What is marine Insurance & its types? Welfin | Best insurance advisor in Kolkata
What is marine Insurance & its types?
According to Marine Insurance Act, 1906:
“An agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against incidental to marine adventure. It may cover loss or damage to vessels, cargo or freight.”
Marine insurance covers ships, cargo, terminals, depots, and any other form of transit through which property is transferred, acquired, or retained between the points of origin and the final destination.
Ships, cargo vessels, terminals, and any other mode of transportation where products are transferred or purchased between several places of origin and final destination are covered by marine insurance.
By covering transportation-related damages, this trip coverage protects shipping companies and couriers from potentially costly losses when transferring products by sea. The phrase was coined when parties began shipping products by boat. Marine insurance, despite its name, covers all kinds of cargo shipping. One of the most important aspects of maritime insurance is that transporters can choose coverage options that are specific to their industry. Shipping companies can select a plan that is tailored to their needs based on the numerous coverage criteria. Depending on the size of the ship and the routes covered, several insurances are available.
But before we get to the marine Insurance & its types, let us first discuss its features, and the procedure:
Features of a Marine Insurance Policy
Ships, cargo, terminals, and any other form of transit through which property is moved, acquired, or kept between the points of origin and the final destination are covered by a maritime insurance policy. Cargo insurance is a sort of maritime insurance that protects property that is exposed to the elements on the coast and offshore. Container terminals, ports, oil platforms, pipelines, hulls, maritime casualty, and marine liability are just a few examples. Shipping insurance is utilized when things are shipped through mail or courier.
The Maritime Insurance Act of 1963 covers all types of insurance in a marine contract. Marine insurance coverage requirements are stringent. Insurance policies are legally binding contracts with certain stipulations. Claims may be rejected due to minor variances or infractions.
As a result, insurance policies must be followed at all times. When it comes to reimbursing claims, policy providers adhere to strict guidelines, and deviating from them could result in a loss of coverage for a costly claim. It’s critical to understand the features and criteria of your insurance to guarantee that you’re covered. The agreement and policy will be null and void unless there is an insurable interest. An insurable interest exists for anyone whose goods are being transported by sea and may be harmed.
The insurer approves the contract after carefully observing the contractual agreement and making a proposal for the guarantee. If the policy has not been published individually, it can be derived from a contract.
What is the procedure for obtaining maritime insurance?
Marine cargo insurance is a sort of property insurance that covers the transportation of goods. Property losses may occur as a result of certain perils linked with the sea, air, or inland river navigation. Weather, piracy, faulty cargo loading or unloading, and other causes can harm goods and modes of transportation, making marine cargo insurance essential. This insurance protects items from the seller’s warehouse to the buyer’s warehouse. Damages and losses to goods onboard may be covered by the carrier of the items, which could be an airline or a shipping business.
“Per box” or “per consignment” compensation is frequently negotiated. The coverage given is likely to be insufficient to cover the cost of the goods being carried. As a result, exporters prefer to send their goods only after they have been insured.
Now that we know the basics, let us get into marine Insurance & its types:
Types of Marine Insurances
Different kinds of marine insurance are as follows:
Hull Insurance
The cargo vessel is protected from damage and accidents under this coverage. The hull and torso of a vehicle, such as a ship, as well as the different things aboard, are covered by the policy.
Machinery Insurance
Machinery Breakdown Insurance covers covered machinery from physical loss or damage that occurs unexpectedly. This policy would cover factory production machinery, workshop machinery, generators, industrial lathes, drills, compressors, and other machinery.
P&I (Protection and Indemnity) Insurance
P&I insurance is designed to protect policyholders from personal injury, illness, and death claims brought by the crew, passengers, and other third parties. P&I insurance also covers liability claims arising from an accident, as well as the removal of the wreck.
Liability Insurance
Liability insurance is obtained to cover any liabilities that may occur as a result of a ship colliding or crashing.
Freight Demurrage and Defense Insurance (FD&D) Freight Demurrage and Defense Insurance (FD&D) is a type of legal fees insurance (FD&D). The insured member receives legal help and is reimbursed for legal costs up to USD 5 million in the case of a dispute arising from owning and operating a vessel that is not covered by other insurance.
Freight Insurance
Freight is the amount paid to the ship’s owner to transfer goods from one port to another. Payment for such freight can be made in one of two ways: in advance or when the ship has arrived at its destination safely.
Freight insurance is sold and provided to merchant vessel corporations. It indicates the risk of losing money in the form of freight if a ship collides and the cargo is lost.
Marine Cargo Insurance
Marine cargo insurance is often known as freight insurance. It safeguards your items from physical damage or loss when traveling by land, sea, or air. It also presents considerable opportunities and cost savings if correctly handled. The insurance company compensates the owner of the shipment that is destroyed.
Conclusion
Marine insurance is required for importers and exporters who deal in domestic and international goods transfers. Such insurance provides comprehensive risk coverage from the time the shipment leaves the seller’s warehouse until it reaches its destination, which is usually the buyer’s warehouse.
