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Marine Insurance

       

    Marine insurance provides protection against loss or damage while transferring property from one location to another. It includes coverage for ships, goods, terminals, and various transportation methods. Cargo insurance is a specific category within marine insurance that extends to onshore and offshore properties, such as container terminals, ports, oil platforms, and pipelines. It also covers hull, marine casualty, and marine liability. The insurance coverage applies throughout the entire journey, from the departure of the carrier to its arrival. Additionally, marine insurance extends beyond the sea, offering protection for loss or damage during transportation by rail, road, and air.

    What is the meaning of Marine Insurance?

    Many people think marine insurance is only for shipping things by sea. But it does more! Marine insurance also keeps your goods safe when they travel by train, truck, or plane.

    Characteristics of Marine Insurance

    Below are some characteristics of a marine cargo insurance policy:

    Adjustable Premiums

    Insurance companies might let you choose how you pay your premiums. You can pay yearly, every three months, or just in one go. This can be different for each insurance plan.

    Customer-Focused Policies

    Insurance companies provide plans made to meet the specific needs of people who are transporting things on the sea or through water.

    Choices for Insured Value

    Customers can choose how much their goods are insured for. It can be the real value or a value both parties agree on.

    Keep in mind that what insurance companies offer can be different. So, customers need to review their insurance policy and consult with the insurance advisor to know exactly what their marine insurance covers.

    What are the Types of Marine Insurance Policy?

    These are the various kinds of marine cargo insurance plans, made to fit specific needs. However, the details may vary from one insurance company to another.

    Types of Plans Under Marine Insurance Clause/Extent of Coverage Geographical Classification
    Single

    Annual open

    Stop

    		 *A: All Risk: All risks except rainwater damage.

    *B: Basic: Accidental Damage

    		 Inland: Transit within Indian border.

    Import: Transit from anywhere in the world to India.

    Export: Transit from India to anywhere in the world.
    Hull Coverage for the vessel only (Truck, Ship, Train, Airplane)

    Transit Insurance/Cargo Insurance

    Cargo insurance, also known as transit insurance, ensures that your goods are protected throughout their journey from the starting point to the final destination. Within cargo insurance, there are three distinct plans available. These plans offer flexibility, allowing you to choose coverage based on your specific needs, considering factors such as the number of transits and the type of protection required for your policy. In essence, cargo insurance provides a customizable solution to cater to your unique transportation requirements. They are as follows:

    Open Policy

    The Annual Open policy in marine insurance is a practical solution for businesses with consistent shipping needs. It provides continuous and comprehensive protection for cargo across multiple shipments throughout the year, offering convenience and cost-effectiveness. This contrasts with Single Transit Insurance, which applies entirely to a single journey. Businesses engaged in regular shipping can benefit from the flexibility and continuous coverage provided by the Annual Open policy over the specified one-year period.

    Specific Policy/Single Transit

    Single Transit Insurance in marine coverage is a type of coverage for your goods during a specific transit. This type of insurance steps in to ensure your cargo is protected as it travels from where it begins (the origin) to where it ends up (the destination). It covers your goods during this single transit or voyage, no matter if they're on a truck, train, ship, or plane. So, whether it's a land, sea, or air journey, Single Transit Insurance has your cargo protected for that particular trip, providing a tailored safety net for your shipping needs.

    Annual Sales Turn Over Policy (STOP)

    The Marine Sales Turnover Policy is like a safety net for companies involved in marine transportation. It covers the expected yearly sales in case anything goes wrong during operations, protecting the company from financial losses or damages. It's a way to keep the business financially secure while it does its marine transport work.

    Hull Insurance

    Hull insurance is like protection for ships, trucks, trains, or planes while they’re transporting. It provides coverage for fixing or replacing the carrier if something bad happens during transportation.

    Now, let’s talk about the different ways or types of transportation included in a marine insurance policy.

    Marine Insurance Clauses

    Marine insurance clauses fall into two categories. They are:

    Inland Transit Clauses (ITC)

    ITC stands for Inland Transit Clauses, specifically designed for inland transits within India. ITC-A provides coverage for all damages except those caused by rainwater, while ITC-B covers only accidental damages. This clause applies to inland transits.

