What are the types of marine insurance?
A marine insurance policy covers the losses which are suffered when goods are moved from one place to another. The policy can be taken to cover the loss suffered by the goods being transported or to cover the vessel or vehicle in which transportation is taking place. A marine insurance policy, therefore, comes in many variants and the coverage depends on the variant selected. Here are the main types of marine insurance policies which are available in the market –
- Cargo insurance
A cargo insurance policy covers the cargo, or the goods, which are being transported from one place to another.
- Hull insurance
This policy covers the vessel of transportation against damages and accidents. The policy covers the hull and torso of the transportation vehicle, like a ship, as well as the different articles present in the vessel.
- Freight insurance
Under freight insurance, the loss of freight suffered by the vessel operator is covered. In many cases of marine transportation, the vessel operator is supposed to receive the freight amount for carriage of goods only when the goods are delivered safely to their destination. If, however, the goods are damaged in transit, the operator would lose the freight receivable. A freight insurance policy, therefore, provides compensation for the loss of freight.
- Liability insurance
Liability insurance is often taken as a part of hull insurance policy. Under liability insurance plans, if the vessel collides with another vessel and there is damage, the liability suffered by the owner of the vessel for such collision is covered.
These are the types of marine insurance. There are also various types of policies under marine insurance which include the following –
- Time policy – this policy provides coverage up to a specified time, for instance, one year.
- Voyage policy – this policy provides coverage for a specific voyage. As soon as the voyage or trip comes to an end, the policy expires
- Mixed policy – this policy combines time policy and voyage policy and covers voyages taken between specific destinations during a specific time period.
- Port risk policy – this policy covers the loss suffered by the ship when it is anchored at a port
- Valued policy – under this policy the value of the cargo being transported is mentioned beforehand which specifies the coverage level of the plan. In case of loss of cargo, the value mentioned in the policy is paid as claim
- Unvalued policy – when the value of the cargo is not determined beforehand, it is called an unvalued policy. Under this policy, the loss suffered would be estimated when the loss happens.
- Floating policy – this policy is for businesses which transport goods frequently. Under this policy the policyholder buys the policy for a lump-sum value. Nothing else is specified. When the goods are actually transported, a declaration is made for the value of goods which is deducted from the lump sum amount selected under the policy. The policy, therefore, covers multiple voyages up to the lump sum limit.
- Block policy – this policy covers transportation of goods both by land as well as sea
- Composite policy – this policy is underwritten by multiple underwriters and each underwriter has a fixed liability
- Fleet policy – this policy is taken by the owner of the vessel to cover the fleet of vessels which he owns.
These are the basic types of marine insurance policies. Businesses can select the most suitable policy for their requirements to get the best coverage at the lowest rate of premiums.