Marine insurance is a comprehensive and extensive domain in insurance with a wide scope of coverage. There are various types of marine insurance and businesses can customize these policies as per their needs. The policy can provide open coverage to large exporters whose business involves routine shipping over a specific period. If your business demands occasional shipping, marine insurance can offer you a policy customized to your specific need.
What is specific marine insurance?
Specific marine insurance is a type of marine insurance that covers risks to specific goods for a particular journey/voyage. The risk evaluation in specific marine insurance is based on the value of the cargo, name of the conveyance or ship, port of landing and discharge, etc. The coverage offered under the specific marine insurance policy remains valid for that specific voyage and till the time the cargo arrives at its destination. This type of marine insurance is also referred to as ‘voyage policy’ or ‘specific voyage policy’.
Why do businesses need a marine insurance policy?
Businesses and trade involved in the transit of goods within and across borders face numerous risks. Their cargo could face threats from natural calamities, theft, piracy, hijacking, or any unnamed perils. Despite these risks, businesses need to deliver their goods to the right place at the right time efficiently to avoid financial losses and damage to the company’s goodwill. Thus, the only way to financially secure cargo is by availing of the right type of marine insurance policy. Having a marine insurance policy is important in order to secure the business against various marine risks and losses. Hence businesses need to have a marine insurance policy to successfully thrive and grow without any hiccups due to various perils.
Who should buy this policy?
Marine insurance is an apt policy for sellers, buyers, import or export merchants, banks, contractors. Anyone engaged in the transport, import, or export of goods within the country or across borders should also consider getting this policy. Specific marine insurance policy is mainly suitable for exporters who occasionally export goods it covers a specific voyage.
Types of marine losses
There are broadly two types of marine losses.
Actual total loss:
It occurs when the subject matter is completely destroyed or goods are completely damaged and are beyond repair. The actual loss also occurs in case the insured is deprived of the subject matter.
Constructive total loss:
A Constructive total loss occurs when the ship is abandoned due to certain reasons and it is commercially not viable to retrieve the cargo or ship.
Particular average loss:
Partial loss caused to the subject matter insured by an insured peril is a particular average loss.
General average loss:
It is a loss arising due to voluntarily caused damage in order to avoid impending danger.
Marine insurance benefits businesses by providing comprehensive coverage against all these various kinds of marine losses.
How marine insurance offers protection to transported goods
Marine insurance is a customizable insurance product that provides comprehensive coverage to the businesses that avail of the policy. Specific marine insurance provides coverage to transported goods against various perils, which include:
- fire, explosion
- loss of cargo due to stranding or sinking
- overturning and derailment of land conveyance
- general average sacrifice
- natural calamities
- washing overboard
- total loss of cargo because of loading and unloading
- forwarding expenses, survey fees reconditioning costs, etc.
The specific marine insurance policy provides comprehensive coverage to the cargo during the specific journey.