Marine Insurance

Marine insurance covers losses or damages to cargo, ships, terminals, and other transport types. This includes goods transported, held or acquired between the point of origin and destination. The policy refers to the indemnity contract between the insurer and the insured. It also provides coverage for the exposed goods kept onshore or offshore, marine liability or casualty and hull.

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Features of Marine Insurance

Here are some of the benefits of marine insurance in India:

  1. Comprehensive All-Risk Coverage: A marine insurance policy offers comprehensive coverage against all the potential marine-related perils that the goods are exposed to while they are in transit
  2. Easy Customization: Marine insurance plans can be easily customized and adjusted to meet certain needs of the customers.
  3. Flexibility: The plans are flexible enough and have a variety of options to cater to the requirements of the insured, considering their budget.
  4. World-Wide Claim Survey and Settlement Assistance: This insurance policy frees from stress about the claim as the policy offers worldwide claims settlement assistance along with a claim survey.
  5. Extension of Coverage: Under this policy, one has the liberty to enhance the coverage with add-on benefits and cover the risk arising due to strikes, riots, etc.

Importance of Marine Insurance

It is important to purchase this insurance policy in numerous import-export trade transactions. Once the terms are agreed upon, both parties become responsible for reimbursing any losses incurred by the goods insured. 

Nonetheless, the importance of marine insurance extends beyond mere contractual obligations and there exist several compelling reasons for obtaining it prior to shipping export cargo.

Types of Marine Insurance Policy

There are different types of marine insurance policies that are designed to cater to the different needs of the customers. However, it can vary from one insurance provider to another.

Types of Marine Insurance Policies


Any kind of export from anywhere in India to anywhere in the world is covered. This type of policy mostly covers transit modes of Air and Sea.


Any kind of export from anywhere in India to anywhere in the world is covered. This type of policy mostly covers transit modes of Air and Sea.

Inland Marine Insurance

Any kind of transportation of goods mostly by road and rail from anywhere to anywhere in India is covered.

Cargo Insurance

Cargo insurance is a type of insurance policy that covers the loss or damages caused to marine cargo during transit. The protection is offered to the cargo owner along with the cover to the cargo for any loss or damage caused due to delay in the voyage, ship accident or unloading.

Marine insurance also covers third-party liabilities arising from any loss or damage caused to the ship, port, or other transport forms from the insured cargo. This type of insurance is mainly beneficial for tankers and other heavy cargo shipments. Simply put marine insurance policy safeguards the ship.

Hull Insurance

This hull insurance policy provides coverage to the vessel including the furniture and articles of the ship against any unanticipated mishaps. It is imperative for the ship owners to buy this policy and not overlook it.

Freight Insurance

A freight Insurance policy compensates the shipping company in case the freight is lost or damaged.

Let us have a look at various other marine insurance plans available, some of which are:

  • Open Marine Insurance Policy: An open policy is issued for a specific time period and covers all the shipments during that duration.
  • Time Plan: When a plan is bought for a specific period it is called a time policy. This policy is generally valid for a year or so.
  • Voyage Plan: This plan can be bought by those who wish to ensure a specific sea voyage. The moment the journey ends, the plan will be expired.
  • Mixed Plan: When a policy provides the advantage of both a voyage plan and a time plan, then such a plan is referred to as a mixed plan.
  • Port Risk Plan: When the ship is stationed at the port, a port risk plan is useful to ensure that it is protected against the risks involved.
  • Valued Plan: Within this plan, the value is determined either of the cargo or the consignment, which is mentioned in the document of the policy in advance. This helps in case cargo or consignment gets lost determining the insurance value.
  • Floating Plan: Under this plan, the amount of claim is specified beforehand. It is to be noted that the other details cannot be disclosed until the ship starts with the voyage. This plan is best suited who undertake regular cargo transportation trips.
  • Wager Plan: This plan does not have any predefined fixed repayment terms, nevertheless, if the safety net provider finds any shortfall or harm deserving of cases, at that point reimbursement is given. If the harms are not worth considering, at that point there will not be any remuneration.

