Understanding Premium Calculation in Transit Insurance

Transit insurance is an essential component of the logistics and supply chain industry, providing protection to businesses against potential losses during the transportation of goods. One crucial aspect of transit insurance is premium calculation, a process that determines the cost of coverage. In this article, we will delve into the intricacies of premium calculations in transit insurance, shedding light on the factors and formula that underpin the process.

Read more
marine

Get right expert advice

Hassle free policy

Speedy Claims

Fast-track your search with instant quotes from top insurers

Get ₹10 lakh cover
starting at ₹591/transit+

Step 1/2
Instant policy copy
All commodities available
Single transit and annual covers

Get ₹10 lakh cover starting at ₹591/transit+

Instant policy copy
All commodities available
Single transit and annual covers
secure-icon We don't spam
Get Updates on WhatsApp
Check Your Premium Now

Get ₹10 lakh cover
starting at ₹591/transit+

Step 2/2
Fast-track your search with instant quotes from top insurers
Expert advice

Buy right

Instant policy

Quick & Hassle free

Dedicated team

Speedy Claims

The Basics of Transit Insurance Premiums

Transit insurance, also known as marine insurance, is designed to safeguard the interests of businesses that transport goods by land, sea, rail or air. It offers coverage against various risks, including damage and loss during transit. The cost of this insurance is determined through a process known as premium calculation, where insurers evaluate the risk associated with the cargo and set a price accordingly.

Formula for Premium Calculation

The formula commonly used to calculate premiums for transit insurance is as follows:

Premium = Rate (Commodity/Goods) * Sum insured / 100 + (GST)

Let's break down this formula to understand the components:

  • Rate (Commodity/Goods): This is the rate applied to the specific type of commodity or goods being transported. Rates vary based on the nature of the cargo. For instance, hazardous materials or high-value goods typically have higher rates due to their increased risk.
  • Sum Insured: The sum insured is the declared value of the goods being transported. It represents the maximum amount the insurance policy will pay out in the event of a covered loss. It is crucial for businesses to accurately assess the value of their cargo to ensure they are adequately covered.
  • GST (Goods and Services Tax): Depending on the jurisdiction, a Goods and Services Tax or Value Added Tax (VAT) may be applicable to the insurance premium. This is added to the premium calculation and varies by region and local tax laws.
Learn more about Marine Insurance

Conclusion

Transit insurance is essential for protecting businesses during the transportation of goods. The premium calculation formula, considering factors like cargo type, sum insured, and tax, ensures fair and accurate coverage costs. This knowledge empowers businesses to secure their cargo effectively and navigate the logistics industry with confidence.

Written By: PolicyBazaar - Updated: 17 November 2023

Marine Insurance Premium Calculator

Select Commodity

  • 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

Select Mode of Transport

  • Road
  • Air
  • Sea
  • Courier
  • Rail

Cover Amount Required

Enter value between 10 thousand to 10 crore

Calculate

Premium starts from

Great! Now Unlock Best Plans for You

No online plans found!

But, we have offline plans ready.
Connect with our advisor to explore more

Schedule a callback
Re-calculate

Now help your friend get Business Insurance

Your referral is greatly appreciated!

Our team will reach out to your friend soon to help with their business insurance requirements.

Marine Insurance Articles
Transit of goods through waterways involves high risks. Marine insurance plays a significant role in safeguarding...Read more
23 Nov 2022 by Policybazaar 7181 Views
When moving to a new home, safeguarding your household articles during transit is crucial. Transit insurance...Read more
27 Oct 2020 by Policybazaar 9348 Views
Warranties in marine insurance are referred to as assurances or promises by the policyholder about a certain act...Read more
20 Jul 2023 by Policybazaar 3196 Views
Traders who export or import their goods across distant lands are aware of the risks during transit. While there...Read more
23 Feb 2022 by Policybazaar 8082 Views
In addition to the basic carrier policy, a Freight insurance policy will provide additional protection for your...Read more
18 Mar 2019 by Policybazaar 21165 Views
Within the transportation industry, where goods traverse vast...Read more
29 Apr 2024 by Policybazaar 65 Views
The accumulation clause in marine insurance is a crucial...Read more
05 Apr 2024 by Policybazaar 133 Views
Transporting goods across the vast expanse of oceans comes with...Read more
05 Apr 2024 by Policybazaar 228 Views
Shipping insurance for high-value items is crucial to mitigate...Read more
03 Apr 2024 by Policybazaar 118 Views
Intermediate storage in marine insurance plays a crucial role in...Read more
03 Apr 2024 by Policybazaar 142 Views
Policybazaar for Business - Marine Insurance - Customer Reviews
View all
4.3/5
Based on 114 reviews
4.3
out of 5
Based on 114 reviews
14 users
87 users
13 users
0 users
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