as an asset, the marine equivalent of insuring the physical property.
H&M is typically written on standard clauses (such as the Institute Time Clauses — Hulls), for an agreed insured value, with a deductible, and it also usually contributes to general average and salvage and to a share of collision liability (the “running-down clause”). It works alongside Protection & Indemnity (P&I), which covers the third-party liabilities that H&M does not, and the two together (plus cargo insurance) form the core of a ship's insurance programme. For lenders and owners, adequate H&M cover on the hull's value is essential to protect the capital tied up in the vessel.
A ship is a floating multi-million-dollar asset exposed to grounding, collision and fire — H&M is what protects that capital. Paired with P&I for liabilities and cargo cover for the goods, it completes the core of marine insurance. For owners and their lenders, adequate hull cover is non-negotiable, which is why understanding H&M matters to anyone financing or running ships.
What does hull & machinery insurance cover?
Physical loss of or damage to the ship itself — hull, engines, machinery and equipment — from perils like grounding, collision, fire and heavy weather.
How does H&M relate to P&I?
H&M covers the ship as property; P&I covers third-party liabilities. Together with cargo insurance they form a ship's core insurance programme.