In this era of globalization, domestic borders no longer limit how far you can expand your business. With liberalization opening out our economy for almost thirty years, our export and import businesses have grown exponentially. While exclusive products and services that India is known for being exported to different countries, businesses also import products and materials from faraway shores to provide them to Indian users and consumers. Hence it’s not surprising that the risk of damage or loss of goods due to physical transits has become quite significant.
When you are involved in exporting or importing goods using marine or water transport modes, there is always a relatively high risk of damage. Any unforeseen situation during the transit could prevent the goods from getting delivered in good shape to the recipient, thereby causing significant financial loss to your business. There is one solution to help you avoid bearing such a loss, however – Marine Insurance for export and import of goods or cargo.
Let’s discuss some significant advantages of buying export and import cargo insurance:
- It Reduces Your Exposure to Losses
Once the goods you have exported or imported are in transit on a ship, any unforeseen event such as storms, ship sinking, or robbery i.e. piracy, can cause financial harm to your business. If there is no active marine insurance, you will end up losing the goods without getting compensation for the loss. To avoid facing such a problem, investing in export and import insurance is a wise decision. It will lower your risk while providing you the compensation benefits as defined by the chosen policy.
Also, it often happens that the insured asks for higher claims than what the insurance company is paying. These assessment issues may arise because of the parameters chosen by the insurers to estimate the financial loss. However, renowned insurers in India use the internationally accepted principles defined under Institute Cargo Clauses (ICC), ICC (A), ICC (B), and ICC (C), to estimate the loss value. So, you need not worry about loss estimation issues provided you choose the right policy that fits your needs.
- It Covers Legal Liabilities
You may find that some countries demand proper insurance coverage before accepting or sending goods as a part of your export/import business. For instance, authorities at the ports of some countries ask for certain insurance paperwork to complete import procedures. This means that not buying the required insurance can have its impact on your business transactions at such locations. It would be best if you purchase export and import marine insurance as required to ensure the seamless processing of goods at these ports. It fulfills your obligations and often needs to be presented to get any compensation amount, as may be required.
- Add-on Coverages Available
The basic insurance coverage that comes with an export and import policy provides specific details on inclusions and exclusions. The coverage and the premium paid by the insured are inter-related. There could also be instances where you would want your policy to offer additional cover for specific events.
For example, loss of goods due to terrorist attacks is not generally covered in a basic marine insurance policy. However, you can find some insurers offering add-ons to extend the coverage limit of the policy for this event while incurring a slightly higher premium. Similarly, there are other add-ons you can include at the time of buying the policy as per your requirements.
At SecureNow, we make sure all our clients understand and include the necessary add-ons while buying insurance policies we offer, including for marine insurance policies.
The Bottom Line
Running a business in India that involves the export and import of a variety of goods is a tough task. As a business owner, you have a whole lot of responsibilities to handle. With a suitable marine insurance policy, you can be assured that your insurer will be there for you to cover your risk of damage or loss of goods in transit.