How Cargo Handling Affects Marine Insurance Premium?

A marine insurance policy covers not just sea journeys but also air, road and rail transportations. The policy covers the loss or damage of goods and vessels in transit between the point of origin and the final destination. Irrespective of the type of policy, the marine insurance premium amount is calculated based on various factors, including the risk estimates provided by the insured.

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Marine Insurance Premium

Insurance policies are designed to mitigate risk in case of an unprecedented loss. In marine insurance, the risk is high as there are multiple factors (man-made and natural) that can cause financial loss to the owner.

Risks in marine open policy may include damage to the expensive vessel, loss or damage to the cargo or goods, environmental damage risk, and liability risk. A premium on a marine cargo insurance policy may increase or decrease based on a few parameters that help them estimate the risks.

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Factors Affecting Marine Insurance Premium

As a trader or shipper, one has to expect frequent changes in the premium amount. The reality is that the premium amount is highly subjective. The risks involved also vary on the change in location, material, vessel and many other factors.

The below key factors are considered for calculating marine insurance premiums:

  1. Natural risks: Natural disasters like earthquakes, floods, tsunamis, cyclones, etc., can cause massive damage to the goods in transit. However, predicting these perils is not always possible, thus, causing large financial losses. Some parts of the globe are highly prone to such disasters. Transit to such destinations can lead to a high marine insurance premium.
  2. Ports Facilities: The facilities at the ports also play a significant role. The port at which the cargo is loaded and the one at the destination impacts the premium amount. This is because some ports in developing countries may not provide world-class facilities compared to those in a developed nation.
  3. Type of vessel: The vessel's quality, fitness and construction play an important role in defining the marine insurance premium. The risk is higher if your goods are placed in an older vessel. Details of the vessel, in terms of the materials used for its construction, its strength and adaptability, age of the vessel, etc., are to be provided to the insurer to get the insurance quote.
  4. Value and Nature of the Goods: Multiple goods or cargos are shipped out like consumer goods, raw materials, industrial materials and so on. The nature and value of the goods to be transported play a vital role in determining the premium amount.

For example, high-value goods usually have a higher premium. Similarly, goods that include food items or glass (which have a higher chance of getting damaged) also have a high premium. This is because recovering such goods from damage is next to impossible.

Also, cement is one such commodity for which the premium charged is very high. The reason for this is that cement leads to total loss if it gets in contact with water.

  1. Terms and Conditions of the Policy: The inclusions and exclusions in the policy are other factors that impact its premium. For instance, policies that cover total losses may have a higher premium than those that cover partial losses.
  2. Loss History: Insurance companies usually include questions regarding previous losses to determine the riskiness of the business. If several claims are filed during the last few years, it can help the insurer calculate the premium amount. Also, the shipper is sometimes expected to show what efforts or steps are taken to ensure that those similar claims would not occur again.
  3. Risk Management Strategy: In continuation to the above point, the shipper may offer a lower premium if some specific risk management techniques have been adapted or modified. For example, proper packaging, special programs for the prevention of theft, disaster management programs, etc.


For marine insurance premiums, it is never a one-size-fits-all approach. Many other factors determine marine insurance premium amount. The insurance providers use customized calculations to determine premium rates based on the abovementioned risks. Right from guiding how to select the right marine insurance policy to how to pick a hassle-free and quick policy, speedy claims, and everything in between, Policybazaar's expert and dedicated team is at your service round-the-clock.

Written By: PolicyBazaar - Updated: 10 August 2023

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  • New machinery machine tools & spares in closed ISO containers
  • Solar panel
  • Machinery machine tools & spares duly packed/lashed
  • Electronic & white goods
  • New machinery machine tools & spares in closed ISO containers
  • Solar panel
  • Machinery machine tools & spares duly packed/lashed
  • Electronic & white goods
  • New machinery machine tools & spares in closed ISO containers
  • Solar panel
  • Machinery machine tools & spares duly packed/lashed
  • Electronic & white goods

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Policybazaar for Business - Marine Insurance - Customer Reviews
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Based on 114 reviews
out of 5
Based on 114 reviews
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3.8 April 20, 2023
Great Experience
I recently purchased Marine insurance from Policybazaar for my shipping business and I must say I am thoroughly impressed with their service and coverage. From start to finish, the experience has been smooth and hassle-free.Thankyou.
4.3 April 03, 2023
Provides Comprehensive Protection
When it comes to coverage, Marine insurance that i bought from PolicyBazaar has exceeded my expectations. It provides comprehensive protection for my cargo and vessels during transit, ensuring I can focus on my business operations with peace of mind. Thankyou.
4.3 March 17, 2023
Excellent Services
I highly recommend Marine insurance from PolicyBazaar website to anyone in the shipping or logistics industry. Their user-friendly website, comprehensive coverage, and excellent customer service make them stand out from the competition. With Policybazaar, I feel confident in navigating the high seas, knowing that my business is well-protected. Thank you, Policybazaar.
4.3 February 28, 2023
User Friendly Interface
The website's user-friendly interface made it easy to compare different plans and find the perfect fit for my business needs.Thanks
4.3 February 11, 2023
Prompt Services
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
3.8 February 10, 2023
Exceeds Expectations
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
3.8 January 31, 2023
Easy Navigation
The ease of navigating the Policy bazaar website and finding the right marine insurance policy was impressive. The website's user-friendly interface and intuitive design made it incredibly simple to compare various options, understand the coverage details and make an informed decision. I appreciated the transparency provided throughout the process. Thanks.
3.8 January 21, 2023
Excellent Support
The customer service provided by Policy bazaar was decent. Their team was responsive, knowledgeable and went above and beyond to assist me at every step. Their professionalism and commitment to customer satisfaction were truly commendable.Thankyou.
4.3 January 11, 2023
Sanjeev Rathor
Efficient Process
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
3.8 January 01, 2023
Comprehensive Coverage
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.