What is Marine Cargo Insurance?

Marine Cargo Insurance is a type of insurance that provides coverage against the losses or damages of cargo or goods during transportation between the points of origin to the final destination. Marine insurance policy provides coverage for all means of transportation example road, railway, air, sea, couriers and postal service.
Marine Cargo insurance primarily covers loss during transit caused due to fire, explosion, hijacks, accidents, collisions, and overturning. We offer specially curated plans for covering the risk of theft, malicious damage, shortage, and non-delivery of goods, damages during loading and unloading, and mishandling of goods/cargo. The insured can choose the coverage based on specific business requirements. The policy is available for a variety of cargo/goods if you are dealing in or manufacturing them.

Who needs Marine Insurance?

Having this policy is essential for businesses and individuals alike. Business shipments are usually high in value and any damage can directly impact business.
When it comes to an individual, relocation is regarded as one of the most stressful life events, be it for job change or marriage.
Whatever your reason may be for transporting your goods, our policy protects your goods against material damages. .

Why should you buy Marine Insurance?

As a businessperson your goods are of immense value to you. It’s your source of revenue. Insuring your goods against any untoward incident, while they are being transported, means securing your own future & business.
If you’re an individual and making a move due to personal or professional reasons, you’re likely to be worried about a lot of things already.
Your household items no doubt have memories attached to them and you have painstakingly collected each thing as you’ve moved ahead in life. Knowing that all your stuff is safe means you can breathe easy about this one thing at least.

What is covered in Marine Insurance?

All the modes of transportation namely, air, water, rail & road are covered under this policy. Goods being transported via courier services are also insured.
Your goods in transit will be protected against vehicle collision, overturning, derailment, or accidents happening anywhere from the source to destination. This coverage can also be extended to loss or damage of goods due to theft, strike, riots, terrorism, and other hostile acts by human by opting for appropriate coverage as per one’s needs.

FAQ

What are the types of Marine Cargo Insurance covers available?
Following types of cover are available:
For Import and Export Transits:
Institute Cargo Clause – A (All Risk
Institute Cargo Clause – B (Named Perils/ Basic Cover)
For Inland (Transit within India):
Inland Transit Clause – A (All Risk)
Inland Transit Clause – B (Named Perils/ Basic Cover)

What are INCO Terms?
They determine the point of change of responsibility between the buyer and seller. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer.

Some commonly used Inco Terms:
Ex Works (EXW): Seller has to place the goods at the disposal of the buyer. Carriage and Insurance are arranged by buyer.

Free On Board (FOB): Seller delivers when the goods pass the ship’s rail at the named port of shipment. This means the buyer has to bear all costs &risks to the goods from that point.

Cost, Insurance, Freight (CIF): The seller delivers when the goods pass the ship’s rail in the port of shipment. The seller must pay the cost & freight necessary to bring goods to the named port of destination, but the risk is transferred from seller to buyer.

Other INCO Terms used in the market :
Rules for Any Mode (or modes) of Transport
CIP – Carriage and Insurance Paid
CPT – Carriage Paid To
DAP – Delivered At Place
DAT – Delivered At Terminal
DDP – Delivered Duty Paid
EXW – Ex Works
FCA – Free Carrier

Rules for Sea and Inland Waterway Transport Only
CFR – Cost and Freight
CIF – Cost, Insurance and Freight
FAS – Free Alongside Ship
FOB – Free On Board

What are the Risks Specifically Excluded from Marine Insurance?
● Wilful Misconduct of the Assured
● Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject-matter insured
● Insufficiency or unsuitability of packing
● Inherent vice or nature of the subject-matter insured
● Delay
● Insolvency or financial default of owner, manager, charters or operators of the vessel
● Unfitness/ Unseaworthiness of carrying conveyance

What are Common Warranties, Conditions and Exclusions*?
Below are some general conditions or warranties attached to a marine insurance policy:
● Rusting, oxidation, discoloration and corrosion are excluded unless caused by ICC(B) perils
● Institute Replacement clause
● Pair and set clause
● Second hand Replacement clause
● Excluding Mechanical, Electrical and Electronic derangement unless caused by ICC (B)/ITC (B) perils.
● Over Dimensional Cargo Survey Warranty.
● Warranted that losses due to adulteration, contamination and deterioration of quality is excluded.
● Warranted that goods are transported in closed wagons and/or trucks to be covered with tarpaulin or any other water proof material to avoid ingress of water.

