Machinery breakdown in Marine Hull Insurance

Our expert Marine team at Geo are back to provide more guidance to brokers and your clients as part of our ongoing series. This time, we asked the team to provide some top tips on machinery breakdown.

Let’s get clear from the start: when we talk about “machinery” in marine hull insurance, we’re not referring to cranes, winches, or deck gear. We’re talking about propulsion machinery: engines, gearboxes, shafts, propellers, and the systems that keep the vessel moving. Now, machinery breakdown coverage doesn’t mean “we’ll fix anything that breaks.” But two key perils do often trigger valid claims: latent defect and crew negligence.

Latent defect

A latent defect is a hidden flaw in a component that wasn’t detectable through standard checks, like a microscopic crack in a shaft or a casting flaw in a piston.

What’s covered

• The damage resulting from the defect. For example, if a fractured gear fails and wrecks the engine casing, that resulting damage is covered.

What’s not

•  The defective part itself is usually excluded. So if the cracked gear is the culprit, the policy pays for the fallout, not the gear.

Rule of thumb: The chain reaction is covered, but the spark that started it isn’t.

Crew negligence

Marine policies typically do cover accidental damage caused by crew errors.

What’s covered

• Operational mistakes, skipped procedures, or maintenance blunders - like overheating an engine due to a missed valve opening.

What’s not

• Deliberate acts, gross negligence, or known issues ignored by the owner.