Plans under Marine Insurance Policy

There are two types of plans under the Marine insurance policy:

Marine Open Policy InsuranceOpen Policy

This plan covers multiple transits for the whole year.

  • There is a fixed sum insured amount in the open policy.
  • The coverage is decided according to per sending limit.
  • The coverage is decided according to per location limit.

Marine Specific Policy InsuranceSpecific Policy

Under this plan, the insurance company provides coverage to the insured for a specific single transit.

Clauses under Marine Insurance

There are two types of Marine insurance clauses. They are as follows:

1.  Inland Transit Clauses (ITC)

  • A All-risk Coverage
  • B Basic risk coverage

ITC stands for Inland transit clauses and it is for inland transits in India only. Whereas ITC-A covers all damages except rainwater damage and ITC-B covers only accidental damages.

2.  International Cargo Clauses (ICC)

  • A All-risk Coverage
  • B Basic risk coverage

ICC stands for International cargo clauses and it is for international cargo only. Whereas ICC-A covers all damages except rainwater damages and ICC-B covers accidental damages only.

What’s Covered and not Covered in Marine Insurance Policy?

Here are the inclusions and exclusions of the Marine Insurance policy:

  • What is Covered?

    • Marine insurance coverage is provided for dire situations like fire or explosion, sinking or stranding during a cargo journey.
    • Compensation is provided for expenses incurred due to collision, overturning or derailment of land conveyance.
    • Compensation is provided for expenses under a circumstance wherein the cargo is discharged from a port of distress/disturbance.
    • Coverage for general average sacrifice salvages charges.
    • Protection against any natural calamities such as an earthquake or lightning.
    • It covers expenses such as survey fees, forwarding expenses, costs of reconditioning, washing overboard and charges of use.
    • It also covers situations like jettison and washing overboard.
    • It also covers the total loss of the package whether overboard or dropped amidst loading or unloading.
  • What is not covered ?

      • Compensation is not provided for any intentional loss/damage.
      • When the packaging quality of the cargo is not appropriate.
      • No cover shall be provided if the damage occurs due to bankruptcy, liquidation or failure/collapse in the finances.
      • When the packaging quality of the cargo is not up to the mark that is why it is excluded from the basic coverage.
      • Wear and Tear of the goods in transit.
      • No cover shall be provided if the loss occurs due to a delay in the cargo.
      • Not all insurers cover extremely unpredictable situations like war, strikes, riots and civil commotion.
      • Any loss or damage resulting due to insolvency.

    Best Marine Insurance Companies in India

    In the below grid, take a look at the different insurance companies providing Marine Insurance plans in India:

    Insurer Claim Settlement Ratio
    Cholamandalam Marine Insurance 89.86%
    IFFCO Tokio Marine Insurance 98.79%
    Liberty Videocon Marine Insurance 72.52%
    Magma HDI Marine Insurance 78.38%
    National Marine Insurance 72.01%
    New India Assurance Marine Insurance 86.17%
    Oriental Marine Insurance 93.08%
    Royal Sundaram Marine Insurance 74.48%
    SBI General Marine Insurance 75.51%
    Tata AIG Marine Insurance 73.40%
    Universal Sompo Marine Insurance 84.03%

    Disclaimer: *Policybazaar does not rate, endorse or recommend any particular insurer or insurance product offered by an insurer.

    What does the Institute Cargo Clause Cover?

