Please wait...

Marine Insurance

What is Marine Insurance?

It is usually misinterpreted that marine insurance would only cover the goods and products when they are on a vessel at sea.

Marine insurance insures the goods when they leave the warehouse of the seller until it reaches the warehouse of the buyer. Therefore, to minimise the risks associated with this transportation, marine insurance is introduced. In simpler words, the cover is mainly from a warehouse to warehouse.

Since ancient times, marine transport has always played an important role in international and despite new advancements this traditional method of transport has not declined. Just like any other transport, this method too comes with an array of risk ranging from bad weather to even accidents and to safe guards the ships against damage or loss but also the cargo inside.

Why marine insurance is important?

Just like any other insurance, a marine insurance protects you from any unforeseen events like accidents, damage or even loss of property. Be it an expensive ship or valuable cargo, a marine insurance will help you sail through without incurring any loss in the worst of situations and so is very important.

Essentially marine insurance has four different types which are:

  • Cargo Insurance: This marine insurance is restricted to protect a ship’s cargo and the ship voyager’s belongings.
  • Freight Insurance: Now, this marine insurance policy is for added security to the merchant vessel’s corporation covering loss of cargo.
  • Liability Insurance: This marine insurance is essentially to cover liability due to a ship crash, collision or an attack and creates a space where compensation can be demanded.
  • Hull Insurance: Last but not the least, this policy is to protect the ship or vessel from any unforeseen accident.


  • Just like any other insurance the right Marine Insurance plan will protect and provide coverage against a wide range of risks which one may encounter at sea.
  • The best aspect of most Marine Insurance providers is that you can claim assistance across the world and even claim settlement assistance.
  • Many marine insurance providers will customise your plan and option according to your requirement and budget to safeguard your interests.
  • In many cases, it has been seen that Marine Insurance policies give out an extension to offer protection against loss caused due to riots and such events.

Marine insurance claim process

Similar to the claim of any other insurance, marine insurance also runs in the same manner. Some of the necessary steps in the claim process are as follows:

  • The claimant must contact the representative who handles marine insurance claims and even visit the nearest branch of the insurance provider to inform in person about the request.
  • In case of goods being damages while on the ship/port, the claimant must get a port or ship survey conducted.
  • In the important step, the marine insurance user must then gather all the policy documents and certificates issued while signing the policy. The original copy of the invoice along with all the requested documents need to be submitted to settle and verify the claim.


Multi-modality in marine insurance states that it offers transport insurance in different forms of transport. Some of the multi-modality examples are mentioned below:

  1. When we talk about global trading, the consignment leaves a warehouse in the country destined for a warehouse in another country, then the usual mode of transport is deep sea
  2. Once the consignment reaches the dork then it is picked up in a truck.
  3. Transportation is also done by train or rail.

Therefore, in the transit the consignment gets stolen or damaged then the customer can claim the policy. Similar to other insurance policies, such as a car or home insurance, it does have a termination date. Usually, the marine insurance ends in 60days after the consignment arrives at the port of final destination. The buyer or importer is given around 60days to clear the consignment arrived at the port and arrange a mode of transport to reach the warehouse.

Although Air Freight insurance is very streamlined. Unlike Marine insurance which has only 60 days, it has 30 days and there is one cover for all sort of risks. Likewise, it has basic rules and regulations. Similar to marine insurance it is also warehouse to warehouse cover multi-modality.

How to choose the correct insurance cover?

Although, there are many forms of insurance available. It is sensible to ask for fully comprehensive, third party, insurance and premium paid. Like with marine/air insurance asking for a particular cover.

For sea freight, following are the types of insurance cover:

  • Institute cargo clause A
  • Institute cargo clause B
  • Institute cargo clause C (Minimum cover referred to in Incoterms 2010 CIF, CIP)

Clause A, B and C are divided into:

  • Risks Covered
  • Excursions
  • Duration

Clause A is considered as the best cover available because it includes mostly everything, all involved risks except those detailed under exclusions.

Although exclusions and durations clauses never change, they stand still for all three clauses A B C.

Following are the risks covered in clause B :

  • Fire or explosion
  • Vessel or craft being stranded grounded sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • Earthquake volcanic eruption or lightning
  • General average sacrifice
  • Jettison or washing overboard
  • Entry of sea lake or river water into vessel craft hold conveyance container or place of storage
  • Total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft

Following are the risks involved in clause C :

  • Fire or explosion
  • Vessel or craft being stranded grounded, sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • Loss or damage to the subject-matter insured caused by
  • General average sacrifice
  • Jettison

There are many marine insurance providers and to find the right one for you may seem overwhelming. But with the help of online aggregators and sites to compare different policies online the task is made easier. After filling in your requirements and budget, these sites should help you narrow down the options and choose the correct insurance cover for you!

What are the insurance premiums?

Many types of premium are available but depend on multiple factors. Some of the factors are associated with them are mentioned below:

  • Description of goods
  • Value of goods
  • Packing specifications and if cargo is containerised
  • Country and port of export
  • Country and port of import
  • Possible name of the shipping line

Combination of these factors determines the premium paid.

In layman’s terms, an insurance premium is basically the sum an individual pays for an insurance policy and every insurance premium is different. A combination of the following factors determines the base of your premium:

  • Value of goods
  • Packaging requirements
  • Country of export & import

How is cargo insured?

One of the most practical and interesting ways to insure the consignment, one of the most effective way is to contact a freight forwarder to insure the consignment on behalf of their clients. Many forwarders possess their own in house master policy.

Insurance certificate and examination

The freight forwarder will issue an insurance certificate. The clients must receive an insurance certificate as the buyer will have proof. The proof will help them insured cargo under CIF or CIP for accurate value and care.

Marine insurance policies

There are various other marine insurance plans available ranging right from time plan, voyage plan, mixed plan, port risk plan, valued planned, floating plan and wager plan. Each of these are issued for different requirements and cover different risks.

Features of marine insurance

While most insurances have some features in common, here are some of the basic features for marine insurance:

  • Contract of indemnity – This basically means that the insurance company is essentially liable to compensate only till the extent of actual loss suffered and in no other circumstance.
  • Principle of subrogation – Even after the insurance claim is settled, the insurer has the right to sue the involved third party for loss.
  • Comes with warranty – The Marine insurance policies is bound like a legal warranty between the insurance company and insured which is set to remain cancelled the moment there is a breach of warranty.

Coverage offered by marine insurance

Some common losses covered by marine insurance are:

  • Shipments export or import
  • Goods transported via rail, sea, post or road.
  • Goods which are transported by coastal vessels between different ports within a country.

What is not covered in marine insurance?

While there are many different situations and loses covered by marine insurance policies there are some exceptions which are:

  • Common leak or wear and tear
  • Incorrect goods being transported
  • Damage caused because of delays.
  • Damage caused intentionally to generate losses.
  • Damages due to a civil commotion, war, strikes, riots and similar situations.
  • Lastly, losses incurred from a financial situation like bankruptcy