Merchant Marine Act

Definition - What does Merchant Marine Act mean?

The Merchant Marine Act, also known as the Jones Act, is a piece of legislation that put into place a number of rules and regulations for shipping goods by water domestically in the United States. In the context of insurance, the Merchant Marine Act enabled sailors to seek damages from the ship captain, shipping company, or ship owner in the event of a cause of loss. So, it created incentive for shipping companies to purchase more liability insurance.



Insuranceopedia explains Merchant Marine Act

The Merchant Marine Act was passed in 1920, just a few years after the Titanic sunk. The sinking of the Titanic brought the dangers of being a crew member on a ship to light, and helped to cause the act to be created. The Merchant Marine Act essentially gave sailors and crew members aboard vessels much more legal power to hold their employers accountable for losses sustained in the line of work. Thus, it increased liability for shipping companies and thus the need for better liability insurance. The Merchant Marine Act has been amended a number of times since its inception in 1920.

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