Marine insurance is a type of insurance policy that provides coverage against any damage/loss caused to cargo vessels, ships, terminals, etc. in which the goods are transported from one point of origin to another. Marine insurance coverage includes loss or damage caused to the shipment/cargo/ ship while is grounded, and also from untoward perils like- sinking, collision, burning, weather conditions, navigation errors, theft, jettison, improper stowage by the carrier, hook damage, strikes, war, and natural perils.
A marine cargo insurance policy is necessary for all the owners of the ship who use it for a commercial or transportation purpose. However, the insurance coverage is not only limited to sea there are plans that offer coverage during rail, land, sea, and air transport.
Any untoward perils can cause huge financial loss to the shipment. Insuring the goods against any unforeseen incident such as an accident, collision, overturning, etc. during transit also means a secured business. There is another important sub-category i.e. Marine Cargo insurance.
Features of Marine Insurance
1. Comprehensive Coverage: A marine cargo insurance policy offers comprehensive coverage against all the potential marine-related perils that the goods are exposed to while they are in transit.
2. Flexibility: The plans are flexible enough and have a variety of options to cater to the requirements of the insured, considering their budget.
3. Claim Survey and Settlement Assistance: This insurance policy frees from stress about the claim as the policy offers worldwide claims
settlement assistance along with a claim survey.
4. Extension of Coverage: Under this policy, one has the liberty to enhance the coverage with add-on benefits and cover the risk arising due to strikes, riots, etc.
Types of Marine Insurance Policies
There are different types of marine insurance plans that are designed to cater to the different needs of the customers. Mentioned below are some of the common types of plans. However, it can vary from one insurance provider to another.
Marine Cargo Insurance: Marine Cargo insurance is a type of insurance policy that covers the loss or damages caused to marine cargo during the transit. The protection is offered to the cargo owner along with the cover to the cargo for any loss or damage caused due to delay in the voyage, ship accident or unloading. Marine insurance also covers third-party liabilities arising from any loss or damage caused to the ship, port, or other transport forms from the insured cargo. This type of insurance is mainly beneficial for tankers and other heavy cargo shipments. Simply put marine insurance policy safeguards the ship.
Liability Insurance: This type of insurance protects the ship in case of a crash, collision or any attack that can lead to a huge loss or damage. It compensates the policyholder for any such liabilities that are beyond his control.
Hull Insurance: This marine insurance policy provides coverage to vessel including the furniture and articles of the ship against any unanticipated mishaps. It is imperative for the ship owners to buy this policy and not to overlook it.
Freight Insurance: It is a type of marine insurance policy that compensates the shipping company in case the freight is lost or damaged. Let us have a look at various other marine insurance plans available, some of which are:
- Open Marine Insurance Policy: An open policy is issued for a specific time period and covers all the shipments during that duration
- Time Plan: When a plan is bought for a specific period it is called a time policy. This policy is generally valid for a year or so.
- Voyage Plan: This plan is can be bought by those who wish to ensure a specific sea voyage. The moment the journey ends, the plan will be expired.
- Mixed Plan: When a policy provides the advantage of both a voyage plan and a time plan, then such a plan is referred to as a mixed plan.
- Port Risk Plan: When the ship is stationed at the port, a port risk plan is useful to ensure that it is protected against the risks involved.
- Valued Plan: Within this plan, the value is determined either of the cargo or the consignment, which is mentioned in the document of the policy in advance. This helps in a case if cargo or consignment gets lost determining the insurance value.
- Floating Plan: Under this plan, the amount of claim is specified beforehand. It is to be noted that the other details cannot be disclosed until the ship starts with the voyage. This plan is best suited who undertake regular cargo transportation trips.
- Wager Plan: This plan does not have any predefined fixed repayment terms, nevertheless, if the safety net provider finds any shortfall or harm deserving of cases, at that point reimbursement is given. If the harms are not worth considering, at that point there will not be any remuneration.
What is Covered in Marine Cargo Insurance?
The policy provides coverage from the risks arising during transit via sea and other modes of transport. The insurer compensates for the following:
- Marine insurance coverage is provided from dire situations like fire or explosion, sinking, stranding during a cargo journey
- Compensation is provided for expenses incurred due to collision, overturning or derailment of land conveyance
- Compensation is provided for expenses under a circumstance wherein the cargo is discharged from a port of distress/disturbance.
- Coverage for general average sacrifice salvages charges
- Protection against any natural calamities such as an earthquake or lightning
- It covers expenses such as survey fees, forwarding expenses, costs of reconditioning and charges of sue
- It also covers situations like jettison and washing overboard
- It also covers the total loss of the package whether overboard or dropped amidst loading or unloading
What is Not Covered in Marine Cargo Insurance?
Marine insurance coverage is not provided under the following situations:
- Compensation is not provided for any intentional loss/damage
- When the packaging quality of the cargo is not appropriate
- No cover shall be provided if the damage occurs due to bankruptcy, liquidation, failure/collapse in the finances
- Wear and Tear of the goods in transit
- No cover shall be provided if the loss occurs due to delay in the cargo
- Not all the insurers cover extreme unpredictable situations like war, strikes, riots and civil commotion
- Any loss or damage resulting due to insolvency
What Does the Institute Cargo Clauses Cover?
Marine insurance coverage is based on the Institute Cargo Clauses. And the coverage available under these standard clauses includes the following:
- Constructive Total
- Loss Actual Total
- Loss Particular Average i.e. Partial Loss by an insured peril
- General Average
- Collision Liability
- Expenses such as Reconditioning Costs, Survey Fees, Forwarding Expenses, Sue and Labor, etc.
Finding the Best Marine Insurance Policy Online
In India, there are a plethora of insurance companies who provide marine insurance coverage. What becomes a strenuous task is to select the most suitable policy as per one’s requirements.
The best way to buy a marine cargo insurance policy is to compare different online marine policies and accordingly select the plan, which suits you the most. It is easier to select online from the various variants that are available in a marine policy. The correct approach is to compare, analyze coverage and find the best marine insurance policy online.
Claim Process for Marine Insurance Policy
Here is the process and documents required for online marine insurance claim intimation and procedure:
- For claim intimation the insured need to provide the insurance policy number as printed on the policy document.
Below is the list of documents that are required for the claim process:
- Claim Bill
- Invoice KYC (above Rs. 1lakh)
- Damage Certificate
- Monetary Claim on Transporter
- Letter of Subrogation
- NEFT mandate duly filled & stamped by the bank / cancelled cheque with the name of the policyholder / Account number/ IFSC code
Once the claim is successfully filed the insurer will provide the URN/claim number, that can be used for uploading documents and checking the insurance claim status.
If the insured items are damaged, all the necessary steps should be taken to protect from further damage or loss.