Marine Insurance

Companies engaged in marine transport and shipping typically avail of marine insurance. It comprises insurance against the risk of freight loss, any damages to commercial vessels, ships, terminals, and other conveyances used to transport cargo from the point of origin to the point of destination. 

Contracts of indemnification are the basis of all types of maritime insurance policies. 

Features of Marine Insurance 

A marine cargo policy safeguards the insured items from material loss, regardless of shipping. Here are some of the features of purchasing marine insurance in India:

All-Inclusive Protection: 

A marine insurance policy provides complete protection against all marine-related risks the products may be exposed to while in transit.

Simple Customisation Options: 

The plans are easily customisable. Therefore, cargo companies can alter them to fit specific customer requirements.

Flexibility: 

The plans are sufficiently flexible. They offer a wide range of alternatives to meet the insured’s needs while also considering their financial budget.

Assistance with the Claim Survey and the Settlement Process: 

This insurance coverage relieves you of the burden associated with filing a claim. It provides worldwide claims settlement help and a claim survey.

Expansion of Insurance Coverage: 

This policy allows you to add extra benefits and cover risks like strikes, riots, etc.

Types of Marine Insurance

There are four types of marine insurance.

• Freight Insurance
• Liability Insurance
• Hull Insurance
• Marine Cargo Insurance

Freight Insurance

Let us consider an example to understand freight insurance. Suppose the products suffer damage during transportation leading to the operator losing freight receivables. In such cases, the insurance offers compensation for damages to freight receivables.

Liability Insurance

Companies purchase marine liabilities insurance to cover any liability incurred due to a ship colliding or crashing.

Hull Insurance

Hull Insurance protects the vehicle’s hull and torso. It protects against damage and mishaps during shipment.

Marine Cargo Insurance

The term “marine cargo policy” relates to the insurance of items transported from their place of origin to their final destination.

Factors to Consider When Buying Marine Insurance

There are several factors to examine to obtain the most appropriate marine insurance policy.

• Start with the insurer’s reputation and financial stability. Then, you should make sure that the insurance company has a strong marine claims department.

• Second, you should customise the insurance coverage to meet your specific insurance requirements. It is also necessary that the premium be reasonable.

• Third, purchasing marine insurance online is preferable. Some insurance companies provide discounts on their policies if you buy them online.

• Finally, determine your requirements before you invest in a marine insurance policy. The one that suits everyone else may not work for you. Therefore, evaluate your needs and make appropriate purchases.

What Does Marine Cargo Insurance Cover?

The policy protects against risks that happen while the goods are in transit through sea and other means of transportation. The insurer makes the compensation in the following cases:

• Marine insurance protects against fire, explosion, sinking, and stranding disasters.

• The insurer grants compensation in the event of a ship collision, overturning, or derailment of a land conveyance.

• The insured receives compensation for expenses incurred when unloading cargo from a distressed/disturbed port.

• The policy offers coverage for charges associated with general average sacrifices.

• The insurance protects from any natural calamities, such as earthquakes or thunderstorms.

• It also covers jettisoning and being washed overboard.

• It also compensates for complete package loss due to overboard or drops during loading or unloading.

What Does Marine Cargo Insurance Coverage Exclude?

Under the following circumstances, marine insurance is not available:

• There is Intentional loss/damage.

• The quality of the cargo’s packing is inappropriate.

• The insurer does not offer compensation in bankruptcy, liquidation, or financial collapse of the insured.

• The items exhibit transit-related wear and tear.

• There is no coverage if the loss happens due to the delayed shipment.

• Not all insurers cover highly unpredictable events such as war, strikes, riots, and civil disorder.

• There are insolvency-related losses or damages.

The Significance/Meaning of Marine Insurance

Marine insurance is necessary for a large number of import-export processes. Accepting the terms obligates both parties to pay for products covered by insurance. However, marine insurance covers more than contractual duties, and there are various valid reasons to purchase it before shipping the export cargo.

One of three parties must insure goods in transit:

• The Forwarding Agent
• The Exporter of Goods
• The Importer

Conclusion

Marine insurance protects shipping companies and transporters from financial losses due to cargo loss. Additionally, it assists in bringing together carrying firms and receiving parties. 

Marine insurance covers a host of damages that the cargo may face during transit. But it does not compensate for any intentional loss or financial collapse. Policies are often flexible, and you can customise them to suit your needs.