The insurance company offers different types of cargo insurance. These insurance products are essential to subscribe for the indemnification of goods contained in the cargo. In addition, the private laws of some countries do not allow to enter the cargo in the absence of a marine insurance policy. The shipping businesses must understand the different types of cargo insurance in order to purchase the most suitable policy.
Let us discuss different types of cargo insurance policies.
The Annual Open Policy in marine insurance ensures continuous and comprehensive cargo protection for multiple shipments throughout the year. It's an efficient and cost-effective choice for businesses engaged in frequent shipping, covering goods across various trips within a one-year timeframe. This differs from Single Transit Insurance, which is limited to a single journey.
Single Transit Insurance in marine coverage safeguards goods or cargo during a specific, individual journey from one location (the origin) to another (the destination) using vehicles like trucks, trains, ships, or planes.
The Marine Sales Turnover Policy provides insurance coverage for a company's anticipated annual sales turnover in marine transportation. It secures the company's financial interests by offering protection against potential losses or damages during its operations.
For Instance, In 2024, if a company aims to export commodities valued at Rs 200 crore and import commodities worth Rs 100 crore, they can select a sales turn over policy. The premium is determined based on the projected Rs 200 crore in sales, offering coverage for both the Rs 200 crore in exports and Rs 100 crore in imports. This comprehensive protection totals Rs 300 crore against potential loss or damage.
Hull insurance exclusively covers losses or damages to carriers such as ships, trucks, trains, or planes during transportation.
Conclusion
Knowing the various cargo insurance policies is vital for shipping businesses. These policies provide protection for goods and are often a legal requirement in certain countries. Whether it's the Annual Open Policy, Single Transit Insurance, Annual Sales Turnover Policy, or Hull Insurance, each serves a unique purpose in safeguarding cargo and financial interests. Being informed about these options empowers businesses to make the right choice in a dynamic industry like marine transportation.
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