Hull & Machinery (H&M) insurance covers the vessel for physical damage which may occur due to a variety of perils such as fire, explosion, lightning, grounding, stranding, capsizing, sinking, collision with other vessels or fixed or floating objects, and the vessel’s proportion of salvage charges. With this cover it is important to understand whether the insurance covers damage to the hull and machinery only due to casualties such as previously mentioned or whether the insurance also covers machinery damage occurring due to causes such as breakage of shafts, negligence of the Master or Crew, latent defects, and/or negligence of repairers. Traditionally H&M was written to include ¾ of the insured’s collision liability (with insurance of the remaining ¼ to be for the insured to self insure or arrange elsewhere, but the modern practice is for H&M insurers to exclude any cover for collision liability and for the vessel owner to arrange coverage of 100% of his collision liabilities with his Protection and Indemnity (P&I) insurer. For smaller commercial vessels and yachts H&M and P&I are most often written together as a package by the same marine insurer.