Transportation of goods is associated with several risks, such as damages, burglary, collision, etc. So, individuals associated with the transport or cargo business should ensure their resources against such unexpected perils. Marine cargo insurance can cover several transportation risks and protect one financially against any unforeseen expenses caused due to accidental damages.
Also Read – How To Link Your Business Instagram To Facebook?
What Is Marine Cargo Insurance?
Marine Insurance Act 1963 mandates the marine cargo insurance for several import-export trading. It covers damages caused to cargo vessels in transit by rail, road, waterways, etc. Policyholders receive coverage for the damages caused to cargo due to certain factors. The factors include strikes, collisions, weather conditions, navigation errors, sinking, war, etc.
What Is The Importance Of This Insurance?
Marine cargo insurance is essential for traders for the following reasons:
- Coverage for damages occurring in the sea – Vessels or containers in a ship or cargo are susceptible to losses or damages due to various reasons. Severe weather conditions, shipwrecks, etc., are some of the factors that can cause damage. So, having marine cargo insurance can help stay protected against such hazards.
- Coverage in case of theft – Thefts and burglary are common issues when transporting valuable goods via road. It may happen due to the negligence of the driver or in any desolate location. Marine cargo insurance can cover such losses by providing financial assistance to the policyholder.
- Compensation for damage to expensive items– Marine insurance can safeguard valuable items by providing financial coverage to the policyholder. Insurance providers insure the valuables up to a certain limit above the invoice value. This amount varies depending on the insurance company.
- Easy claim settlement process – Marine insurance claims are settled faster than liability claims. However, this is only valid if the damage or loss is uncertain and requires to be investigated.
- Carriers’ liability – Local laws and other terms and conditions are applied to all transport conventions, including international ones. Hence, according to the law, a limited carrier liability is applicable for this insurance policy. The amount of this liability is calculated using a special formula based on the actual weight of the deliverable items.
Also Read – Internet Service Provider in Coimbatore | Sathya Fibernet
Types Of Marine Cargo Insurance
Shippers can avail of a wide range of marine cargo insurance as per their requirements. Here are two primary types of marine cargo insurance:
- All-risk coverage
All-risk coverage is meant for comprehensive coverage for all types of physical losses or damages caused due to unforeseen mishaps. Unless the cause of the damage is excluded from marine cargo insurance, all-risk insurance covers it all.
All-risk cargo insurance policy is beneficial in several ways, such as control over claims, asset protection, automatic and continuous coverage, customised coverage and pricing, etc. Moreover, all-risk cover insurance is cost-effective despite offering comprehensive coverage.
- Named perils coverage
It’s restrictive marine cargo insurance that covers specific losses and damages as per the policy terms. It will not cover the perils that are not included in the policy. Fire, sinking, burning, collisions, stranding, etc., come under this insurance coverage. However, this policy does not cover the circumstances that come under the all-risk policy coverage.
Apart from contractors’ plant and machinery insurance, contractors can also purchase marine cargo insurance to safeguard their resources. Merchants, sellers, and individuals associated with import and export businesses are also eligible for this policy.
Also Read – Significance of Architectural Companies
Types Of Coverage Under Marine Cargo Insurance Plans
Here are two types of coverage offered by marine cargo insurance plans:
- ITC A and B – Basic risk coverage and all risks coverage (for inland transit within India only)
- ICC A and B – Basic risk and all risk coverage (for international cargo)
Inclusions
A marine cargo insurance policy covers the following risks:
- Risk clause
This clause covers the insured cargo against all risks that cause damage or losses to its resources except the ones excluded.
- Clause of both to blame collision
According to this clause both the ship owners need to share the responsibilities of collision when it occurs due to the negligence of both parties.
- Clause of general average
Under this clause, insurers need to cover the expenses of voluntarily incurred losses to protect the voyage against complete destruction.
Also Read – Why Are E-Commerce Marketing Developments Helpful For CBD Advertising?
Exclusions
Here are some of the situations and perils excluded from a marine cargo insurance policy:
- Perils like riots, wars, use of nuclear fission, etc.
- In case of negligence or wilful misconduct
- Damages or losses caused because the ship is ‘unseaworthy.’
- Any losses or damages caused due to financial default, delay, inherent vice, etc.
Conclusion
Individuals associated with transport, shipping or cargo business can consider purchasing marine cargo insurance. It offers comprehensive coverage against various unexpected damages to safeguard business resources.
