The risks associated with transporting goods via water, road, rail or air are significantly high. The perils that you can face during transportation of goods can range from bad weather to robbery, theft, pilferage, spoilage or even loss of goods.
Not only is it necessary for all those involved in transportation of goods to own a marine insurance policy, but it is also legally mandatory for commercial transport vessels to invest in marine insurance in India, according to the Marine Insurance Act of 1963.
Read on to find out more about the different marine insurance types with leading insurers like TATA AIG,, like marine cargo insurance, to be able to decide which policy will work best for your vessel.
Types of Marine Insurance on the Basis of Coverage
Marine Cargo Insurance
An important marine insurance type is marine cargo insurance, which can be described as a property insurance variety that provides coverage to the cargo owners in case of damage or loss of their cargo at the time of transit.
While this insurance policy comes with extensive coverage, it also includes limitations, such as cargo owners being unable to claim for their cargo loss because the cargo’s packaging was defective.
Freight Insurance
Among the different types of marine insurance is freight insurance, which covers the logistics provider or shipping company’s liability for the shipment’s loss or damage during transit due to events outside the company’s control.
Hull and Machinery Insurance
A ship’s watertight body part that safeguards the cargo within the ship from damage is known as a hull. This insurance policy provides coverage for the damage or loss to the ship’s body or any equipment or machinery used for the ship’s functioning.
Generally, this policy provides coverage for accidents because of collisions or damages due to explosions or earthquakes.
Liability Insurance
When it comes to liability insurance in marine insurance, the coverage is provided to the insured individual. Primarily, it provides coverage for the financial liability that arises due to injuries or damages caused to a third party, for example, personal injury or death of a third party travelling in the vessel. This policy type is usually purchased by the ship’s owner.
Types of Marine Insurance on the Basis of Contract Structure
Voyage Policy
As one of the types of maritime insurance, voyage policy applies only to a single consignment. Under this marine policy, the insurer provides coverage for the damages or loss caused to the cargo during a specific voyage. The policy expires once the ship reaches its destination port.
Floating Policy
Among the kinds of marine insurance policies, the floating policy or open policy is usually opted by large exporters. This policy type covers all shipments during a period agreed upon, generally a year. It is required of the exporter to declare details, including the goods that are shipped, the transportation modes used and the destinations on a regular basis.
Valued Policy
The insured property is provided with a specific value at the time of policy issuance before a claim is made in a valued policy in marine insurance. When the insured raises a claim, the specific amount set earlier is given, irrespective of the loss that the insured incurs.
Time Policy
In time policy in marine insurance, the insurance is fixed for an agreed-upon period, typically for a year. It can be extended beyond a year for a voyage to be completed.
Mixed Policy
This marine policy combines two policy types – the time policy and the voyage policy.
Blanket Policy
The term blanket policy in marine insurance refers to the type of insurance that provides coverage for all the shipments under one policy. The details of each consignment in this policy do not need to be specified. In this insurance policy, a fixed premium has to be paid based on the shipments’ estimated value.
Port Risk Policy
This is one of the types of marine insurance policies in India that protects the vessel when stationed in any port.
Single Vessel Policy
As the name states, this policy type provides coverage for one vessel.
Fleet Policy
This policy type provides coverage for a fleet of vessels under one policy.
Conclusion
It is clear from above that marine insurance is an efficient way to protect your investments and goods, whether you are an exporter, a ship owner or the owner of a shipping corporation. With this approach, not only can you safeguard your goods from various risks, but it also fosters a sense of confidence in terms of trade transactions made internationally.
