Marine Insurance

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The Marine Cargo Insurance policy covers the occurred loss or damage to property caused due to:

  • Natural disasters like cyclones, earthquakes, lightning, etc.
  • Man-made disasters like theft, violence, and piracy of ships
  • Collision, overturning, or derailment of land conveyance
  • Sinking or stranding of ships
  • Expenses such as survey fees, forwarding costs, and reconditioning costs

The Marine Cargo Insurance Policy covers transits by:

  • Water
  • Air
  • Road or Rail
  • Registered Post or Parcel
  • Courier
  • Or any combinations of the above

Types of Coverage Under Marine Cargo Insurance

Marine cargo insurance provides coverage for 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

All-risk coverage is the most comprehensive type of marine cargo insurance, covering all risks of loss or damage to the cargo during transit, except for specific exclusions listed in the policy.

Named perils coverage

Named perils coverage only covers losses that are specifically listed in the policy, such as fire, theft, collision, or sinking of the vessel.

General average coverage

General average coverage applies when the vessel carrying the cargo experiences a major peril, and 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.

Sue and labor coverage

Sue and labor coverage covers the cost of any necessary measures taken to prevent or minimize the loss or damage to the cargo during transit, such as towing, refloating, or repairing the vessel.

War risk coverage

War risk coverage provides coverage for losses or damages caused by acts of war, piracy, or terrorism during transit.

Delay in start-up coverage

Delay in start-up coverage provides coverage for any additional expenses or losses incurred due to delays in the start-up of a project caused by damage or loss to the cargo during transit.
It’s important for businesses involved in the transportation of goods to carefully consider the risks involved and choose the appropriate type of marine cargo insurance coverage to protect their financial interests.

Additional Coverages of Marine Cargo Insurance

Marine cargo insurance is a type of insurance policy that 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

This coverage provides protection against losses incurred due to delays in the startup of the business resulting from damage to the cargo.

Rejection Insurance

This coverage protects against losses resulting from the rejection of the cargo due to damage, non-compliance with regulations, or other reasons.

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. In general average, 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 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 started in the morning at around 10, 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.

The million-dollar loss made the company’s top management think, is there anything they could have done to curtail the financial loss?


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