    International Cargo Clauses (ICC)

    ICC stands for International Cargo Clauses, tailored for international cargo shipments exclusively. ICC-A offers coverage for all damages except those caused by rainwater, whereas ICC-B specifically covers accidental damages. This clause applies to both import and export operations.

    Marine insurance policies categorized by geography can be expressed as follows

    Whether it’s a single transit, annual open, or annual sales turnover policy, each marine cargo insurance policy comes with a geographical limit. These classifications refer to the specific locations of both the starting point and destination for the transportation covered by the marine insurance policy. They include:       

    Import

    A marine insurance policy extends coverage for imports from any part of the world to India, emphasizing transit modes mainly involving sea and air.

    Export

    A marine insurance policy provides coverage for exports from any place in India to destinations worldwide. This policy predominantly includes transit modes of sea and air.

    Inland

    An inland marine insurance policy offers coverage for the movement of goods within the borders of India, encompassing transportation from one location to another. This type of policy primarily addresses transportation conducted through road and rail.

    What's included and excluded in a Marine Insurance Policy?

    Here are what the Marine Insurance policy covers and does not cover:

    • Theft/Pilferage: The marine insurance policy covers losses or damages to goods/cargo resulting from theft.
    • Total Loss of any Package while Loading/Unloading: Marine cargo insurance offers protection against loss or damage to goods or cargo while being loaded or unloaded.
    • Malicious Damage: Marine insurance offers protection for the loss or damage to goods and cargo caused by deliberate actions of individuals other than the policyholder or their employees.
    • Collision of Goods Carrying Vessel: Marine cargo insurance offers protection against loss or damage resulting from the collision of two vessels.
    • Fire, Lightening and Explosion: Marine insurance offers crucial protection for unforeseen events during cargo voyages, encompassing situations such as fires, explosions, lightning, and more.
    • Collision, Overturning, or derailment of land transportation: Marine cargo insurance extends coverage to include expenses arising from collisions, overturning, or derailment of land transportation vehicles transporting the cargo. Compensation is granted to address the associated costs and damages resulting from such incidents.
    • The overturning of Goods Carrying Vehicle: Marine cargo insurance offers protection for the loss or damage incurred by goods/cargo due to the overturning or derailment of the vessel transporting them.
    • Breakage of Bridge: This policy offers protection for any loss or damage sustained by the goods or cargo in transit in the event of a bridge collapse while the vehicle is passing during transportation.
    • Earthquake or Volcanic Eruption: This policy ensures that any loss or damage to the goods or cargo resulting from an earthquake or volcanic eruption is covered during the transportation process.
    • Stranding, Grounding or Sinking: Marine cargo insurance offers protection for losses or damages incurred by goods in the event of a ship stranding, grounding, or sinking during transportation. Stranding and grounding occur when the vessel gets stuck at some point in between destinations.
    • Water Entering the Vessel during Transportation: The marine insurance policy offers protection against losses or damages resulting from the intrusion of sea, river, or lake water into the watercraft. It’s important to note that coverage is not extended to damages caused by rainwater.
    • Earthquake or Volcanic Eruption: This insurance policy protects against any loss or damage to goods or cargo resulting from an earthquake or volcanic eruption while in transit.
    • General Average Sacrifice Salvage Charges: In marine insurance policies, coverage encompasses general average sacrifice salvage charges. The general average arises in maritime emergencies when sacrifices are made to protect the collective interests of the vessel, cargo, and crew. The policy compensates for the costs associated with such sacrifices and salvage operations.
    • Protection against Natural Calamities: Marine insurance provides a safeguard for cargo against the repercussions of natural disasters like earthquakes or lightning strikes. This coverage guarantees that any losses resulting from these unexpected events are included in the policy.
    • Jettison: Additionally, the insurance policy extends coverage to instances of jettison, which involves intentionally discarding cargo overboard to mitigate further damage to the vessel or other goods.
    • Delivery of Goods or Cargo at Different Locations: The insurance policy offers protection for goods or cargo against covered perils during unloading at the nearest alternative location/port in cases of adverse weather conditions, other than the originally specified location/port. It’s essential to notify the insurer in such situations.
    • Contact of Goods Carrying Vehicle with Structure/Animal: The insurance policy includes coverage for losses or damages incurred by goods due to the vessel making contact with structures, animals, or other such entities.

