Trade is an integral part of any economy. A business involved in trade needs insurance protection against various risks associated with the transport of goods or their shipment from one place to another. This type of insurance is broadly referred to as marine insurance. Marine insurance is a wide concept available to the buyers through various subtypes depending on the requirement. Different types of marine insurance policies are made compulsory for various parties involved in the trade in order to manage the risk.
Marine cargo insurance is one of the widely purchased insurance covers in India. Let’s look at the difference between marine insurance and cargo insurance:
Marine insurance covers the loss or damage to ships, cargo or shipment, terminals and any transport by which the goods are acquired, transferred and held between the place of origin and the final destination. On the other hand, cargo insurance is the sub-branch of marine insurance that provides protection against loss or damage caused to cargo whilst in transit through rail, road, waterways, air, registered post or courier.
Marine insurance is available in a variety of types such as hull insurance, machinery insurance, liability insurance, freight insurance, cargo insurance, voyage insurance, port risk insurance and wager policy etc which can be purchased based on the requirement of the buyer. Cargo insurance is also one of the types of marine insurance. Cargo insurance can be purchased by import and export merchants, buyers, and sellers, contractors, buying agents and banks or any other party engaged in the business of movement of goods or cargo.
Marine insurance includes cover for the hull, machinery, third party liability as well as the shipment/goods carried in the vessel etc. In case of marine cargo insurance, insurable interest lies in the cargo or goods carried from the place of origin to the final destination. Hence, cargo insurance is more specific in nature and offers coverage to shipments against various perils.
Marine insurance as a concept is hence comprehensive and wide in nature. Cargo insurance coverage can be availed either only for named perils or for wider coverage including unnamed perils. Depending on the type of trade, domestic or international, and the requirement of coverage, the policy cover can be designed.
Basically, marine insurance is customizable depending on who buys the cover. For example, the owner of a ship can buy a hull insurance policy to manage the risk associated with vessel-related mishaps. Parties involved in the movement of cargo can avail marine insurance for cargo to maintain the financial stability of their business. Marine insurance is a complex area to deal in, but is essential for businesses to boost trade for high growth.