Guide To Marine Insurance
2022-03-21 18:25:26Marine insurance refers to a contract that provides security to your goods while transportation. It is an assurance that your shipment dispatched from the initial point to the final destination is covered by insurance. Having this insurance will cover all your loss along with the damage caused to the means of transport like ships, cargo, terminals, etc from the place of origin to the final destination. The term marine insurance originated when people started to transport their goods and various things through sea routes. In spite of its name marine insurance is applicable for all means of transportation, where goods are dispatched from one location to its desired destination. For instance: if your goods are shipped by air then it is termed as marine cargo insurance.
Quick Links
- What Is The Importance Of Marine Insurance
- Where To Get Marine Insurance?
- Marine Insurance Act 1963
- Principles Of Marine Insurance
What Is The Importance Of Marine Insurance
For any kind of import and export trade, there is an important role played by marine insurance. In case of any damages of goods under insurance, both parties are liable for the payment if they agree upon the terms and conditions. With marine insurance, the subject matter goes beyond the contractual obligations. Before the dispatch of any cargo, you must buy a policy as there are various arguments that can prove the importance of marine insurance. After purchasing your marine insurance you must check out that your goods are insured by any of these three parties:
- The Exporter
- The Importer
- The Forwarding Agent
Where To Get Marine Insurance?
In India, the process of purchasing marine insurance is very easy. Due to the country's geographical location, several banks, as well as financial institutions, are the places that offer many types of marine insurance.
Some of them are listed below:
- HDFC Ergo.
- TATA AIG
- United India Insurance Company.
- Royal Sundaram.
- New India Assurance Company Limited.
- Bharti AXA
Marine Insurance Act 1963
The Marine Insurance Act was enacted in India, in 1963. According to Section -3 of the marine insurance act, the term 'marine insurance' is used whenever goods are insured due to loss or damage where the insurer will be liable to bear the charges. The certainty of goods in case of unwanted circumstances during any trade proceedings will be considered by the insurer.
Principles Of Marine Insurance
1. Principle of faith
This principle demands the ultimate trust between both the parties; the guaranteed and the insurer. Without good faith, no institution can succeed or perform well.
2. Principle of Proximate Cause
One of the key principles of marine insurance. It deals with different concerns for which there could be loss or damage to a shipment. On the other hand, you should always remember that it is termed as the nearest cause rather than a remote cause.
3. Principle of Insurable Interest
Both the assured which covers the insurance of goods along with the object which having marine risk must have legal relevance. The insurance of goods is respectfully assigned through inconveniences to each party.
4. Principle of Indemnity
It states that the insurer will pay an amount that is sufficient to recover the loss. The proposer will not get any extra revenue for his damaged products. Any party who takes insurance to earn profit must remember that the company is not going to pay any profit amount for their loss. Covers are paid according to the actual loss.
5. Principle of Contribution
In some cases, the risk coverage of a single product has multiple insurers. During any kind of loss or damage, the cover amount is fairly distributed between the respective insurers.
Features Of Marine Insurance
- Acceptance of the offer
- Coverage
- Payment of premium
- Insurable interest
- Contract of indemnity
- Claiming process
- Flexibility
Calculate Marine Insurance Premium
First, add the shipment value and the cost of the flight. Then sum the amount with 10% of the total cost. Multiply the result with the coated premium then you will get the final product which is the amount payable to your premium.
Types Of Marine Insurance
The following illnesses are generally covered by critical illness insurance plans:
1. Flight insurance
If you have freight insurance then the insurance will be given on compensation for loss of freight of damaged goods.
2. Liability Insurance
It is the compensation amount that is provided to the proposer in case of any liability occurred to a ship. It may be crashing.
3. Hull Insurance
It is the insurance done for the protection of the vehicle. It covers your losses when your Hull or torso gets damaged due to an accident.
4. Marine Cargo Insurance
Marine cargo insurance is the policy that you can buy to ensure your goods if you are transporting them from one country to another.
Please note that this list is not exhaustive and is only indicative. Different critical illness insurance policies cover different critical illnesses.
Types Of Marine Insurance Policies
- Floating policy
- Voyage policy
- Time policy
- Single vessel policy
- Blanket policy
- Fleet policy
- Port policy
- Named policy
- Maxed policy
Several Clauses Covered By Marine Insurance Policy
If you are planning to buy a marine insurance policy but still confused about the coverages? Here it is you can understand it by going through several risks which are handled by your insurance policy loaded by three marine insurance clauses :
Coverage Under Marine Insurance Policy
1. Clause A: Minimum Coverage
It covers all your losses that occur due to breakage, chipping, denting, bruising, theft, non-delivery, and all types of water damage(clause a cover clause B and clause C)
2. Clause B: Additional Coverage
It covers the shipment against different natural calamities like earthquake, volcanic eruption, damage due to rainwater(flood), seawater, river water(clause B also cover clause C)
3. Clause C: Basic Coverage
It covers your shipment against events like fire, discharge of cargo in case of distress, explosion, accidents like sinking, capsizing, derailment, collision, etc.
The claim team would verify the details once they received the above documents. Once your claim has been verified, it will be approved or denied. If your claim is approved or denied, you will be notified.
What Is Not Covered In Marine Insurance
- Delivery issue
- Bad quality goods
- Personal insolvency
- Renovation and repairs
- International loss
- Wars and Situation
Difference between Fire Insurance & Marine Insurance
If you have fire insurance then it will cover the risk of fire. The subject matter in this policy is any of your physical assets or property. Here your moral responsibility plays an important role. In terms of fire insurance, you can't expect a profit margin from your damaged assets or property because you have to present the insurable interest before buying a policy and at the time of any fire incident.
However, your marine insurance policy encompasses different types of risks associated with the ocean. The ship, freight, or cargo are the major subject matter. Any kind of moral responsibility clauses of the cargo or the shipowner is not included. In terms of your marine insurance, you can expect a profit amount of up to 10 -15%.
Final Words
If you are planning to buy marine insurance then you must go through different features provided by the insurer. It will help you to get a policy that is best according to your needs and demands.
Also Read - The Important Factors To Know About Marine Insurance
