Types of Contracts in Marine Insurance

Doing business has an element of risk. The risk multiplies when goods are in transit from one place to another. If you are an exporter, you are exposed to a higher risk until your goods reach their final destination. Thus, choosing the right marine insurance plan is very crucial. So, let us tell you about the different types of contracts in marine insurance.

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What is a Marine Insurance Contract?

Many business owners often misunderstand marine open policy as a complex proposition. However, businesses must be properly insured to avoid financial setbacks in the event of an accident or any unprecedented event.

It is an agreement between the insurer and the insured wherein the insurer agrees to pay, per the agreed terms, the damages or losses that occur during the marine journey. This contract also includes incidents that occurred during any mode of transportation. Goods that are shipped by air or roadways also come under marine insurance. The basic principles of a marine insurance contract are derived from the Marine Insurance Act of 1963.

Marine cargo insurance plans are crucial for various reasons. One of the key reasons for buying a marine insurance policy is that marine accident is widespread and highly expensive too! Recovering the loss from standard marine insurance is not an easy task. 

Getting a customized marine cover plan can make a huge difference and put you in a better financial situation vis-à-vis not having a marine insurance plan.

Learn more about Marine Insurance

Features of Marine Insurance Contract

Just like any other insurance contract, a contract of marine insurance is also based on the following principles

  1. Proposal and Acceptance
  2. Premium Payment
  3. Contract of Indemnity
  4. Insurable Interest
  5. Utmost Good Faith
  6. Subrogation
  7. Contribution
  8. Claims

Types of Contracts in Marine Insurance

It can be broadly categorized into four.

  1. Hull Insurance: Insurance of the vessel, vehicle, and equipment are included under the hull insurance. The word “Hull” refers to the body of the vessel. Ocean-going vessels are majorly classified as sailing vessels, ocean steamers, builders, and so on. This insurance covers the damages and losses against the body frame and the items on the vessels that come under the purview and responsibility of the vessel owner.
  2. Cargo Insurance: This policy refers to the insurance of cargo or goods contents on the ship while in transit. It covers damages and losses of goods that take place during transit by way of road, rail, sea or air. It also covers third-party liabilities.
  3. Freight Insurance: Simply put, freight insurance can help protect against freight loss. For example, the shipping company would lose freight if the loss is incurred during transit. This insurance cover will allow the operator to compensate for damages incurred if they were not under his control.
  4. Liability Insurance: Any liability due to a ship crashing or colliding shall be covered under liability insurance.

 Marine Insurance Contract Advantages

As a business person, if you are engaged in the transfer of goods, marine insurance benefits cannot be ignored. A marine insurance policy can ensure the safety of your goods while they are being transferred. Here are a few advantages of a it are as follows:

  • It provides financial stability to the business in the event of a mishap or unrecoverable loss
  • It provides maximum coverage against a wide range of risks
  • It provides various options and plans as per the need and budget of the customers
  • It helps manage and mitigate risk

Final Words

Marine shipping involves a lot of thought, planning, complex dealings and the incorporation of risk mitigation tools. A marine insurance contract can help mitigate financial risks and losses to the property, including vessel, goods, etc. Since customisation is possible, businesses should carefully decide on picking up the right marine insurance policy that mitigates the risk efficiently.

Written By: PolicyBazaar - Updated: 16 November 2023

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Policybazaar for Business - Marine Insurance - Customer Reviews
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4.3/5
Based on 114 reviews
4.3
out of 5
Based on 114 reviews
14 users
87 users
13 users
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0 users
3.8 April 20, 2023
Anas
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.
Mizoram
4.3 April 03, 2023
Vaishnav
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.
Assam
4.3 March 17, 2023
Umang
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.
Chennai
4.3 February 28, 2023
Vishal
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
Gurugram
4.3 February 11, 2023
Parth
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.
Noida
3.8 February 10, 2023
Rishabh
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.
Jamshedpur
3.8 January 31, 2023
Arvind
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.
Ajmer
3.8 January 21, 2023
Vishal
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.
Mumbai
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.
Pune
3.8 January 01, 2023
Kunal
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.
Indore