Marine Insurance

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Marine Insurance Policy is one of the most useful covers offered by the insurers to protect the businesses exporting/importing and transporting the goods.  It is a comprehensive policy that includes several covers depending on the type of transit undertaken.

The policy is available in a customized format and covers all kinds of legal exports and imports of goods between different nations as well as the domestic transit within the country. With the development of larger carriers and the development of road and rail transport, it has become comparatively easier to transport the goods from one place to another. The fear of natural disasters, sea perils, and other unexpected mishaps can lead to considerable loss to the businesses and economy.

The potential hazards on the sea are covered by Marine Hull and Marine Cargo Insurance Policies while the domestic transit of goods is protected through the Inland Transit Insurance Policy. There are however many conditions, considered out of the umbrella of the comprehensive marine cover.

Let’s look at these Marine Insurance Exclusions through the examples below:

Expanding Busine

Suppose an organization avails an inland transit policy for the transportation of its goods within the country. With the rise in its commercial business and good-quality of its products, it starts getting orders from foreign countries. Will the export of its goods be covered under the inland transit cover?
The answer is no. This is because an inland transit insurance policy solely covers the cost of damage to goods through the land. Excluded sea and air routes from this policy. For the export and import of goods, one needs to avail of the Marine Cargo Insurance policy that provides cover for goods, transported by means of transport used in trans-national trade.

Marine Exclusion:

Exclusions often depend on the type of policy availed. Assess your prospective needs and avail a suitable policy accordingly to save yourself from paying up extra premium. Read the policy document thoroughly before signing.

Criminal Act of Employees/Agents:

A manufacturing organization requires the transportation of coal and iron ore to its subsidiaries in other countries. It has availed the Marine Cargo Insurance for the same. However, during transit, there is an unfortunate explosion and complete loss of complete cargo, and intense injuries to some crew members.
When the owner demands compensation from the insurer, it initially seems to be a case of oxidation of coal that caught fire resulting in an explosion. But, after proper investigation, found that the explosion was a result of the deliberate criminal act of some crew members who had personal grudges with the owner or others on the ship.

Marine Exclusion:

No insurer is responsible to pay up for the criminal actions of others. In case,  found that crew members or managers committed such acts with criminal intention, the insurance policy ceases to exist.

Packaging of the Material:

Packaging of cargo is the key to ensuring safe transit on high seas or on long distances by road.
A tomato farmer prepares to transport the vegetable into the city market which might take an overnight journey. He has availed of an inland transit insurance policy for any emergency. He packs the product in some cartons made from low-quality material. While transportation, he halts at a place for a night. He plans to keep the product in the truck for the night. However, due to sudden rainfall, arises the need to store them in a warehouse.
The shifting and storage process breaks some of the packages (due to lower quality packaging), leading to loss and contamination of tomatoes.

Marine Exclusion:

The insurance policy will not cover any damage caused due to packaging defects. This stands true for all kinds of marine insurance policies

Transporting Perishable Goods:

An ice cream manufacturer transports it in a refrigerator truck. However, the route taken for transit includes a flood-prone area. Unfortunately, as transporting the goods, a flood occurs. This leads to delay in transit. Excessive delay leads to the melting of the ice cream.

Marine Exclusion:

Though it might be written in the insurance policy guidelines that the loss due to delay and natural disaster will be covered but such is not the case when the inherent property of the goods leads to contamination or loss. The property of ice cream is that it will melt if does not maintain a suitable temperature. Such inherent vice of the product leading to loss will not cover under the insurance policy.

So, it is feasible to talk to your broker or insurer beforehand to avoid any misunderstanding regarding when any marine insurance policy will be applicable. Assess your needs properly, make sure that the policy availed suits to your needs. Choose the most reliable insurer so that you can be assured at the time of need.
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