Marine insurance is a policy that protects ships, cargo, terminals, and sea passengers from one destination port to the other. Marine insurance policy protects importers, exporters, forwarding agents, and shipping companies against losses to sea passengers, sea cargo, and sea vessels during transit upon the seas.
Some of the dangers awaiting seafarers and cargo ships include weather hazards, environmental events, pirate attacks, cross-border conflicts, and other unforeseen occurrences that may imperil the safety of goods in transit and everyone connected to the ships. With a valid marine insurance policy, the losses incurred during the transit of any ship from one destination to the other are minimized.
Although there are different types of marine insurance, policyholders can choose customized coverages that are unique to their specific trade. Depending on the size of the ship, the value, and type of cargo to be shipped, the travel routes to be traversed, and the preferences of the customer, a customized marine insurance policy can be contracted and applicable premiums worked out.
Sometimes marine insurance can extend to grounded ships and cargo offloaded and transported inland.
Types of marine insurance policies
Cargo insurance
This policy safeguards the cargo during and after shipment across the waters. It protects the cargo against damage caused by uploading, unloading, accidents, takeoff delays, and other unfortunate incidents.
Hull insurance
This policy protects the ship against physical damage to its hull, fittings, fixtures, machinery, and construction accessories. When collisions, tempests, fire outbreaks, and other unanticipated accidents happen, it causes physical damage to the ship and this is what this insurance class protects against.
Protection and indemnity insurance
This policy covers liabilities to third parties and the risks not covered by the first two policies stated above. These may be risks related to the ownership of the shipping vessel and the risks associated with hiring and using the ship for transportation services. This may also include the loss of cargo or damage thereby originating from accidents and other unforeseen events.
Risks covered in marine insurance
Marine insurance provides coverage to various kinds of risks, and some of them are:
- Terrible incidents such as fire outbreaks, explosions, sinking, and stranding
- Expenses incurred due to collision, overturning, and derailment during land shipment
- Discharge of cargo at a port due to distress or technical/environmental/social disturbances
- Natural calamities such as lightning and earthquakes
- Jettisoning, cargo washing overboard, damage of goods during loading or unloading
Risks that are not covered in marine insurance
Some risks are not covered in marine insurance, and some of these are:
- Deliberate damage done to cargo
- Damage occasioned by poor or inappropriate packaging
- Wear and tear of goods in transit
- Damage caused by delay in cargo handling
- Some insurers do not protect against war, industrial strikes, civil riots, and commotions
- Damage caused by insolvency, bankruptcy, liquidation, and finance failures
How to file for claims when damage occurs
The following documents must be provided by the policyholder and before the insurer can process his claims:
- Insurance policy number
- Claim bill
- Invoice
- KYC
- Damage certificate
- Monetary claim on the transporter
- Letter of subrogation
- Relevant photographs
- NEFT mandate signed by bank
The above details the entire concept of marine insurance, including its types, coverage, and benefits as well as the process for filing claims. These processes and types may vary from one insurance company to the other, but the fundamental aspects remain largely the same.
Photo by Fredrick Filix on Unsplash