    For a comprehensive understanding of the coverage, please consult the policy documents supplied by the insurer.
    **The All-risk insurance policy includes coverage for these perils. However, if you hold a basic or different policy, please reach out to your insurance provider to obtain detailed information on the specific coverage.

    • Unsuitable & Insufficient Packaging: The marine policy does not provide coverage for the loss or damage to the goods due to improper packaging.
    • Unfit Container: The insurance policy excludes coverage for any loss or damage to goods if the transporting container is deemed unsuitable for the safe conveyance of the goods.
    • Willful Misconduct: The marine cargo insurance policy excludes coverage for losses or damages to goods resulting from the deliberate actions of the policyholder.
    • Damage caused by inherent vice: This coverage refers to situations where goods, objects, or materials undergo self-destruction due to inherent characteristics. Such incidents are not included in the marine insurance policy coverage.
    • Mishandling of Goods in Transit: Coverage is not extended by the insurance plan for any loss or damage to goods resulting from mishandling during transit.
    • Cargo exceeding standard dimensions: Loss or damage to goods or cargo resulting from exceeding specified carrying capacity due to their oversize is not covered.
    • Bulk Cargo: Bulk cargo refers to the loss or damage of unpackaged liquid or dry substances during shipment, and it is not included in marine insurance coverage.
    • Weapon, Radioactive or Nuclear Fission: Coverage is not offered by the insurance plan for any loss or damage to goods or cargo resulting from radioactivity or nuclear fission during transportation.
    • Temperature Sensitive: The marine insurance policy excludes coverage for the loss or damage of temperature-sensitive goods.
    • Ordinary Wear & Tear: Coverage is not offered by the insurance plan for the loss or damage caused by the normal wear and tear of goods.
    • Delay: Loss or damage to goods or cargo resulting from delays is not covered by a marine insurance plan.

    For an understanding of the exclusions in detail, consult the policy documents supplied by the insurer.

    **It is important to understand these limitations, exclusions, and exceptions when evaluating marine insurance coverage. Carefully reviewing the policy terms and conditions is essential to ensure that the coverage aligns with the specific needs and requirements of the insured party. Exclusions may differ among different types of marine insurance policies.

    Marine Insurance Act 1963

    The Marine Insurance Act of 1963 is a set of rules in India that manages marine insurance. It gives instructions for marine insurance policies, protecting goods and vehicles during travel by rail, road, air, and sea.

    This law explains what insurance companies must do and how they figure out losses or damages that happen during transportation on the sea. Its main goal is to make sure things are fair and the same for everyone in the marine insurance business.

    Principles of Marine Insurance

    The rules of marine insurance are like important guidelines that show how marine insurance should work. They make sure that marine insurance policies are fair and effective for risks at sea. The main ideas of marine insurance include:

    Both the policyholder and the insurance company must tell the truth and share all the right details about the risk of being insured. This helps make a fair and valid agreement between them.

    Marine insurance is there to provide compensation to the person with the insurance if something bad happens to what’s covered. The goal is to help them get back the money they lost, not to make extra money from the situation.

    To get insurance, the person must have a legal and financial connection to the cargo or property being insured. If there’s no real connection, the insurance agreement won’t be valid.

    Once the insurance company pays the person with the insurance, they might take over that person’s right to take legal action against others who caused the problem. This helps the insurance company get back the money they paid for the claim.

    In case of multiple causes leading to a loss or damage, the proximate cause, that is the most dominant or direct cause, determines whether the claim is covered by the insurance policy.

    If a risk is covered by more than one insurance policy, the principle of contribution applies. Each insurance company shares the cost of the claim based on their policy limits and conditions.

