Marine insurance is not generally required by law, but it is often a requirement of lenders or other parties that have an interest in a vessel or cargo. For example, a lender may require a borrower to have insurance on a boat as collateral for a loan. Similarly, a charter company may require a charterer to have insurance on a vessel as a condition of the charter agreement. In these cases, marine insurance is mandatory in the sense that it is required in order to participate in a particular activity or transaction. However, there is no general legal requirement to have marine insurance. It is up to the individual or business to decide whether or not to purchase marine insurance based on their own risk assessment and financial considerations.
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