Importance of Specific Transit Insurance cover
In the world of international trade, shipments face various risks during transit. One effective solution to protect consignees from potential losses is Specific Transit Insurance. Join us on a journey as we explore the importance of Specific Transit Insurance cover, its types, and advantages of this crucial transport insurance. Through a compelling real-life case study, we’ll witness how Specific Transit Insurance safeguards consignees against unexpected perils, ensuring their peace of mind and financial security. Get ready to discover the immense benefits of comprehensive transit insurance!
If you are transporting goods, marine insurance protects you against various type of losses
- Loss due to sinking, stranding, or a fire or explosion in the transporting vessel or vehicle
- A loss while loading or unloading cargo
- A loss due to an earthquake or lightening strike
- A loss due to jettisoning of goods or washing overboard
- A loss due to collision, overturning, derailment, accident of the vessel or vehicle
- Due to natural calamities
- General Average Loss
- A loss due to unforeseeable administrative expenses
- Total loss of good in any other way
Case Study on Specific Transit Insurance cover
P.L. Pharma Company, regularly exporting medicines to Asian countries via sea. Last year, a large consignment was sent to Sri Lanka. However, during the unloading of a major fire erupted on a cargo ship docked at the port. The fire was swiftly extinguished by four fire engines, but unfortunately, the consignment, valued at million dollar, was completely destroyed. Although the company did not report any casualties, it suffered a significant loss amounting to millions of dollars. This incident prompted the company’s management to wonder whether there were any preventive measures that could have taken to mitigated incident’s financial impact.
The company should have bought marine cargo insurance before embarking on the journey. Damage or losses to the goods being shipped would have been covered by this. This would have covered any means of transport like air, water ,road or rail. The insurance company would have provided compensation to P.L. Pharma Co. on receiving the report of loss due to fire.
- Natural disaster like cyclone, earthquake, lightening etc.
- Man made disasters like theft, violence, piracy at the sea, collision, overturning or derailment of land conveyance
- Sinking or standing of ships
- Expenses such as survey fees, forwarding costs, reconditioning cost
Also known as Transportation Insurance, it covers transits by Water, Air, Road or Rail, Registered post or parcel, Courier, or any combination of aforementioned modes.
Understanding the importance of Specific Transit Insurance cover is vital for businesses to protect their shipments against unforeseen risks and ensure smooth operations in the global trade landscape.
Types of Specific Marine Insurance Covers
Export or Import Insurance– Covers various risks, meets contractual requirements of shipping goods
Inland Transit- Covers goods being transported within India (domestic transit insurance), by mode.
Marine Hull – Covers boats, ships and even large vessels from all risks.
Specific Transit– Offers insurance of good in transit for a specific journey, with cover note issued almost immediately.
Advantages of Specific Transit Insurance to the consignee
Cover under Specific Transit insurance policy is important not only for businesses engaged in International trade but also domestic ones.
- Covers any commercial arrangement – It covers any commercial arrangement, including common forms of contracts like FOB (Free on Board), C&F (Cost & Freight), and CIF (Cost, Insurance, and Freight).
- Multiple insurance structure– You can select a structure from Annual Turn Over Policy (ATOP), specific voyage, Open Policy, and Annual Policy.
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