    Marine insurance coverage is based on the Institute Cargo Clauses. And the coverage available under these standard clauses includes the following:

    • Constructive total loss

      When the cost of repairing a cargo exceeds its value, the insurer pays the full value for the same

    • Actual total loss

      Actual total loss in marine insurance refers to a complete loss of the insured vessel or cargo

    • Particular average

      Partial loss by an insured peril This refers to a partial loss where the insurer is only liable to pay a portion of the total loss

    • General average

      This refers to a loss that is incurred are shared among all the parties involved to save the voyage from complete destruction

    • Collision liability

      This refers to both vessel owners sharing the responsibility of a collision between ships if the crash was due to negligence

    Marine Insurance Act 1963

    The Marine Insurance Act was established in India in 1963, outlining regulations for marine insurance. Section three of the act stipulates that when the term "marine insurance" is employed, whether explicitly or impliedly, to provide coverage for goods against loss or damage, the insurer is obligated to bear the costs. In the event of a mishap occurring during marine transport, the insurer is responsible for assessing the extent of the goods' loss or damage.

    Principles of Marine Insurance

    There are six principles of marine insurance however the principle of good faith is commonly agreed upon among all the involved parties which makes it mandatory. Apart from good faith, here are the other five principles of marine insurance:

    • 1. Indemnity clause

      The principle of indemnity creates a difference between marine insurance and speculative product for capital markets. Where a put or call contract is used in the capital market for both making profit and hedgings. However, there are different types of marine insurance plans that are specifically designed to provide coverage against losses making the payable claims never exceed the loss incurred by the insured.
    • 2. Insurable interest

      Insurable interest refers to the point where the insurer must have some kind of interest in the safe arrival of the transported goods to the final destination. If goods arrive at the final destination on time and are undamaged then the insured gets the benefits, however, otherwise, the insured has to bear the loss. If the insured’s loss or gain is not borne immediately, they should expect to bear it soon. This is how the insurance protects the insured’s ‘interest’.
    • 3. Proximate cause

      Proximate cause refers to the series of events that led the insured entity to the final total or partial loss. Hence if those series of events that led to the final total or partial loss were mentioned in the insurance policy documents during the purchase then the insurer will provide coverage for that loss accordingly.
    • 4. Subrogation

      Subrogation refers to the scenario where the insurer provides you coverage of Rs 50,000 on a particular cargo. If it gets damaged in an accident and the insurer pays you Rs 40,000 for that loss. However, you sell the damaged product for Rs 30,000 so the total cash you received would be Rs 70,000. Under the subrogation principle, the extra amount that you received which is Rs 20,000 must be returned to the insurer.
    • 5. Contribution

      The principle of contribution refers to the scenario where a particular cargo is insured by two insurers. In this scenario under the contribution principle, the claim amount is supposed to be split between both insurers.

    How does Marine Insurance Work?

    Marine insurance is a valuable way for parties involved in the transportation of goods to transfer liability to an insurance company. Intermediaries handling the goods have limited legal liability, so exporters often choose to buy insurance policies that provide coverage against potential loss or damage, instead of taking sole responsibility for the goods.

    Although carriers such as airlines or shipping companies may be responsible for damages or losses incurred during transport, the compensation offered is typically calculated on a 'per package' or 'per consignment' basis, which may not cover the full cost of the goods. Consequently, many exporters choose to take out marine insurance before shipping their products to mitigate potential risks.

    Marine insurance is important to fulfill contractual obligations for exports and to align the Carriage and Insurance Paid (CIP) and Cost Insurance and Freight (CIF). In order to protect the bank’s and buyer’s interests and comply with these obligations, exporters need to purchase marine insurance. Even if goods are delivered under terms such as Delivered Duty Unpaid (DDU) or Delivered Duty Paid (DDP), it's generally a good idea to insure the goods.

    To avoid the need to make insurance claims, it's important to take steps to minimize the risk of damage or loss during transport. Proper packing that accounts for loading and unloading, natural hazards, clumsy handling, and theft is essential. By taking these precautions and purchasing marine insurance, exporters can protect their goods and ensure they meet their contractual obligations.

    How to Calculate Marine Insurance Premium?

