9 Essential Things to Know about Marine Insurance

Technology is growing evermore, but transport business still remains as risky as it was earlier. However, the risk is manageable through a trustworthy logistic service provider, an apt transport packaging and not to forget - Cargo Marine Insurance.

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While transporting, your goods are explored to many risks. To ensure the safety during transit, you need marine insurance that covers the loss or damages of the consignment.

Things That you Need to Consider About Marine Insurance

The following things you must look before buying the marine insurance policy.

Safeguards the Goods

Marine Insurance comes in handy in covering the loss or damage of cargo, ships, and any other form of transportation or cargo by which the property or good is shipped, obtained or held between the original point of transport and the final destination

It is an Imperative Purchase

Buying marine insurance is essential in case of transportation of goods from one destination to another. The policy covers loss or damages suffered during the shipment of the goods

Offers Protection against Calamities

The natural and man-made calamities such as fire, flood, earthquake, theft etc. are covered by the policy except for certain exclusions

Categories to Look For

Marine insurance comes with a variety of categories to choose from such as cargo insurance, hull insurance, marine liability insurance, freight insurance. Depending on the requirement of if insurance, one can opt for them. While buying insurance policy in India also consider the nature of goods and type of voyage.

Types to Consider

With the aforementioned categories, there are various types of Marine insurance as well like valued insurance, unvalued insurance, annual insurance. Floating insurance, time voyage insurance policy etc. to cater to the different needs of the individual.

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Why Do You Need Marine Insurance?

The reasons for buying marine insurance are manifold:

Goods are Venerable to Theft

While transporting your valuable goods via road, possibilities are there that it catches the attention of well-organised thieves. Unfortunately, this may occur not only in interior areas but also in urban areas, from where your consignment is supposed to pass. Or it may happen while the truck driver is taking a nap at specialised truck parking. Usually, costly goods are the targets but thieves will be happy stealing less pricey items as well such as food products. With marine insurance the loss can be claimed.

Loss or Damage in the Sea

No matter how well you have prepared for your shipment through the sea, the vessels or vehicle remains susceptible to the elements. Though the containership may get bigger and reliable, there are still chances of the loss of container due to sudden severe weather condition.

Costly Items lead to Bigger Loss

Marine insurance is necessary to keep the safety of your costly items intact. The carriers through which the items are being delivered have limited liability. Depending on your preference of insurance provider you may insurer the items up to a certain limit above the invoice value of the insurer. In case of a loss, the insurer will compensate you as per the insurance terms and rate. Caro marine insurance covers not only the invoice value but also may cover duties and taxes (a part of), along with the additional cost incurred in delivery.

Carriers Liability Applied

Marine insurance is the best solution to maintain the safety of your shipment if you are transporting light but costly items. However, as per all transport conventions including the international one, local laws, terms and conditions apply to the contract according to which a limited amount of the carrier’s liability is applied. Based on the actual weight of the items to be delivered, the amount is calculated through a special formula. The formula may differ based on the mode of transport and applicable transport law.

Fast and Smooth Claim Settlement

In simple words, settling marine insurance claim takes less time as compared to a liability claim. This clause is valid when the cause of loss or damage is uncertain or the claim is registered for a significant amount and requires investigation. For instance, if the claimant may be assumed the loss due to an event where the carrier can’t be held liable for, the carrier can oppose it. In such a case, the claim has to be proved by the claimant.

Who can Buy This?

Marine insurance can be purchased by anyone who is into the business of selling, buying or even the financers of the various goods can buy this policy.

Consider the Major Exclusion

If you are export/import business, remember that the loss or damage of goods while transporting, the carrier is not responsible for bearing the loss. Considering this as well, you should buy marine insurance.

Affordable Premium

If we consider the premiums for marine insurance, they are not very high; however, it depends on the type of goods you are insuring, along with the mode of transport.

Meant for Domestic as well as International Trade

Whether you want to expand your business within the country or internationally, your insurer will follow you. With marine insurance, inland transportation of goods via train, road and air is covered. Again, if you want to transport your goods internationally, the policy will cover for the loss or damages occurred during transit. 

To Conclude

Marine Insurance offers multiple solutions for meeting various business goals. If you are into a business that requires frequent deliveries, you must consider this insurance policy.

Written By: PolicyBazaar - Updated: 28 December 2022