What do Perils of the Sea Mean in Marine Insurance?

Transporting goods across the vast expanse of oceans comes with inherent risks. Perils of the sea, a term used in marine insurance, refers to the unforeseen dangers that can threaten vessels and cargo during a voyage. Understanding what perils of the sea mean in marine insurance is crucial for anyone involved in the shipping industry, as proper insurance safeguards against these potential losses.

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Common Perils of the Sea Covered by Marine Insurance

Marine insurance provides financial protection for ship owners, cargo owners, and other stakeholders in the maritime industry. It acts as a safety net in case of unforeseen events that can damage or destroy cargo, injure crew members, or even cause the total loss of a vessel.

But what exactly do perils of the sea entail in marine insurance? Let's delve deeper into the various perils covered and how they impact insured parties.

  • Natural calamities like ferocious storms, earthquakes and hurricanes can cause significant damage to ships and cargo. Marine insurance covers these natural occurrences, providing compensation for repairs or replacement costs.
  • Accidents at sea, including collisions with other vessels or underwater obstacles, can result in severe damage or sinking. Marine insurance provides coverage for repairs or total loss due to collisions.
  • Unfortunately, the threat of piracy still exists on certain waterways. Marine insurance can offer protection against theft or damage caused by pirates.
  • In situations where a ship collides with a structure or a large marine animal, marine insurance provides compensation for repairs to the ship and any cargo damage resulting from the collision.
  • Marine insurance may cover the value of jettisoned cargo. This refers to the intentional sacrifice of cargo at sea to save the ship in a perilous situation.

The scope of coverage for each peril of the sea depends on the specific wording of the insurance policy. It's important to carefully review the policy details to understand what events are covered and the limitations of the insurance.

Protecting Cargo under Marine Insurance

Marine insurance isn't just for ships; it also protects the cargo they carry. Cargo insurance, a type of marine insurance, safeguards the financial interests of cargo owners in case of damage or loss during transport. There's a vast diversity of cargo transported by sea, and marine insurance caters to this variety. Here's a glimpse into the different types of cargo covered under marine insurance:

  • General Cargo: This encompasses a wide range of manufactured goods, typically packed in containers or pallets. Examples include clothing and textiles, electronics and appliances, furniture and household goods, toys and games, pharmaceuticals and medical supplies, etc.
  • Metal Cargo: Due to their high value and susceptibility to corrosion during sea travel, metals often require specialised insurance.
  • Machinery: Heavy machinery and industrial equipment are often shipped disassembled across oceans. Marine insurance for machinery covers complete production lines, construction equipment, power generation equipment, etc.
  • Liquid Bulk Cargo: Specialised tankers transport large quantities of liquid commodities like oil, chemicals, beverages, etc.
  • Dry Bulk Cargo: Large quantities of dry commodities like grains, coal, mineral ores, animal feed, etc. are shipped in bulk carriers.

This list is not exhaustive, and marine insurance can be tailored to cover virtually any type of cargo transported by sea. For example, perishable goods like fruits, vegetables, and meat require specific handling and temperature control during transport. Special insurance coverage may be needed for these types of cargo.

The declared value of the cargo impacts the insurance premium. Accurately declaring the value ensures proper coverage in case of loss or damage.

Learn more about Marine Insurance

Different Types of Marine Insurance Policies

Marine insurance offers various policy options to cater to the specific needs of different stakeholders in the shipping industry. Here's a detailed breakdown of the most common types:

  1. Marine Cargo Insurance

    Coverage: Protects the financial interests of cargo owners in case of damage, loss, or destruction during transport.

    Benefits: Provides compensation for the value of lost or damaged cargo, covering costs associated with repairs, replacements, or salvage.

    Relevance: Essential for cargo owners (manufacturers, exporters, importers) to safeguard their financial exposure.

  2. Freight Insurance

    Coverage: Protects the cost of transporting the cargo, not the cargo itself.

    Benefits: Provides compensation for lost freight charges if the cargo is damaged or lost at sea. However, it does not cover the value of the cargo itself.

    Relevance: Beneficial for freight forwarders, shipping lines, or any party responsible for paying the freight charges.

  3. Hull and Machinery Insurance

    Coverage: Protects the ship itself, including its hull, machinery, and equipment.

    Benefits: Provides compensation for repairs or replacement costs in case of damage or total loss of the vessel due to covered perils.

    Relevance: Essential for ship owners to protect their investment in the vessel.

  4. Liability Insurance

    Coverage: Protects shipowners from legal liabilities arising from accidents at sea.

    Benefits: Provides compensation for claims like injuries to crew members, damage to other vessels or property, and pollution incidents.

    Relevance: Crucial for shipowners to mitigate financial risks associated with potential lawsuits.

Example of Cargo Ship Encountering with a Typhoon

The Ocean Voyager, a cargo vessel, was transiting from Chennai to Singapore carrying electronics and perishable items worth an estimated ₹20 crores. While navigating through the Bay of Bengal, it was caught in an unexpected typhoon. The violent storm caused extensive damage to the vessel's hull and resulted in the loss of cargo overboard valued at approximately ₹5 crores.

The marine insurance policy covering the Ocean Voyager included perils of the sea, which fortunately covered the damage to the ship and the loss of cargo. The claim was settled by the insurance company, covering the cost of repairs, salvaging operations, and compensation for the lost cargo.


Perils of the sea, from storms to piracy, can wreak havoc on ships and cargo. Marine insurance safeguards your financial interests by covering these unforeseen events. Whether you're a cargo owner, shipper, or vessel operator, there's a marine insurance policy designed to protect you. Don't navigate the risks of international trade alone, visit policybazaar.com and speak with an expert to understand your risk profile and take proactive steps to safeguard your business.

Written By: PolicyBazaar - Updated: 11 April 2024

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Policybazaar for Business - Marine Insurance - Customer Reviews
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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.