    To calculate the premium of your desired marine insurance policy. Here is the formula that you can use:

    • Shipment Value & Cost of Freight + 10% of Total Cost * The quoted premium amount

    You will get the premium amount that you will have to pay.

    Claim Process for Marine Insurance Policy

    Here is the process you need to follow to raise a claim under marine insurance:

    • Inform insurer

      The insured has to inform the insurer about the loss or damage. If the policyholder is unable to inform the insurer then somebody else can do it on his behalf.

    • File FIR in case of missing package

      In case of a missing package, the policyholder must file a police report and get proper acknowledgment because the insurer can ask for a police report the claim is related to theft.

    • Ask for surveyors visit for damaged package during transit

      If at the time of taking the delivery of goods, any package is externally damaged then the policyholder must ask for a detailed survey by the surveyors and also lodge a monetary claim with the shipping company.

    • Claim settled

    Documents Required to Raise Claim under Marine Insurance

    Once the claim is successfully filed the insurer will provide the URN/claim number, which can be used for uploading documents and checking the insurance claim status.

    Below is the list of documents that are required for the claim process:

    *Enter URN/Claim number provided by insurer to check claim status.

    Frequently Asked Question

    • Q. How can I make a claim, in case of a cargo emergency?

      Ans: The claim process of Marine Insurance is simple. Below are the steps to make a claim: 1. Inform the insurer immediately by approaching the claim representative or visiting the nearest branch 2. In case of damages caused to the goods that are on the ship, a port or joint ship must be arranged by you 3. Submit the policy document and other relevant documents, which may be required to testimony your claim
    • Q. What are INCO Terms in Marine Insurance?

      Ans: Incoterms are used in international trade to determine the point at which responsibility for delivering goods changes between buyers and sellers. Incoterm inform sales contracts defining respective obligations, costs (including insurance), risks involved with delivery from one party as well an agreement on how long it will take before those items can be delivered.

      Here are some of the commonly used INCO terms:

      Ex Works (EXW): Once the seller place the goods at the buyer’s disposal, insurance and carriage are arranged by buyer.

      Cost, Insurance, Freight (CIF): Seller delivers once the goods have been passed through the ship’s rail in the shipment port. It is mandatory for the seller to pay the cost and freight to bring goods to the destination however the risk is transferred to the buyer from seller.

      Free On Board: Seller delivers once the goods have been passed through the ship’s rail at the named port of shipment. It means that the buyer will have to bear the costs and risk from that point onward.

      Here are some of the other INCO terms that are used in the market:

      CIP: Carriage and Insurance Paid

      DAP: Delivered At Place

      DDP: Delivered Duty Paid

      CPT: Carriage Paid To

      DAT: Delivered At Terminal

      FCA: Free Carrier

      EXW: Ex Works

      Rules for Inland Waterway & Sea Transport Only

      CIF: Cost, Insurance and Freight

      CFR: Cost & Freight

      FOB: Free On Board

      FAS: Free Alongside Ship

      Note: These are the new INCO terms 2020. These have been published recently.

    • Q. What are the factors to be considered while buying marine insurance plan?

      Ans: There are factors to be considered in order to ensure the right marine insurance policy.
      • Firstly, the reputation of the insurer and its financial background. Following this one must ensure that the insurer has a robust marine claim department.
      • Secondly, the coverage should aptly be designed as per your insurance needs. Moreover, the premium should be affordable.
      • Third, prefer buying marine insurance online. Some insurers offer discounts on their plans when you buy online.
      • Fourth, analyse your needs first, then buy. The one suits the others may not be proved as useful to you. So, review your needs and buy accordingly.
    • Q. I want to buy a one-year policy that covers all my shipment. Where to buy it from?

      Ans: There are insurance providers in India who offers marine insurance. You can approach one of them. The best part is, you need not have to visit them physically, you can go to their websites, compare the plans and buy according to your requirements.
    • Q. How is the premium of marine insurance decided?