What is Marine Cargo/Transit insurance?
Marine Cargo insurance / Transit Insurance covers the loss or damage of cargo / goods in ordinary course of transit between the points of origin and the final destination.

Marine insurance covers Movement of goods from one place to another:
Within the country(Inland)
From India to Country outside India(Export)
From Country outside India to India(Import)

Who can buy Marine/Transit Cargo Insurance?
Any person with insurable interest in the goods in transit can insure. Further the policy can be assigned freely to any person who acquires insurable interest during transit of the cargo.

Exporters
Importers
Manufacturers
Traders
Merchant Exporters
Contractors of Projects
Logistics Operators
C&F Agents

What are the Types of Cargo that can be covered in Marine Cargo Insurance?
The types of cargo / Commodities* are:
● General Cargo: Ex. Furniture, Spare Parts, footwear, Electronic items, food items, textiles etc.
● Metals: Plastic, Iron and Steel Rolls, Leather
● Machinery: Ex. Standard size in Containers. Oversize in Bulk or Open Top containers
● Liquid Bulk Cargo: Ex. Crude Oil, Edible Oil, etc.
● Dry Bulk Cargo : Ex. Coal, grain, ore and other similar products in loose form
*Above commodities / Cargo can be covered depending on the risk involved in it.

What is per sending Limit?
Per Sending limit represents the maximum sum insured amount that in the event of a claim of any one consignment or shipment whilst the goods are in ordinary course of transit.

What is Sum Insured?
Sum insured is the total value of the goods in transit including freight, taxes and any other port handling charges. This is the maximum amount which is payable in the event of a total loss of the insured cargo.

The sum insured will comprise of the following:
Cost of the goods either on (CIF)/FOB/C & F (Depending on the INCO term)
Clearing charges and internal freight
Customs Duty

What does Perils of the Sea means?
Perils of the seas” means fortuitous accidents or casualties of the seas, but does not include ordinary action of the wind and waves.

What are the types of Marine/ Transit cargo Policies?

Marine Single Transit Policy

● Covers single consignment from one location/port to another location/port
● It is suitable for those firms who seldom require marine cargo policies in the course of their trade

Marine Open Declaration Policy: (MOP)

● MOP is an annual arrangement between the insured and the insurer to provide coverage to all the shipments/transits on pre-arranged terms and conditions for a particular leg (Domestic/Import/Export).

Open inland policy

● Open inland policy is a declaration based policy where insured has to make periodic declaration (Monthly) of sum insured utilization.
● Certificates are issued for individual transits and are treated as sum insured utilization for open import/export policy.
● Insurer’s maximum liability is restricted to a pre agreed limit per sending and limit per location.
● Policy period of one year at an initial Sum Insured which can be enhanced during the duration of the policy.

Sales Turnover Policy:

● It’s a wider form of Marine Open Policy and is issued on the basis of annual sales turnover – both domestic and exports, all transits/voyages deemed to be held covered without specific declaration. (Import, Export or Inland)
● Sum Insured and premium is based on the estimated annual Sales Turnover of goods movement under various legs of transit.
● Certificates are issued for individual transits.

What information does the Insurer need to provide quotation?
● Basic Client Information
● Type of Cover (All risk (A) or basic coverage (B))
● Policy Duration
● Nature of Commodity and its description
● Value of cargo (Sum Insured)
● Custom Duty (In case of Import)
● Packing Description
● Mode of Conveyance (Sea, Air, Rail, Road or Courier)
● Claim Experience
● Basis of Valuation
● Per Sending and Per Location Limit

Explanations mentioned in “What’s Covered & What’s Not Covered?” are illustrative and will be subject to terms, conditions and exclusions of the Policy. Please refer to the Policy Document for more details