Marine insurance is needed when the risks are associated with marine activities. These marine activities can include transportation by oceans and waterways or other means and mediums, building or maintaining water-going vessels, ships or submarines, etc.
Some of the major reasons which make the purchase of marine insurance necessary.
a. The occurrence of natural disasters
Natural disasters are beyond the control of human beings and can occur anytime. They can cause huge losses to those companies which do not have marine insurance. So it is necessary to have marine insurance to overcome the huge losses which might occur due to natural disasters.
b. Increase in the number of cargo thefts
There has been a huge increase in the number of occurrences of cargo thefts these days which is also causing huge economic losses as well. With marine insurance, you can easily be compensated for any losses or damages caused due to cargo thefts. Many insurance providers also offer add-ons for providing cover against man made disasters such as riots, thefts, and strikes.
c. Damage to cargo
Even in case your ship has all the safety facilities and measures, damage to cargo can still occur due to various reasons like overloading of the ship, inadequate ventilation, poor condition of the container, rain or flooding, etc. When the damage occurs, it can lead to financial losses and by having a marine insurance policy you can easily avoid these losses.
d. Loss of containers in the sea
There is a high probability of the loss of containers in the sea. With this loss of containers in the sea, you are going to incur financial losses and a marine insurance policy can help provide cover against these liabilities.
e. Legal necessity
Mostly, buying of marine insurance policy is a part of the shipper’s sale contract for the protection of your buyer’s interests. In case, there is an accident or loss you will incur financial losses and will also lose the trust which your buyer has on you.
f. Carriers do not provide full cover
Carriers cannot bear the entire responsibility of all losses which might be arising due to natural calamities or minimal average etc. Even if in those cases where carriers can be responsible a restriction is imposed on the liabilities incurred. It is necessary to have a separate marine insurance policy rather than completely depending on the carriers.
g. Better grip over policy terms
In case you are leaving the purchase of marine insurance policy to other parties then you might face the risk of being underinsured. Moreover, if you have a claim for which you would have to deal with a foreign insurance company in a foreign language then it can be a cumbersome procedure. So, it would be good to have your own independent marine insurance policy.
Additional Read: What is covered under Marine Cargo Insurance?
Hence, you will be always in a state of peace of mind if you are purchasing marine insurance for your business. Your business is a result of lots of efforts and hard work and you should ensure its protection by purchasing a marine insurance policy.