In this article, we will learn about what is not covered under marine insurance. Marine Insurance doesn’t offer any coverage in the following cases:
- Loss or damage due to the willful act of negligence and misconduct
- Any loss or damage due to delay
- Loss or damage due to improper packing
- Financial default or insolvency of owners, charterers, managers, or operators of the vessel
- Loss or damage due to wire, strike, riot, and civil commotion
- Loss or damage arising from the use of nuclear fission, weapon, or any other radioactive force
- 1/4th of collision damage
- Removal of wreck
- Contamination due to radioactive rays
- Attack or damage from biological, biochemical, chemical, or electromagnetic weapons
Read More: What is covered under Marine Cargo Insurance?
Exclusion of high-value or unique goods, such as fine art, antiques, and jewelry, from coverage is common due to their fluctuating value and limited availability.
Insurance companies deem certain goods too risky or hazardous to cover under marine insurance, including explosives, radioactive materials, and certain chemicals. These types of goods pose a significant risk to the safety of the ship and crew, as well as to other vessels in the vicinity, and may also have environmental implications if spilled or released.
Marine insurance usually excludes coverage for perishable items such as fruits, vegetables, and fresh produce. This is because these types of goods are susceptible to spoilage, and the insurance company may not be able to guarantee their condition at the point of arrival.
Insurance companies may not cover goods with high value due to their inability to afford substantial payouts in case of loss or damage. In these cases, shippers may opt to obtain separate insurance coverage for the high-value goods.
In conclusion, certain goods may be excluded from marine insurance coverage due to their hazardous nature, perishability, or high value. Shippers must carefully consider the nature of the goods and obtain suitable insurance coverage to mitigate shipping risks.
Case on Marine Insurance Exclusions
In 2015, Excel Electronics got a big contract to export 500 electronic items, including LED, mobile, and washing machines, to the Eastern nation. Before dispatching, the packaging team scrutinized the same and released consignment only after getting the green signal from the team.
It took seven days for the consignment to reach its destination. However, at the time of unloading, the buyer found the wet consignment. It was due to the negligence of the packaging team, which caused damage to the consignment in a substantial part due to water.
The buyer filed the case against the seller and asked for compensation. On the other hand, the seller had marine insurance and approached the insurer for the claim settlement. However, if caused damage due to improper packing insurer rejects the claim. As a result, Excel Electronics incurred all the losses on its own.
In a similar case, G.S Automobile sent a consignment of automobile tools to a neighbouring nation. However, if damaged at the time of unloading, 1/4th of the consignment. Though G.S Automobile had marine insurance policy; the insurer refused to offer the cover as the damage fell under the exclusion.
Additional Read: 4 general exclusions in Marine Export and Import Policy
About The Author
Simran
MBA Insurance and Risk
With extensive experience in the insurance industry, Simran is a seasoned writer specializing in articles on marine insurance for SecureNow. Drawing from 5 years of expertise in the field, she possesses a comprehensive understanding of the complexities and nuances of marine insurance policies. Her articles offer valuable insights into various aspects of marine insurance, including cargo protection, hull insurance, and liability coverage for marine-related risks. Renowned for their insightful analysis and informative content, Simran is committed to providing readers with actionable information that helps them navigate the intricacies of marine insurance with confidence.