      Ans: The premium is decided based on the following factors: 1. Type of ship 2. Age of the ship 3. Valuation or cost of the ship 4. Trading and tonnage limits of the ship 5. Management and ownership terms of the ship 6. Type of insurance cover required
    • Q. Who can buy Marine Insurance?

      Ans: Those who own a ship & cargo with an insurable interest in the boat or ship can buy marine insurance.
    • Q. Who is deemed to have an insurable interest under a marine insurance policy?

      Ans: 1. The owner of the ship 2. The owner of the cargo 3. The master and crew of the ship 4. The creator who has advanced money on the security of the boat or ship 5. The mortgagor if the insurable subject is mortgaged 6. A trustee with a property in trust 7. The person advancing the freight
    • Q. What are the types of sales contract under Marine insurance in India?

      Ans: The types of contract under marine insurance are: 1. FOB Contract- Free on Board 2. FOR Contract- free on Rail 3. C&F Contract- Cost &Freight 4. CIF Contract- Cost, Insurance & Freight
    • Q. What is the Marine Insurance meaning ?

      Ans: Marine insurance policy is not restricted to the transportation of goods that are done through the seaway only but it also provides cover to the transportation of goods through roads, air and railways.
    • Q. What are the types of sales contract under Marine insurance in India?

      Ans: The Marine Insurance Act was passed in 1963 to protect insurers and their clients against losses caused by marine ventures. The law states that when a person says they have insurance, it means there's a chance for them not having any problems if something goes wrong with what you're insuring against - like your ship getting lost at sea.
    • Q. How can I get Marine Insurance quote?

      Ans: You can visit the Policybazaar website and get marine insurance quote online.
    • Q. Can I purchase a marine insurance policy online?

      Ans: Yes, you can purchase marine insurance policy online. You can visit to learn about the policy coverage in detail and purchase the one that suits your requirements.
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    4.5 October 08, 2022
    The website is really informative and resourceful. They have every type of information related to insurance which helped me in buying a really economical plan for my ship.
    4.5 October 07, 2022
    Affordable Premium
    I bought marine insurance online and the process of buying it was so smooth and also did not require any paperwork. I have bought it for longer periods and the premiums are affordable.
    4.5 October 06, 2022
    Knowledgeable Team
    I bought marine insurance as products can easily get damaged on the voyage. I had a query and the Policybazaar cleared my doubt very quickly. Their representative was also well-spoken and friendly.
    4.3 October 05, 2022
    Quick Renewal
    I could quickly renew my marine insurance policy from Policybazaar and got a very great deal. Bought a quite expensive cover last time and this time got a very economic deal with Policybazaar. Very Happy!
    4.5 October 04, 2022
    Full Coverage
    I have a transportation company where we transport goods via ship. Wanted an insurance cover that offered me full coverage and timely claim settlement. Landed on Policybazaar and was surprised to see so many affordable plans. The purchase process was also very smooth.
    4.5 October 03, 2022
    User Friendly Website
    The Policybazaar website is user friendly as it gives you all the info you need without much efforts. Moreover, you can get right premium estimations within a matter of second. Really amazing interface.
    4.5 October 02, 2022
    Pleased With Them
    Very much pleased with their customer support as they answer all your queries diligently. Had some questions before buying a marine insurance policy and the team answered them all.
    4.5 October 01, 2022
    Low Cost Plans
    Got a very affordable and low cost plan from Policybazaar. Love how easy was their purchase process and how conveniently I could compare plans before buying
    4.5 September 30, 2022
    No Agent
    I purchased a marine insurance cover for my cargo from Policybazaar without the involvement of any agent. Got the plan in budget and there was no headache of an agent in between. Easy and quick!
    4.5 September 29, 2022
    Great Plans
    Wanted a marine insurance plan for my cargo transportation business. Visited Policybazaar and found some really great plans along with their distinct features. The add ons offered were also very useful.
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