For centuries, ships are used as a mode of transportation. The pre-aeroplane era relied heavily on sea routes to facilitate trade and commerce. But sea routes were never free of perils. They are plagued with various uncertainties like bad weather, collisions, accidents and even hijacking by pirates. These risks have given birth to marine insurance that is believed to be one of the oldest forms of insurance.
What is marine insurance?
A marine insurance policy covers the transportation of goods via water route. It provides an insurance cover for not only the vessel or ship but also the cargo that it is being carried along. Any damages between the point of origin to the point of its destination is covered under marine insurance
There are four types of marine insurance covers that you can get -
Hull and Machinery insurance
Hull is the main structure of the ship or vessel. A hull policy covers the ship’s torso and any damages to it. Since not only the ship but also the machinery installed are equally important, a hull policy is generally bundled as Hull and Machinery Policy. It is usually opted for by shipowners.
The consignment owners face the risk of their cargo being damaged, lost or mishandled during the journey. Hence, to protect against such risk that may lead to a financial loss, a cargo policy is issued. It covers damages at the port, ship, railway track or while loading and unloading your consignment. The coverage that a cargo policy offers is far more as compared to the premiums charged for it.
During transit, the ship along with its cargo may be exposed to risks of a crash, collision or other kinds. Where the factors are beyond the control of the shipowner, a liability marine insurance policy protects the owner against the claims made by cargo owners.
In case of damage to the freight, the losses shall are required to be borne by the shipping company. Freight insurance safeguards the interest of the shipping company in this regard.
The risk associated with the transportation of goods is different for each type of journey. Thus different customers require different types of marine insurance coverage. Here are a few common types of coverage that are available -
- Any loss or damage while loading or unloading the cargo.
- Jettison or washing overboard of the vessel.
- Sinking and stranding of the vessel.
- Loss due to fire.
- Natural calamities.
- Collision, derailment or accidents
- Total loss coverage.
While most marine insurance coverage includes damage or loss to cargo, a few plans have limitations with regards to cross-border civil disturbances or pirate attacks. Let us understand the exclusions to your marine insurance coverage-
- Any regular tear and wear are excluded under your insurance cover.
- Damage suffered due to inadequate and incorrect packaging of goods.
- Costs that are incurred due to delay in transportation are not under the purview of your commercial insurance
- Any wilful damage with the intention to create losses.
- Damages caused due to political unrest, war, riots and similar situations.
So make sure to insure your cargo using a marine insurance plan as it provides financial support to your business and can help you focus on expansion instead of worrying about the risks in transit. Be wise and stay insured.
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