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Liability Insurance

Marine insurance covering legal liability to third parties for bodily injury, property damage, or environmental harm.

Liability insurance on a charter vessel covers the insured's legal liability to third parties — other vessels, shoreline property, swimmers, divers — for bodily injury, property damage, and certain environmental incidents (fuel spills, for example).

In marine insurance, passenger liability is commonly carved out separately under a Protection & Indemnity (P&I) endorsement or a Passenger Legal Liability extension. A combined single-limit policy of at least $1,000,000 per occurrence is the baseline for reputable charter operations; larger vessels routinely carry $5-10M or more.

Liability insurance does not cover the vessel itself — that is hull insurance — nor does it cover the vessel's own crew, who are typically covered under USL&H or a Jones Act crew policy.

Examples

  • A charter yacht strikes another boat; liability insurance covers the other vessel's repair and medical costs.
  • A passenger slips on the deck and sues; passenger legal liability covers the claim up to the policy limit.

Related Terms

Charter Insurance—Commercial marine insurance covering a charter vessel, its passengers, crew, and third-party liabilities during paid trips.P&I Insurance—Protection & Indemnity insurance covering third-party liabilities arising from vessel operations.Hull Insurance—Marine insurance covering physical damage to or total loss of the vessel itself.

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