Transporting an object from one place to another always carries a degree of risk. Before accepting this responsibility, it is important to carefully consider the end-to-end delivery process and the parties involved. Financial protection is an utmost necessity for businesses involved in the trade and shipping industry by availing insurance coverage suitable for the business, such as marine insurance, shipping insurance, and transit insurance. Knowing the difference between various types of insurance coverage available can help you make the right choice.
What is Marine Insurance? How Does it Work?
A marine insurance policy is a type of indemnity contract that provides assurance for goods that are shipped from their country of origin to their destination. This insurance coverage includes all forms or modes of transport. These include transport via ships, cargo, and involved terminals, between the points of origin & final destination of goods in-transit.
Marine insurance policy transfers the liability of goods from the involved parties to the insurance company. This limits the legal liability of intermediaries handling the goods. Instead of solely bearing responsibility, exporters can purchase insurance to cover any possible loss or damage to their goods. Although carriers may bear the cost of damages and losses, compensation is typically on a per-package or per-consignment basis. It may not cover the full cost of goods in transit. Marine insurance is necessary to fulfill contractual obligations and protect the buyer’s or bank’s interests.
What is Shipping Insurance? How Does it Work?
Shipping insurance serves as a protective shield for your shipments, providing coverage for potential damages, losses, or thefts that may occur during transportation from your warehouse to the customer’s doorstep. With shipping insurance, you can enjoy the convenience of hassle-free shipping, confidently dispatching valuable items knowing that you are covered.
When shipping items, declaring their value is necessary to insure them. The company will reimburse the declared value if it loses, steals, or damages the package. To file a claim for a problem during shipping, the business must provide shipping information, receipts, and documentation of the declared value. The claim filing deadline may vary from carrier to carrier depending on the package destination.
Difference Between Marine Insurance and Shipping Insurance
|Marine insurance, a broader term, covers the loss or damage of cargo, ships, vessels, terminals, and any transport by which the property is acquired, transferred, or held between the points of origin of the shipment and its final destination.||Shipping insurance specifically provides coverage for goods that are transported by mail or courier.|
|The marine policy provides wider coverage for various known and unknown perils in the process of trade or transportation of goods. Marine insurance includes sub-branches. These branches include cargo insurance, offshore and onshore exposed property insurance, hull insurance, marine casualty insurance, and marine liability insurance.||It is a more specific type of insurance that focuses on protecting packages and parcels during the shipping process.|
|Parties involved in business trade and the shipping industry can buy a marine insurance policy customised to the need of their business.||Shipping insurance policies are typically purchased by individuals or businesses shipping high-value items to protect themselves against loss, damage, or theft of the package while in transit.|
In conclusion, marine insurance and shipping insurance offer different types of coverage for goods and properties during transportation. Marine insurance is a broad and complex term that covers various aspects of marine transport and operations, including cargo, onshore and offshore property, hull, casualty, and liability. On the other hand, shipping insurance is a more specific type of insurance that focuses solely on protecting packages and parcels during the shipping process. While marine insurance provides a comprehensive solution for marine transport and operations, shipping insurance is an essential tool for individuals and businesses shipping high-value items to protect themselves against loss, damage, or theft of the package while in transit. Understanding the difference can help in making an informed buying decision.