Marine insurance policy is considered one of the oldest forms of insurance, and even attributed as the foundation of all insurance policies. Also, these policies have a very fluid underwriting process, and most policies are open policies which can be molded as per the needs of the insured.
It is a comprehensive cover to protect the loss or damage to goods while being transported from road, rail, air, or sea. It includes separate cover for the loss or damage to the cargo, the ships, freight, and Inland transit.
Here are the 10 marine insurance facts that you need to be aware of:
1. Transporting Goods across the world is safer than ever (But accidents do Occur)
Transportation of goods used to be difficult earlier with lesser modes of transport available. Now, with a considerable increase in the transportation business and new sea routes being discovered; transferring raw materials and finished goods within and outside the nations has become quite easy and safe.But, the accidents and risks cannot be ruled out completely. Piracy of ships has been on the rise in recent years. Also, there is no guarantee whatsoever that there will be no accident of the carrier or theft of the goods.
Based on a study by Swiss Re, in the year 2015, there have been a total of 31 marine disaster events leading to the insured loss of approximately $1,679 million.
2. Worldwide Coverage
Certain insurance companies provide global marine insurance for all types of marine risks. These range from protecting the single vessels to complex multinational businesses. Suppose you own a company that manufactures an iPhone that has subsidiaries in other nations, you would need a global policy for the to and fro of the products.
3. A Marine Policy for Every Type of Goods Transport:
Marine insurance policyis applicable to all kinds of goods such as:
• Packed or general Cargo:
The packed cargo includesbreak bulk (goods in boxes, crates, drums and on pallets), neo bulk (lumber, paper, cars and trucks) and unitized cargo (packed in containers)
• Unpacked or bulk cargo:
Bulk cargo includes Liquid/Wet Bulk (petroleum, gasoline, LNG [Liquefied Natural Gas], liquid chemicals, Juice & Wine in tankers) and Dry Bulk (coal, grain, iron ore, bauxite & cement carried in bulk carrier.)
4. Marine Insurance also available for Cargo Ships
Marine Insurance is available for cargo ships in the form ofMarine Hull Insurance. It is aimed at protecting the ship, its machinery and equipment from unforeseen dangers. It applies to all kinds of vessels navigating in any permissible water body. The use of bigger vessels, such as the massive 18,000 TEU EEE offer economies of scale but enhance the risks of loss or damage also. So, with bigger boats and vessel being used, insurance for cargo ships is becoming more significant.
5. Insure Your Goods in Transit for Singleor Multiple Journeys
Marine insurance policies are available in different structures . Based on how frequently you need marine insurance you can select a structure. These range from Annual Turn over Policy (ATOP), Specific Voyage, Open Policy, and Annual Policy.
6. Marine Insurance Covers Cost of Emergency Storage
Emergency storage might be required in case there is an emergency like extreme weather conditions, riots or some natural disaster that prevents the cargo to reach its destination. The required expenses in such cases are also borne by marine policies if special covers are taken for it.
7. Cover for Goods Discharge at a Distress Port
Goods discharge is often interrupted due to problems like collapse of a section of a bridge to the port, overturning of the truck that was carrying the goods or any such accident. Marine insurance offers cover for such prevented goods discharge at the distress port in the form of inland transit insurance. In some cases, the resulting loss of profit due to delay in delivery is also covered under the policy.
8. Can also be bought by the financiers of the goods in transit
The financiers may include banks and financial institutions which may have financed the said voyage of the cargo in return for interest. But, if there is loss or damage due to unexpected mishaps, these financiers are in for huge losses for which they can be indemnified under the policy.
9. Can be Bought and Managed Online
Now-a-days, insurers provide insurance facilities online that saves your time and prevents paperwork. It also enables comparing the insurance policies offered by different insurers and choosing the best one according to one’s business requirements.
10. Carriers are not responsible for Damaged Goods
In most cases, the carriers do not know what or which type of cargo they are transporting. So, even though you may hold them responsible for any kind of damage to the goods, they are legally not liable to fulfill any such loss. Even if the carrier itself is held responsible for some part of the loss under the agreement of transport, that part will not be covered by the insurance. Instead, the insurer will proportionately reduce the supporting compensation for any admissible financial loss.
The Marine Insurance Policy has a vital place in the marine contracts and dealings due to their coverage and the increasing cost of the loss. Even though, marine transport has become safer than ever, losses have also become costlier. Also, marine policy is something that requires fast and hassle free processing.As per marine insurance brokers like SecureNow, financiers of the goods who need assurances and follow proper safety protocols could use it to protect themselves from losses. Typical corporate concerns include fast processing, flexible quotes and 24x7 support, and everything that ultimately helps a business’ bottom-line. Major players address these critical pointers prefer marine insurance consistently, such that it has turned into an industry practice.