Even though the air, road, and rail transports have advanced significantly these days, but the sea is still the most preferred mode of trade-related transport. In modern days, the international trade is largely dependent on ships. As we all know sea routes are more exposed to the risks than rail, road, and air. Risks like collision, bad weather, etc. are very common with ships. All these hazards have given a rise to the requirement for the marine insurance.
Marine insurance is a type of insurance that not only covers the ships against damage or loss, but also the cargo contained and being transported in it.
What is Marine Insurance?
Marine insurance offers coverage in case of damage or loss of cargo, ships, terminals, and any transport by which any property is acquired, transferred or held between the point of origin and its destination.
Cargo insurance is the sub-category of marine insurance. Under Marine insurance coverage, the property exposed either onshore and/or offshore, marine casualty, marine liability, and hull damages are secured.
In case goods are transported using a courier service, shipping insurance can be purchased.
Why Marine Insurance is Important?
Like any other insurance, marine insurance policies provide coverage for unfortunate events such as accidents, property damage, and damage to the environment. While we talk about ships, the stakes are high as the loss is related to the damage in expensive ships and valuable cargos. Additionally, the environmental damage is also high due to oil pollution which consequently results in the loss of the lives of seafarers. Some advantages of having marine insurance in India are:
- Comprehensive Coverage against All Risks Related to Marine: A marine insurance policy offers comprehensive coverage against all potential risks related to marine accidents.
- The flexibility of Coverage: Most of the marine insurance plans are flexible enough to fulfil the various needs of the insured.
- Claim Survey and Settlement Assistance across the Globe: An insured also gets the benefit of a worldwide claim survey and claim settlement.
- Option to Extend the Coverage for Riots, Strikes, and Perils: One can extend the coverage of the marine insurance plan against perils, strikes, and riots as well.
- Customization Option to Fulfill the Requirements of the Insured: One can always customize the marine insurance policy to meet his/her expectations.
Marine Insurance Plans/Types of Marine Insurance
The different types of marine insurance plans available are:
- Cargo Insurance: This type of marine insurance policy particularly carter to ship’s cargo. However, it also covers the belongings of the ship voyager.
- Liability Insurance: As the name of this policy suggests, the liability insurance provides compensation when the liability is sought due to ship crash, attack or ship collision.
- Hull Insurance: To ensure the torso and hull of the vessel including the furniture and articles of the ship. This insurance policy is purchased by the owners of the ship to safeguard it against any unfortunate situation or accident.
- Freight Insurance: It is to provide an extra layer of safety to the merchant vessel’s corporations for the situations of cargo loss due to an unfortunate event. This type of marine insurance is required by the companies that are facing monetary losses because of accidents and other unprecedented situations.
Apart from these, there are various other marine insurance plans available, some of which are:
- Time Plan: A marine insurance plan that is issued for a particular period of time is known as time policy. Most of the times, this policy is valid for a specific period of time such as for one year.
- Voyage Plan: This plan is for those who want to ensure a particular sea voyage. The plan expires as soon as the journey overs.
- Mixed Plan: A marine insurance policy that provides the benefits of voyage plan and time plan both is known as mixed plan.
- Port Risk Plan: To ensure the safety and security of the ship while it is stationed at port, this plan is used.
- Valued Plan: Under this plan, the value of the cargo or consignment is evaluated and mentioned in the insurance document beforehand. It is done to specify the insurance value in advance if the loss of consignment or cargo occurs.
- Floating Plan: The floating plan is one wherein only the amount of the claim is defined in advance and other details are not disclosed until the ship goes on a voyage. This plan is recommended to the clients who undertake frequent cargo transportation trips.
- Wager Plan: This plan does not have any predefined fixed reimbursement terms, however, if the insurer finds any loss or damage worthy of claims, then reimbursement is given. If the damages are not worth considering, then there will not be any compensation. It must be noted here that a wager plan is not a written insurance policy and hence it is not valid in the court.