Marine and Transit Insurance Policy

There are several types of marine insurance policies that a business may need, here is a compact list outlining them.

• Hull Insurance : A specific type of marine insurance that offers coverage for any damage to a vehicle during transportation. Hull insurance offers complete protection against various types of damages such as goods damaged during an accident, any unforeseen emergencies or theft-related loss.

• Marine Cargo Insurance : When cargos are transported from the origin location to the destination, they may suffer damage owing to any natural or man-made calamities. Marine cargo insurance offers comprehensive protection against all such calamities.

There are several types of marine cargo insurance that a business can choose from:

• Marine single transit : Offers insurance for all goods in transit for a single consignment journey only

• Marine open policy : Offers comprehensive insurance for all goods in transit in all types of cargo shipments, irrespective of import or export consignments. This policy offers active insurance for one year, so businesses having a marine open policy do not need to purchase insurance for every single consignment.

  • Land marine insurance : Offers insurance coverage for all marine consignments within India only.

  • Import marine insurance : Offers insurance coverage for all marine consignments originating from a foreign nation with India as the destination nation.

  • Export marine insurance : Offers insurance coverage for all marine consignments originating from India with any foreign nation as the destination nation.

A marine insurance is a commercial agreement between the insurer who may be an exporting business or a trader, and the insurance provider. Because the insurance provider agrees to provide security against any damages for goods in consignment, some specific clauses exist to act as a guideline for the insurance policy.

These clauses specify the particulars of the coverage and also determine the inclusions and exclusions. Here are some vital marine insurance clauses one needs to be aware of:

• Institute Cargo Clause : Here are all the institute cargo clauses to note:

  • Institute Cargo Clause A This clause covers the majority of the risks, which makes this clause an expensive one. The only exclusions to this clause are damages caused by war, nuclear disasters, and inherent vice.

  • Institute Cargo Clause B In Clause B, the insured is offered insurance against damages for partial goods in transit.

  • Institute Cargo Clause C Clause C offers protection against limited risks, such as damage caused by collision, explosion or fire, general average, or average sacrifice.

• Warehouse to Warehouse Clause This Clause offers insurance against any damages when goods are being transferred from one source warehouse to the destination warehouse during docking or unloading at the port.

• Maritime Risks Clause Insurance against Act of God events such as earthquakes, storms, volcanic eruptions, major collisions, and more. The maritime clause also offers insurance against man-made calamities such as piracy, fire, and vandalism.

• Extraneous Coverage Clause Any damage to goods during unloading, loading in the ports, or warehouse is covered by this clause.

• Inchmaree Clause Another significant clause, this offers insurance against all damages done to cargo due to negligence of the ship captain or crew, any faults in deck, machinery, cargo handling, or mechanical defects.

• “At” and “From” Clause This clause specifies the point of insurance applied, from the point of onboarding cargo and the point of unloading it. This clause specifies the geographical points while dealing with the cargo.

• Change of Voyage Clause This clause offers high flexibility in case the destination of the cargo is changed during transit. This clause offers a great advantage in case of perilous weather conditions that may affect the destination of the ship.

• Strike Clause This clause offers insurance for goods damaged due to strikes or riots between ship crew or any feud onboard.

• Jettison Clause In case the ship may sink due to being overweight, the insured may have to throw away some cargo to avoid sinking. This clause offers comprehensive protection for those thrown away cargo and is an emergency clause.

With a marine insurance policy, the insurer takes the complete responsibility of the goods in transit and provides peace of mind to the insured parties and intermediaries.

The intermediaries have limited legal liability when handling the goods, whereas the exporter having the sole responsibility of the goods can buy a marine insurance policy with coverage for loss or damage of exported goods.

When the goods are in transit, the mode of transportation varying from airline to shipping will be responsible for any damages and losses to the goods. Although, the compensation is pre-decided based on the standard protocol of ‘per package’ or ‘per consignment’. The coverage offered by the carrier of goods may not be adequate to recover the damage. So, the exporters prefer shipping the products after buying marine transit insurance. When raising a claim for marine insurance, it is important the exporter implemented the following standard practices:

• The goods should be packed ensuring complete safety while loading and unloading.

• The packaging material should be strong to resist natural hazards to the fullest.

• The packing should consider rough handling of goods or possibility of theft.

