Carriers performing commercial passenger transport by ship are obliged to take out insurance to cover the carrier's liability for passengers and their luggage. Carriers which do not perform commercial passenger transport by ship do not have a similar obligation to take out insurance.
A carrier that performs commercial passenger transport can, for example, be a ferry operator carrying passengers against payment. It can also be a hotel that offers transport to and from the hotel as part of the hotel service. According to legislation, the carriage of students by schools is also considered to be commercial passenger transport. On the other hand, it is a case of non-commercial passenger transport if, for example, an owner of a yacht is on a voyage with his/her family without payment.
The passenger liability with associated insurance obligation rests with the carrier which is actually performing commercial passenger transport. Therefore, the passenger liability rests with the carrier irrespective of whether the voyage is carried out on board one's own ship or a rented, borrowed or leased ship. On the other hand, the passenger liability with associated insurance obligation does not rest with the one who merely hires out, lends or leases a ship to somebody else without mastering it or making a master available.
The extent of the carrier's obligation depends on whether any damage to passengers and their luggage is caused by marine accidents or other accidents than marine accidents.
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