Marine insurance is an important requirement for the smooth functioning of businesses involved in the shipping of goods. This insurance reassures their customers about having cover against damage or loss due to various marine risks.
Marine insurance provides coverage for cargo losses, damage to ships, vessels, or any transport in which the goods are being shipped. Despite all regular safety measures taken, marine losses can be heavy and can disrupt your business. One of the great features of marine insurance is it allows businesses to customize the cover based on their requirement. In specific marine insurance, businesses can avail cover for a specific transit only. Let’s know in detail about the features of specific marine insurance policy
Features and advantages of marine insurance
The right marine insurance policy with an adequate amount of coverage can protect your business from possible marine losses. Let’s take a look at the important marine insurance features and benefits of marine insurance:
Marine insurance comes in various types and can be customized based on the nature of the business and the business requirement.
- Comprehensive coverage:
In Marine insurance of any type, either an open policy or a specific marine insurance policy, all-round coverage is offered. The marine insurance policy covers a wide range of named and unnamed marine perils.
Marine insurance policy offers stability to the business by providing financial protection in the event of unexpected loss or damage due to marine perils.
- Wide cover:
One of the main benefits of a marine insurance policy is that it provides wide coverage for all types of transport within the country and also across the borders.
Perils covered by marine insurance
The marine insurance policy covers a wide range of perils. Marine cargo insurance or specific marine insurance provides coverage for the perils mentioned below:
- Fire or explosion
- Overturning of the ship or land conveyance
- Washing overboard
- General average sacrifice salvage charges
- Total loss of package lost overboard or dropped while loading/unloading
- Earthquake, lightning, or volcanic eruption
- Discharge of cargo at the port of distress
- Theft and malicious acts
- Any other unnamed perils causing loss or damage to cargo
The coverage for loss or damage caused due to various perils is provided as per various Institute Cargo Clauses (ICC) – A, B, and C. Coverage under Institute Cargo Clauses is limited to goods that are in transit.
Institute Cargo Clauses (ICC)-A provides extensive coverage by covering various named and unnamed marine perils. Institute Cargo Clauses (ICC)–B is slightly restrictive as the coverage gets limited to the specific perils. Institute Cargo Clauses (ICC)–C is considered to be the most restrictive as only certain specified perils are covered.
Exclusions under marine insurance
Though benefits of marine insurance are extensive with the comprehensive coverage offered. There are certain exclusions applicable to the marine insurance policy. Following are the general exclusions under a marine insurance policy:
- Losses or damage caused due to willful misconduct of the insured
- Losses caused due to delay
- Wear and tear, ordinary leakage, etc
- Inadequate and improper packaging
- War and nuclear perils
- Riots, strikes, and terrorism
However, losses arising out of the war, terrorism, and riots can be covered by paying an additional premium depending on the terms and conditions of the marine insurance policy. Understanding the features of marine insurance helps businesses to make the right choices.