Marine insurance policy is a critical requirement for several import or export trade proceedings and business strategies. Marine insurance coverage is important for the following reasons:

• Financial protection: Marine insurance provides financial protection for businesses, especially smaller companies in the event of any unprecedented event invoking damage to cargo, ships, terminals or any other transport vehicle.

• Managing relationships with clients or customers: Any mishap while the goods are in transit can cause a delay in delivery, thereby leading to customer dissatisfaction. The policy helps resolve these issues promptly and saves any reputational damage among the clients or customers.

• Risk mitigation: Marine transit insurance provides a safety net which gives business the required peace of mind for business recovery after any unexpected accident damages or losses the goods in transit. The policy thus helps mitigate the high-risk potential due to transit.

• Compliance with trade contracts: Several trade contracts mandate the importer, exporter, buyer or seller of goods to have a marine insurance policy with business-specific coverage limit to mutually benefit both the parties and protect their interests when the goods are shipped from source location to destination.

• Customer-centric policies: In partnership with insurance companies, Covrzy curates specific policies aligning with the personal requirements of the customers when shipping the goods via sea or waterways and other modes of transportation like railways, roadways and airways.

• Flexible plan: Marine and transit insurance can have insurers with the flexibility to pay the premium lumpsum at one time, or in quarterly format depending on the nature of the policy.

• Insured value options: The customers have the option to determine and agree on a fixed value of coverage for the goods in transit or get the actual value of the goods.

• Fast claims settlement: Covrzy offers 24*7 support for any queries related to claims processing and assists you at every step from initiating the claims, submitting any evidence or documents, updates on verification process and settlement of claims, ensuring quick settlement, speedy recovery and business continuity within the earliest possible time frame.

Marine and Transit insurance offers a compensatory amount when the goods get damaged or lost in transit from source location to destination. The marine insurance coverage includes:

• Natural Disasters: The policy provides protection to the cargo against losses or damage to the goods due to natural calamities like hurricanes, floods, earthquakes, and other such unexpected disasters during transit.

• Collision Between Vehicles: For any damages caused due to collision during transport, the policy provides the required compensation.

• Overturning or derailment of vehicle: Marine insurance covers losses if the transporting vehicle overturns or derails.

• Theft or Hijacking: Protects against loss due to theft, piracy, or hijacking of the cargo.

• Damage During Discharge of Consignment: Covers damage that occurs while unloading the goods.

• Water entering the transport vehicle: For any damages caused by entering of water within the storage premises through the river or lake is covered. But, marine transit insurance does not cover damage caused by rainwater.

• Shortage or Non-Delivery of Goods: Protects against situations where cargo is missing or not delivered.

• Intentional Acts: Loss or damage intentionally caused by the insured is not covered under marine insurance policy.

• Mis-handling of goods: The marine insurance policy does not offer compensation on mishandling of goods during loading and unloading, leading to deteriorating quality and further damage.

• Shortage or Non-Delivery of Goods: Losses due to simple non-delivery or shortage without evidence of an insured peril are not covered under the policy.

• Unsuitable packaging material and unfit container: The marine insurance policy will not provide any coverage for the loss or damages caused to the goods due to improper packaging material which cannot resist hazards or has negligible safety. Further, if the carrying container does not comply with safety parameters, transit insurance will not cover for the losses.

• Ordinary Wear and Tear: Damage that naturally occurs from normal use or handling is excluded.

• War: Any damage caused due to risk of war or attacks amid the war will not be a part of marine insurance coverage.

• Inherent Flaws of the Goods: Damage caused by a defect or weakness within the goods themselves is not covered.

With a customer-centric approach, Covrzy works to simplify business insurance and curate customized policies that align with the unique requirements of your business. Covrzy offers a streamlined claims process and guides you at every step from tailoring the policy coverage as per business requirements, initiating the claims process, documentation process, and receiving the policy benefits.

Covrzy’s Marine and Transit Insurance policy provides with:

• Comprehensive coverage with flexible options.

• Affordable policy premium with a competitive market price aligning with budget.

• Expert guidance at every step of the claims process.

• Fast settlement of claims to support quick recovery of damages or loss.

Marine insurance provides coverage for the loss or damage of goods in transit via different modes of transportation from waterways, air, rail or road. The coverage varies according to the policies and requirements of the customers from damage due to crash or collision, specific parts of the transportation vehicle, freight receivables, etc. while shipping the goods from source location to destination.