What is Marine Insurance?

Marine insurance is an essential form of insurance coverage that provides protection against the loss or damage of cargo, ships, terminals, and any mode of transportation used for the acquisition and transport of goods between the point of origin and destination. 

This type of insurance policy refers to an indemnity contract between the insurer and the insured, which outlines the terms and conditions of the coverage provided. The scope of marine insurance coverage extends to various areas, including exposed goods kept onshore or offshore, marine liability or casualty, and hull. 

This comprehensive coverage is designed to mitigate the financial risks associated with marine operations and protect businesses involved in shipping and maritime operations. The loss or damage of cargo, ships, terminals, or any transportation mode used for the acquisition and transport of goods can result in significant financial losses for businesses. This is where marine insurance plays a vital role in mitigating such risks and ensuring that businesses remain financially secure.

Why is Marine Insurance Important?

Marine insurance is an important safeguard for goods in transit, protecting them against damage and loss during transportation. In India, marine insurance policies offer several benefits that make them an excellent investment for anyone involved in marine transportation.

• Comprehensive all-risk coverage against potential marine-related perils during transit
• Easy customization to meet specific needs of customers
• Flexibility with a variety of options to cater to the requirements of the insured, considering their budget
• Worldwide claims settlement assistance and claim survey services to eliminate stress and uncertainty
• Extension of coverage with add-on benefits, including coverage for strikes, riots, and other unexpected events.

What are the Types of Marine Insurance Policies in India?

Marine insurance policies are specifically designed to cater to the different needs of customers, and there are various types of policies available. However, the types of policies may differ from one insurance provider to another. Let's take a look at some of the common types of marine insurance policies available:

• Import Policy: This policy covers any type of import from anywhere in the world to anywhere in India. It offers coverage for transit modes of air and sea.
• Export Policy: This policy covers any type of export from anywhere in India to anywhere in the world. It primarily offers coverage for transit modes of air and sea.
• Inland Marine Insurance: This policy covers any kind of transportation of goods mostly by road and rail from anywhere to anywhere in India.
• Cargo Insurance: Cargo insurance provides coverage for any loss or damages caused to marine cargo during transit. The policy offers protection 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.
• Hull Insurance: This policy provides coverage to the vessel including the furniture and articles of the ship against any unanticipated mishaps. It is imperative for ship owners to buy this policy and not overlook it.
• Freight Insurance: Freight Insurance policy compensates the shipping company in case the freight is lost or damaged.
• Open Marine Insurance Policy: This policy is issued for a specific time period and covers all the shipments during that duration.
• Sales Turn over policy (STOP) - STOP is a premium-based open policy that provides transit insurance coverage for discerning customers in India. It encompasses a wide range of aspects, including imports, customs duty, domestic procurement, inter-factory movements, exports, and domestic sales. Additionally, it offers temporary storage cover at intermediate locations. The uniqueness of STOP lies in its premium calculation solely based on sales turnover. With its comprehensive and tailored approach to coverage, STOP ensures the utmost protection and flexibility for customers' valuable assets during transit, making it an ideal choice for those seeking exceptional quality and peace of mind.

Inclusions Under Marine Insurance In India

In marine insurance policies, there are certain events that are covered and others that are not. Here is an overview of what is typically included and excluded in marine insurance coverage:

• Fire accidents that damage the insured goods while they are in transit.
• Sinking of the vessel carrying the goods.
• Collisions with other ships or objects.
• Derailment of land conveyance carrying the goods.
• Survey fees incurred to assess the damage caused to the goods.
• Cost of reconditioning or repairing the goods that are damaged during transit.
• Jettisons or the act of throwing goods overboard to save the vessel from sinking or capsizing.
• General average sacrifice salvage charges, which are the expenses incurred to save the entire ship and its cargo.
• Explosion of the vessel or any object on the vessel that causes damage to the goods.
• Stranding or the accidental grounding of the vessel that damages the goods.
• Overturning of the vessel or the capsizing of the ship that causes damage to the goods.
• If cargo leaves the port of distress due to an insured peril, then the insurer covers the loss.
• Damage caused by natural calamities such as storms, cyclones, or floods.
• Forwarding expenses to transport the goods to their intended destination after an insured peril.
• Washing overboard, which is the loss of goods due to waves washing them over the vessel's side.
• Total loss of the package during loading or unloading of the goods.

Exclusions Under Marine Insurance In India

The Marine Insurance policy offers comprehensive coverage against a range of risks associated with the transportation of goods by sea, air, or land. However, it is important to note that certain losses or damages are not covered under this policy. These exclusions typically include:

• Intentional loss or damage caused by the insured party
• Losses resulting from war or warlike operations
• Damage caused by inadequate or faulty packaging
• Losses due to strikes, riots, or civil commotion
• Bankruptcy, insolvency, or financial failure of the party responsible for the goods
• Losses arising from liquidation or failure of the business

It's essential for the policyholder to carefully review the policy's terms and conditions to understand the coverage limits and exclusions before filing a claim.