Different Types of Marine Insurance Plans
Marine Insurance, as the name goes, offers a means of financial protection against damage or loss caused to ships, boats, yacht, and most important of all, the cargo.Read more
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Types of Marine Insurance Plans
Marine Insurance Plans are of various types. Customers should opt for the one that seems feasible and meets the requirement of the nature and scope of their business. The different plans are:
- Cargo Insurance: As the name suggests, it insures the cargo and covers any loss or damage at the time of loading and unloading or export and import of the goods from the place of origin to the destination. There are two types of cargo insurance:
- Open or Annual Cover is one of the most common types of cargo insurance and it is a perfect fit for those who have a business that requires shipping of goods all-round the year. It covers all the cargo of certain specified value through the year and requires timely renewal after its exhaustion. As these insurance plans are active for only a specified period of time (usually 1 year), they are called Open or Annual Cargo cover.
- Single Cargo Insurance is another common form of cargo insurance that is generally opted by individuals or small businesses for the one-time shipments of cargo. Its coverage begins at the point of departure and ends with the cargo’s arrival at its destination and is often known as ‘warehouse to warehouse’ cover.
- Inland Cargo Insurance is another kind of insurance plan that provides protection to commercial goods while being transported off the shore.
- Hull Insurance mainly refers to the insurance of the torso and hull of a ship along with the associative items like equipment, machinery and furniture in the ship. The shipowner should opt for this kind of insurance in order to cover the loss incurred due to any kind of unfortunate situation. It lowers the financial risk associated with repairs, maintenance of the ship in form of compensation. The risks covered by such an insurance plan are mentioned below.
- Loss of the vessel as a whole.
- Onboard damage to hull, machinery, and expensive equipment.
- Legal charges for the damage and the labours’
- Defence and attack, collision costs.
- Expenses related to drydocking.
- Surveying cost for assessing the damage.
It covers all the physical damages to a vessel, including recoveries and losses in the sea.
- Liability Insurance is a kind of Marine insurance plan that offers compensation for any liability arising out of losses or damages caused due to any unfortunate incidents like crashes, collisions, or attacks.
- Freight Insurance secures the merchant ship against any loss of goods and helps the shipping companies recover from huge monetary setbacks due to any kind of unfortunate events.
- Time insurance plan, as the name suggests, is issued for a definite time period. It is usually valid for a year and is more applicable to the hull than cargo. Generally, it includes a navigating ship.
- Voyage policy covers only a particular ship for a particular trip. The coverage ceases when the journey does.
- Valued policy reimburses a fixed amount in lieu of a loss or damage incurred by the policyholder, unless in case of fraud. The terms & conditions and the sum assured are decided by both the insurer and the insured.
- Floating Insurance is based upon the general terms and conditions. However, the value of each cargo is announced with the dispatch of each consignment. The amount decreases with each consignment until the total sum is exhausted.
- The mixed policy offers the benefit of both time and voyage policy to its customers.
- Port Risk Policy provides protection to the ship at the time it halts at a port.
- Wager Policy is a kind of policy wherein the payment is not stated beforehand but reimbursement is provided when the insurance company comes across any damage which is worthy of a claim. It is neither a written insurance nor does it provides any compensation. It is also invalid in the court of law.
Importance of Marine Insurance Policy
- Provides a financial guarantee against unpredictable natural calamities and other unfortunate incidents like pirate attacks.
- Provides obligatory compensation if any liability arises.
Risk Coverage of the Marine Insurance Plans
Marine Insurance covers a wide range of risk coverage like:
- Loss or damage to vessels like ships, cargo and terminals
- Persistent protection during transportation of the cargo
- Onshore and offshore property like ports, terminals, carriers also falls under the risk coverage.
Marine Insurance is a god-save for transporters and shipping companies as it provides protection against many kinds of financial loss, property damage.