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

Marine Cargo Insurance Coverage is of the following types:

Institute Cargo Clause (C): Named peril basis: It covers loss or damage caused due to:

  • Fire or explosion
  • Overturning or derailment of land conveyance
  • Discharge of cargo at a point of distress and loss or damage caused by jettison

Institute Cargo Clause (B): Named peril basis: Though this cover is similar to ‘C’, it offers the following additional covers:

  • Lightning, volcanic eruption, earthquake
  • Washing overboard
  • The entry of river or seawater into the vessel, conveyance, lift van, or place of shortage
  • Total loss of any package while loading or unloading from vessel or craft

Institute Cargo Clause (A): It offers wide coverage as it covers all the perils of the sea.

Additional coverages:

It is possible to extend marine insurance policy to cover a wide range of industries, including but not limited to:

  • Pharmaceutical industry
  • Electronics Industry
  • Healthcare Industry
  • Fine Arts
  • Consumer Goods Industry

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.