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. It is broadly known as marine insurance. Marine insurance is a wide concept available to buyers through various subtypes depending on the requirement. Different types of marine and cargo insurance policies are must-buys for various parties involved in the trade to manage the risks.
How is marine insurance different from cargo insurance?
One of the widely purchased insurance covers in India is marine insurance. Let’s look at the difference between marine insurance and cargo insurance:
Type of losses covered:
Marine insurance covers the loss or damage to ships, cargo, or shipments. It also bears the cost of damage to terminals and any transport that acquires, transfers,s or holds the goods between the origin and final destination. On the other hand, cargo insurance is the sub-branch of marine insurance. It provides protection against loss or damage caused to cargo whilst in transit through rail, road, waterways, air, registered post, or courier. Varied types of insurance covers
Marine insurance is available in a variety of types such as export-import, inland transit, hull insurance, machinery insurance, and liability insurance. Freight insurance, cargo insurance, voyage insurance, port risk insurance, and wager policy, etc are other types of marine insurance. A buyer can purchase any kind of policy depending upon its requirement. Cargo insurance is also one of the types of marine insurance. Import and export merchants, buyers, and sellers, contractors, buying agents, and banks can buy cargo insurance. It can be bought by any other parties engaged in the business of movement of goods or cargo.
Nature of coverage:
Marine insurance includes cover for the hull, machinery, third-party liability, the shipment/goods carried in the vessel, etc. In the case of 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. One can avail cargo insurance coverage either only for named perils or for wider coverage including unnamed perils. Design the policy cover depending on the type of trade, domestic or international, and the requirement of coverage.
The difference in customization:
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 business financial stability. Marine insurance is a complex area to deal in but is essential for businesses to boost trade for high growth.