Marine Insurance

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Types of Coverage Under Marine Cargo Insurance

Marine cargo insurance coverage apply to goods in transit, whether by sea, air, or land. The following are the types of coverage typically offered under marine cargo insurance coverage policies:
  • All-risk coverage: It is the most comprehensive insurance, that covers all risks to the cargo during transit. However, specific exclusions mention in policy terms are not covered.
  • Named perils coverage: Named perils covers only those losses that are explicitly listed in the policy. These may include, fire, theft, collision, or sinking of the vessel.
  • General average coverage: It applies when vessel carrying the cargo experiences a major peril during its journey. Here the cost of the loss is shared by all parties involved in the voyage. This coverage ensures that the insured’s share of the general average loss is covered. This coverage ensures that the insured’s share of the general average loss is covered.
  • Sue and labor coverage: Protects cargo during transit. It covers any costs related to preventing or minimizing loss or damage. Examples of these measures include towing, refloating, or repairing the vessel.
  • War risk coverage: It provides protection against losses or damages caused by war, piracy, or terrorism. This includes events that occur during transit.
  • Delay in start-up coverage: It covers any additional expenses or losses due to delays in a project’s launch. These delays are caused by damage or loss to the cargo during transit.

Therefore, it’s important for businesses involved in the transportation of goods to carefully consider the risks involved and choose the appropriate policy. Understanding the types of available coverage under marine cargo insurance, can help them protect their specific financial interests.

Additional Coverages of Marine Cargo Insurance

Marine cargo insurance policy provides coverage for goods and merchandise while they are in transit by sea, air, or land. In addition to the basic coverage, there are several additional coverages that can be added to the policy to provide additional protection to the insured.

  • War and Strikes Coverage: This coverage protects against losses caused by war or strikes that may affect the cargo during transportation.
  • Delay in Start-up Coverage: Offers protection against losses incurred due to delays in business operations, resulting from damage to cargo.
  • Rejection Insurance: This cover protects against losses resulting from rejection of the cargo due to damage, non-compliance with regulations, etc.
  • Temperature-controlled Cargo Coverage: This coverage is designed for goods that require temperature control during transportation. It provides protection against losses resulting from temperature fluctuations, spoilage, or contamination.
  • General Average Coverage: This coverage provides protection against losses resulting from general average contributions required by the carrier. Typically, all parties involved in the transportation share the losses resulting from a voluntary sacrifice made to save the entire cargo.
In conclusion, including add-ons to a marine cargo insurance coverage provides enhanced protection to the insured. These add-ons protect against various risks that can result in losses during transportation.  The choice of additional coverage depends on the nature of the cargo, the mode of transportation, and the risks involved. It is important to work with a knowledgeable insurance agent to determine the appropriate coverage needed for a particular shipment.

Case on Marine Cargo Insurance Coverage:

P.L. Pharma Company regularly exports its medicines to Asian nations. Hence, formed in 2013, the company has managed to carve a niche for itself in the market.

All shipments are carried via the sea route. Last year, a huge consignment was sent to Sri Lanka which reached the port successfully. However, while unloading the consignment, a fire broke out on a cargo ship anchored at the Port.

The blaze that started around 10AM was put out within an hour by four fire engines who rushed to the spot. Though no casualties were reported, the consignment worth thousands of dollars was engulfed in the fire. There was a significant million dollars loss to the company.

This prompted the company’s top management think, is there anything they could have done to curtail the financial loss?

The significant million-dollar loss prompted the company’s top management to reflect on whether there were any measures they could have taken to reduce the financial impact.


The situation would have been different if the company had bought marine cargo insurance. In fact, this policy covers loss or damages to the goods during transportation by any means of transport, like air, water, and rail. The insurer would have given compensation to P. L Pharma Company after the latter reported the loss due to fire.