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Marine insurance is the insurance of the cargo dispatched from the origin country to the destination country. Although the name suggests otherwise, marine insurance is applicable to all modes of transportation of goods. When the goods are sent by air, or by land their insurance is also known as marine cargo insurance. The term only implies the fact that goods intended for international trade were traditionally transported by sea.
What Marine Insurance doesn’t include:
- The insurance encompasses risks associated with the sea and the subject matter is the ship, freight, or cargo.
- It does not include any clause related to the moral responsibility of the cargo owner or the ship.
What is it includes:
Despite following laws and safety regulations, transporters cannot control natural occurrences that might disrupt the cargo or vessel. Weather hazards encounters with pirates, and cross border conflicts are very common in water transportation, and the damages associated with these situations can cause significant financial hardship for ship owners. This is where a marine insurance policy comes into the picture.
- It protects the interests of shipping corporations and transporters by providing them with insurance coverage required to defend against possible losses.
- Marine Insurance allows the transporters to choose coverage options that are specific to their trade. Coverage requirements differ, for shipping businesses to choose an insurance plan that is customized. Different policies are available to provide coverage according to the size of the ship and the routes taken.
- Freight Insurance
- Liability Insurance
- Hull Insurance
- Marine Cargo Insurance
Why is marine insurance required?
Natural Disasters – Piracy, plane crashes and cross-border shootouts pose a great threat when it comes to transportation. Therefore, in order to avoid any loss because of such events, in the interest of the corporations and the transporters, it is always better to have a back-up like marine insurance.
Customization – The insurance also allows a transporter to choose the insurance plan as per the size of his ship, and the routes that are taken by his ship to transport the cargo and many such trifling points which could go a great length in affecting the transporters majorly.
Pen Policy – The inland insurance policy covers cargo’s inland movement for a specified duration of time, which is generally one year. This policy is appropriate for companies that are involved in numerous transactions around the year due to its complete coverage.
Comprehensive Protection – The policy offers protection against various types of losses or damages like a total loss of goods, partial loss of goods, related expenses while still in transit, etc.
Mark up the Value – This policy allows a part of the profit to be included in the sum insured. It is known as a mark-up in the marine insurance industry.
If the goods are destroyed, damaged, or stolen, it becomes important to file a marine insurance claim immediately with the insurer. At this, the insurer takes all the efforts to ensure that things were conducted properly.
Points to know before getting Insurance
The carrier of the goods (the airline or the shipping company) bear the cost of damages and losses to the goods while onboard. However,
- The compensation is mostly on a ‘per package’ or ‘per consignment’ basis.
- The coverage provided may not be sufficient to cover the cost of the shipped goods.
- Exporters prefer to ship their products after getting them insured the same with an insurance company.
- The insurance is necessary to meet the contractual obligations of exports. They arrange contracts such as cost insurance and freight (CIF) or carriage and insurance paid (CIP).
- The exporter needs to take marine insurance to protect its buyer or their bank interest and honor the contractual obligation.
- In the case of Delivered Duty Unpaid (DDU) and Delivered Duty Paid (DDP) terms, the seller may not be obliged to insure the goods, although generally, they do.
Choose the right Marine Insuring Company:
Everybody wants their business to grow internationally. The doors to opportunity will open as soon as the international shipment of your product starts. But the hazards that your goods are prone to may intimidate you from reaching the heights of success in your business.
We at 7C logistics solutions LTD. Israeli Freight forwarding and customs broker agency are here to ensure your goods so that it is easy and can transform your business!
After all, it is all about shipping your cargo and products!