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
Additional Read: What is covered under Marine Cargo Insurance?
Certain goods are excluded from coverage due to their high value or unique nature. Fine art, antiques, and jewelry, for example, may be excluded from coverage because their value can fluctuate greatly and they may be difficult to replace if lost or damaged. Similarly, items that are considered to
The primary reason why certain goods are not covered under marine insurance is that they are deemed too risky or hazardous to insure. Some examples of goods that may not be covered include hazardous materials like 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.
Other goods that may not be covered by marine insurance include perishable items like fruits, vegetables, and other 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.
Finally, some goods may not be covered under marine insurance due to their high value, as the insurance company may not be able to afford to pay out a large sum of money in case of loss or damage. In these cases, shippers may opt to obtain separate insurance coverage for the high-value goods.
In conclusion, marine insurance provides coverage for a wide range of goods, but certain goods may not be covered due to their hazardous nature, perishability, or high value. It is important for shippers to carefully consider the nature of the goods being transported and obtain appropriate insurance coverage to mitigate the risks associated with shipping.
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
