Home Business What is Marine Cargo Insurance & How Does it Work?

What is Marine Cargo Insurance & How Does it Work?

Marine Cargo Insurance

The global business revolution has died out many national boundaries for business organisations. With a positive impact on the business serving the entire world as one big marketplace, it has also increased the risks associated with it. This is especially true in case of organisations dealing in goods. It has created the need for commercial insurance covers to create a safeguard such shipments. A marine insurance plan is one such example that can be used by organisations.

What is marine insurance? Goods are prone to damages, especially during transit. A marine insurance policy is the one that protects your organisation against damages to these goods during such transportation. It covers all the damages right from your manufacturing facility to its delivery location. These losses are not limited to transportation by sea, but also cover air and inland waterways. During an international shipment, perils like weather conditions, piracy, loading and unloading can damage the goods. With a marine cargo insurance specifically designed to protect such shipment helps to avoid financial risk associated with such transportation.

What are the benefits of a marine cargo insurance cover?

A marine cargo insurance is a subdivision of marine insurance policy that specifically deals with cargo shipments. Here are some of its major benefits –

  • A marine cargo insurance offers comprehensive coverage for various perils like rejection by customs authorities, damages due to improper packaging, infestation for perishable goods, and more.
  • Based on the type of goods sent, a flexible coverage is available considering your business requirement.
  • Most insurance plans help regarding settlement of claims along with the facility for worldwide survey.
  • This coverage can be enhanced to include other unplanned perils like strikes, riots and the like.

Above mentioned details may vary based on terms and conditions for the policy.

What are the different types of marine cargo policies?

The different types of marine insurance are described below:

  1. Specific cargo policy:As the title suggests, this policy ensures safeguards against specific perils to the cargo transported.
  1. Open policy: An open policy is that which provides coverage for all the cargos transported within a definite policy period. In some cases, this policy does not have a definite limit, but remains valid till cancelled either by you or the insurance company.
  2. Open cargo:This type of policy covers all cargos within a duration of 12 months. It can be either inbound shipments or outbound exports.

What are the coverages offered under marine cargo insurance?

Here are the four types of covers available under a marine cargo insurance policy.

Institute Cargo Clause (C): Institute Cargo Clause (C) or ICC C is the most restrictive clause providing limited coverage only for specific evets like fires or explosions, derailment or toppling of land transportations and collisions of the ship.

Institute Cargo Clause (B): The ICC B clause is on the lines of ICC C but offering more coverage for natural calamities like earthquakes, lightning, and other natural perils. Also, this clause covers the losses to the shipment that may occur during the loading and unloading process and protects the cargo for any water damage impacting the vessel.

Institute Cargo Clause (A): With an extensive coverage, Institute Cargo Clause (A) is the cover that provides for all other unnamed perils. Since it has the widest scope of cover, its premium is also slightly on the higher side.

While no business is limited to geographic boundaries, you can ensure protection against the various risks associated in transportation with a marine cargo insurance policy. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.