If you are involved in the import-export business, you know how important it is to protect your goods from loss or damage during transit. Whether you are shipping raw materials, finished products, or personal belongings, you want to make sure they reach their destination safely and securely. That’s where marine insurance comes in.
Marine insurance is a type of insurance that covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination.
Marine insurance is not only for sea transportation, It also applies to other modes of transportation such as air, rail, or road. For example, when goods are shipped by air, the insurance is known as the contract of marine cargo insurance. Similarly, when goods are transported by land, the insurance is known as inland transit insurance.
Why do you need marine insurance?
Marine insurance is essential for many reasons. Here are some of them:
It protects your investment and reduces your financial risk. If your goods are damaged or lost during transit, you can claim compensation from your insurer and avoid losses. For example, if your cargo is worth $100,000 and it gets damaged by fire during transportation, you can recover the full amount from your insurer if you have an all-risk policy. On the other hand, if you don’t have any insurance, you will have to bear the entire loss yourself.
It fulfills your contractual obligations. Many import-export trade agreements require one or both parties to insure the goods under specific terms and conditions. For example, if you are selling goods on CIF (cost, insurance, and freight) terms, you are responsible for arranging and paying for the insurance of the goods until they reach the port of destination. If you fail to do so, you may face legal consequences or lose your credibility with your buyer.
It gives you peace of mind. You don’t have to worry about the uncertainties and hazards of transportation. You can focus on your core business activities and leave the rest to your insurer. For example, if your ship encounters a storm or a pirate attack during transit, you can rest assured that your insurer will take care of the situation and handle the claims process.
What types of marine insurance are available?
There are different types of marine insurance policies available depending on your needs and preferences. Some of the common ones are:
Hull insurance: This covers the damage or loss of the ship or vessel itself. It includes coverage for machinery, equipment, fittings, fuel, etc. It also covers liability for third-party claims arising from collisions or other accidents involving the ship. Hull insurance is usually taken by ship owners or operators who want to protect their valuable assets.
Cargo insurance: This covers the damage or loss of the goods or merchandise being transported. It includes coverage for theft, fire, water damage, breakage, etc. It also covers liability for third-party claims arising from damage to other cargo or property caused by the insured cargo. Cargo insurance is usually taken by exporters or importers who want to protect their goods in transit.
Freight insurance: This covers the loss of income due to the damage or loss of the cargo or vessel. It includes coverage for lost profits, extra expenses, demurrage charges, etc. It also covers liability for third-party claims arising from delay or non-delivery of the cargo. Freight insurance is usually taken by freight forwarders or carriers who want to protect their revenue stream.
Liability insurance: This covers the legal liability for third-party claims arising from the damage or loss of property or injury or death of persons caused by the ship or cargo. It includes coverage for bodily injury, property damage, pollution liability, etc. It also covers legal costs and expenses incurred in defending such claims. Liability insurance is usually taken by anyone who may be held liable for any mishap during transportation.
How to get marine insurance?
Getting marine insurance is easy and convenient. You can choose from various banks and financial institutions that offer marine insurance in India. You can also compare different policies online and select the one that suits your needs and budget.
To get marine insurance, you need to provide some basic information such as:
The details of the ship or vessel: This includes the name, type, size, age, value, flag, registration number, etc.
The details of the cargo or goods: This includes the description, quantity, weight, value, packing, marking, etc.
The value of the cargo or goods: This is usually based on the invoice value plus 10% to cover the freight and insurance charges. Alternatively, you can use the market value or the replacement value of the goods.
The origin and destination of the shipment: This includes the names and addresses of the consignor and consignee, the ports of loading and discharge, the transit points, etc.
The mode and route of transportation: This includes the means of transport such as ship, plane, truck, etc., the name and number of the carrier, the expected date and time of departure and arrival, etc.
The terms and conditions of the trade agreement: This includes the Incoterms that define the responsibilities and obligations of the seller and buyer regarding the delivery of goods, such as FOB (free on board), CIF (cost, insurance, and freight), DDP (delivered duty paid), etc.
Based on this information, the insurer will calculate the premium and issue a policy document that outlines the coverage, exclusions, limitations, and claims procedure.
How to claim marine insurance?
If you face any loss or damage to your ship or cargo during transit, you need to follow these steps to claim your marine insurance:
Notify your insurer as soon as possible and provide them with all the relevant details and documents such as bill of landing, invoice, packing list, survey report, etc. You should also inform the local authorities and obtain a police report if applicable.
Take all reasonable measures to minimize the loss or damage and preserve the evidence. You should also cooperate with the surveyor or adjuster appointed by your insurer to assess the extent and cause of the loss or damage.
Cooperate with your insurer and their representatives during the investigation and settlement process. You should provide all the necessary proofs and supporting documents to substantiate your claim. You should also avoid admitting liability or making any payments without your insurer’s consent.
Submit your claim within the stipulated time limit and follow up with your insurer until you receive your compensation. You should also keep a record of all the correspondence and transactions related to your claim.
Marine insurance is a vital part of any import-export business. It helps you protect your assets, fulfill your obligations, and reduce your risks. By choosing a suitable policy and following a proper procedure, you can ensure a smooth and hassle-free transportation of your goods.
I hope you enjoyed reading this article and learned something new. To find out more about the best marine insurance options, contact Alex Insurance Agency 407-847-2539 or use our online Quote Now platform. We can help you compare quotes from different providers and customize a policy that suits your budget and goals. If you have any questions or comments, please feel free to leave them below. Thank you for your attention and have a great day!
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