Working within the cruise ship industry offers lucrative opportunities for vendors and suppliers (“third parties”), but it also comes with inherent maritime risks. Cruise ships are floating cities that require a diverse range of goods and services to maximize the guest experience. Operations such as food & beverage provisioning, onboard entertainment, video production, event planning, service providers (installers/engineers/IT systems, etc.) and coordinating port excursions all have some maritime exposure.
Whether your operations take place in the shipyard, on the docks, in port or onboard, every cruise ship company has “Third Party Privacy, Security & Risk Management” protocols that require vendors to be assessed, evaluated, and vetted based on their risk/exposure/experience profile. Once vetted, cruise line contractual agreements specify the type of insurance required to meet the contractual obligations to proceed and conduct business. In fact, if you read the fine print of your contract’s Terms and Conditions, it likely states that the cruise line is not responsible for any actions, both first party or third-party actions, that results in injury, illness, accidental death, data breach/cyber fraud or loss of products and/or cargo. To fill this gap, your business needs to evaluate operational coverage both on and off the vessel or in the shipyard. Furthermore, any company that has employees working onboard vessels should be knowledgeable in Maritime Labor Convention 2006 regulations (MLC).
Rahn & Associates, an independent insurance broker that specializes in providing customized marine insurance policies, outlines the various coverage below that protect third parties from a business-ending event. Policies are available for short-term or annual contract length, and for any and all employees, as well as independent contractors.
Maritime Commercial General Liability Insurance (MCGL): This fundamental coverage is a requirement for any vendor or supplier working with cruise ships. It provides coverage for bodily injury, property damage, and personal injury claims arising from your business operations onboard a cruise ship, on the docks or in the shipyard by the cruise line or other third parties. Additional coverages included in MCGL:
Product Liability Insurance: For companies involved in manufacturing, distributing, or selling products to the cruise ship industry, product liability insurance is indispensable. It shields against claims related to product defects, design flaws, or failure to provide adequate warnings.
Personal Advertising Injury: Covers injuries that occurs because of advertising activities, such as defamation, slander, or infringement of intellectual property rights (e.g., copyright or trademark infringement) in advertisements. It typically covers claims arising from false or misleading advertising, libel, slander, or violation of privacy rights in advertising materials. It also may cover breach of contract claims.
Maritime Employer’s Liability (MEL): Maritime employees (seafarers) are prone to many exposures. MEL covers employees or independent contractors who are contractually hired to work on someone else’s vessels. MEL is a specialized insurance solution designed to safeguard the well-being of seafarers and crew members working on vessels in compliance with MLC 2006. Signers of the Maritime Labor Convention 2006 require all seafarers to be provided certain rights as if they worked on land. Size does not matter in this situation. Big or small, yacht, barge, oil rig, or cruise ship, employees will always have coverage 24/7 when in transit to/from and signed on as a seafarer even though the insured is not the owner or operator of that vessel. MEL is an admiralty law that insures loss of life, injury and illness to employees, repatriation, loss wages when classified as seafarers while in service on a vessel.
Independent Contractors/Concessionaire Insurance: coverage includes both MCGL/MEL coverage. MEL covers medical, personal accident, death, and repatriation to your home country and sick wages. The MCGL covers worldwide general liability for first- and third-party actions brought against the company. This policy provides for worldwide maritime claims administrator and covers medical expenses no matter where in the world the accident or illness occurred. Policies can either be on an annual or short-term basis or can be customized for multiple trips and multiple ships. Rahn & Associates offers an International Cruise Insurance Program designed for individuals and groups performing single or multiple short-term contracts on board cruise ships. Click here to learn more.
United States Worker’s Compensation with United States Long Shoreman’s and Harbor Workers: (USL&H): USA Worker’s Compensation with USL&H is a federal requirement mandated by the U.S. Department of Labor for businesses working adjacent to or near the navigable waters of the United States, per the Longshore and Harbor Workers’ Compensation Act of 1927. Businesses may be required to carry this additional insurance coverage to work in shipyards, ports, docks, barges, bridges or while navigating a vessel within state and federal waters.
Protection and Indemnity Deductible Buy-Down Insurance (P&I) - P&I Insurance provides seafarer’s a no-faults healthcare benefits for medical claims and administrated by a third-party maritime claim’s specialist. The policy manages, administrates, negotiates, and settles crew claims on your behalf. Policy underwrites the burn layer -providing policy limits from $75,000 to $750,000 per insured. First dollar deductibles range from $250 to $5,000 per claim/per occurrence. Self-insured aggregates options are available. Deductible Buy-Down Insurance is a key way to get the premium cost down by settling crew claims on your behalf. It also provides coverages for seafarer’s families while they are away from home with benefits in their home country.
Professional Liability Insurance: Also known as errors and omissions insurance, this policy safeguards service-oriented businesses, such as event planners, doctors and nurses, port lecturers, tour coordinators, or logistical services, against claims of negligence, errors, or omissions in the services they render.
Marine Cargo Insurance: Marine cargo insurance is particularly important for suppliers involved in transporting goods to and from cruise ships and while inventory is aboard the vessel. This coverage ensures that merchandise and supplies are protected against damage or loss during transit from your facilities, to the warehouse, and while on board and stored on the vessel.
Conclusion
Vendors, suppliers, and logistics companies form the backbone of the cruise ship industry. Having the right maritime insurance coverage based on the products or services you provide is critical to not only protecting your business but also required by cruise lines to secure a third-party contract. By investing in the right maritime insurance coverages, you can also build your reputation and trust within the industry, which can lead to increased opportunities and long-term partnerships with cruise lines.
Rahn & Associates has over 30 years of insurance experience and deep knowledge of the cruise/marine industry. Please contact us for a free consultation so we may discuss your needs and develop a customized, cost-effective policy that will protect you while you are under a cruise line/ship’s contract.
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