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What is per bottom limit in marine insurance?

  • Author :
  • TATA AIG Team
  • Published on :
  • 11/04/2024
  • 2 min read

Per Bottom Limit (PBL) plays a crucial role within the framework of an open-cover marine insurance policy, delineating the financial extent of coverage for each individual vessel or shipment.

While the open marine insurance policy outlines the parameters of coverage for cargo and voyages in a broad sense, the PBL specifies the maximum liability of the insurer for any single vessel or shipment. This limit acts as a safeguard, ensuring that in the event of a claim, the insurer's liability is capped at a predetermined amount per vessel or shipment.

Continue reading to find out more about the meaning of per bottom limit in marine insurance.

What is Per Bottom Limit in Marine Insurance?

The Per Bottom Limit in Marine Insurance refers to the maximum liability an insurer will cover for damage or loss to the vessel's hull, machinery, and equipment, including any associated liabilities, such as collision, salvage, or general average.

This limit is specified in the insurance policy and represents the maximum amount the insurer will pay out in the event of a claim. It serves as a crucial aspect of risk management for shipowners and insurers alike, ensuring that both parties understand the extent of coverage and potential financial exposure in case of maritime accidents or incidents.

The limit per bottom in marine insurance helps establish clarity and certainty in marine insurance contracts, allowing for effective risk assessment and protection for all involved stakeholders in the maritime industry.

How Does Per Bottom Limit in Marine Insurance Work?

  • Maximum Liability: The per bottom limit sets the maximum amount that the insurer is liable to pay for losses or damages incurred by the insured vessel. If the cost of repairing damages or replacing the vessel exceeds this limit, the insured may only receive compensation up to the specific limit.

  • Calculation of Premiums: Insurers take into account several factors when determining the premium for marine insurance coverage, including the per bottom limit. Higher per-bottom limits typically result in higher premiums because they increase the insurer's potential liability.

  • Multiple Vessels: Companies with multiple vessels may have different per-bottom limits for each vessel insured under the policy, depending on factors such as the vessel’s value, size, and intended use. Each vessel’s per-bottom limit is tailored to its individual characteristics and risk profile.

What are the Benefits of Per Bottom Limit in Marine Insurance?

  • Risk Management: Setting a per-bottom limit helps insurers manage their risk exposure. By capping the maximum liability for any single vessel, insurers can better predict potential losses and allocate their resources accordingly.

  • Standardisation: Per bottom limits contribute to standardisation within the marine insurance industry. Insurers can offer consistent coverage terms and conditions, making it easier for insured parties to compare policies and understand their coverage.

  • Encourages Risk Mitigation: Vessel owners may be incentivised to implement risk mitigation measures to reduce the likelihood of large claims exceeding the per-bottom limit. This could include investing in safety equipment, maintenance, and training for crew members.

  • Protection for Insurers: Insurers can protect themselves from catastrophic losses by imposing a per bottom limit. Without such a limit, a single large claim could significantly impact the financial stability of the insurer.


The Per Bottom Limit in Marine Insurance plays a crucial role in determining the maximum liability of insurers in the event of a covered loss or damage to a vessel.

This limit serves as a safeguard for both insurers and insured parties, ensuring that risks are adequately assessed and avoided.

As such, businesses and individuals involved in marine activities should carefully evaluate their insurance needs and seek a comprehensive marine insurance policy.

When talking about marine insurance in India, Tata AIG stands as a key player in providing comprehensive marine insurance tailored to meet your needs.

With our expertise and commitment to providing robust transit insurance policies, our contribution significantly protects your goods globally.

Frequently Asked Questions

1. Why is per bottom limit important in marine insurance?

The per bottom limit is important because it defines the maximum amount of coverage available for each individual vessel. It helps in ensuring that the vessel owner is adequately protected against potential losses arising from covered risks.

2. Are there any limitations to the per bottom limit coverage?

Yes, there may be certain limitations or exclusions specified in the insurance policy which could impact the coverage provided by the per bottom limit. It is essential for vessel owners to review their policies carefully to understand any such limitations.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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