    • Theft/Pilferage: The marine insurance policy covers losses or damages to goods/cargo resulting from theft.
    • Total Loss of any Package while Loading/Unloading: Marine cargo insurance offers protection against loss or damage to goods or cargo while being loaded or unloaded.
    • Malicious Damage: Marine insurance offers protection for the loss or damage to goods and cargo caused by deliberate actions of individuals other than the policyholder or their employees.
    • Collision of Goods Carrying Vessel: Marine cargo insurance offers protection against loss or damage resulting from the collision of two vessels.
    • Fire, Lightening and Explosion: Marine insurance offers crucial protection for unforeseen events during cargo voyages, encompassing situations such as fires, explosions, lightning, and more.
    • Collision, Overturning, or derailment of land transportation: Marine cargo insurance extends coverage to include expenses arising from collisions, overturning, or derailment of land transportation vehicles transporting the cargo. Compensation is granted to address the associated costs and damages resulting from such incidents.
    • The overturning of Goods Carrying Vehicle: Marine cargo insurance offers protection for the loss or damage incurred by goods/cargo due to the overturning or derailment of the vessel transporting them.
    • Breakage of Bridge: This policy offers protection for any loss or damage sustained by the goods or cargo in transit in the event of a bridge collapse while the vehicle is passing during transportation.
    • Earthquake or Volcanic Eruption: This policy ensures that any loss or damage to the goods or cargo resulting from an earthquake or volcanic eruption is covered during the transportation process.
    • Stranding, Grounding or Sinking: Marine cargo insurance offers protection for losses or damages incurred by goods in the event of a ship stranding, grounding, or sinking during transportation. Stranding and grounding occur when the vessel gets stuck at some point in between destinations.
    • Water Entering the Vessel during Transportation: The marine insurance policy offers protection against losses or damages resulting from the intrusion of sea, river, or lake water into the watercraft. It’s important to note that coverage is not extended to damages caused by rainwater.
    • Earthquake or Volcanic Eruption: This insurance policy protects against any loss or damage to goods or cargo resulting from an earthquake or volcanic eruption while in transit.
    • General Average Sacrifice Salvage Charges: In marine insurance policies, coverage encompasses general average sacrifice salvage charges. The general average arises in maritime emergencies when sacrifices are made to protect the collective interests of the vessel, cargo, and crew. The policy compensates for the costs associated with such sacrifices and salvage operations.
    • Protection against Natural Calamities: Marine insurance provides a safeguard for cargo against the repercussions of natural disasters like earthquakes or lightning strikes. This coverage guarantees that any losses resulting from these unexpected events are included in the policy.
    • Jettison: Additionally, the insurance policy extends coverage to instances of jettison, which involves intentionally discarding cargo overboard to mitigate further damage to the vessel or other goods.
    • Delivery of Goods or Cargo at Different Locations: The insurance policy offers protection for goods or cargo against covered perils during unloading at the nearest alternative location/port in cases of adverse weather conditions, other than the originally specified location/port. It’s essential to notify the insurer in such situations.
    • Contact of Goods Carrying Vehicle with Structure/Animal: The insurance policy includes coverage for losses or damages incurred by goods due to the vessel making contact with structures, animals, or other such entities.

    For a comprehensive understanding of the coverage, please consult the policy documents supplied by the insurer.
    **The All-risk insurance policy includes coverage for these perils. However, if you hold a basic or different policy, please reach out to your insurance provider to obtain detailed information on the specific coverage.

    • Unsuitable & Insufficient Packaging: The marine policy does not provide coverage for the loss or damage to the goods due to improper packaging.
    • Unfit Container: The insurance policy excludes coverage for any loss or damage to goods if the transporting container is deemed unsuitable for the safe conveyance of the goods.
    • Willful Misconduct: The marine cargo insurance policy excludes coverage for losses or damages to goods resulting from the deliberate actions of the policyholder.
    • Damage caused by inherent vice: This coverage refers to situations where goods, objects, or materials undergo self-destruction due to inherent characteristics. Such incidents are not included in the marine insurance policy coverage.
    • Mishandling of Goods in Transit: Coverage is not extended by the insurance plan for any loss or damage to goods resulting from mishandling during transit.
    • Cargo exceeding standard dimensions: Loss or damage to goods or cargo resulting from exceeding specified carrying capacity due to their oversize is not covered.
    • Bulk Cargo: Bulk cargo refers to the loss or damage of unpackaged liquid or dry substances during shipment, and it is not included in marine insurance coverage.
    • Weapon, Radioactive or Nuclear Fission: Coverage is not offered by the insurance plan for any loss or damage to goods or cargo resulting from radioactivity or nuclear fission during transportation.
    • Temperature Sensitive: The marine insurance policy excludes coverage for the loss or damage of temperature-sensitive goods.
    • Ordinary Wear & Tear: Coverage is not offered by the insurance plan for the loss or damage caused by the normal wear and tear of goods.
    • Delay: Loss or damage to goods or cargo resulting from delays is not covered by a marine insurance plan.

    For an understanding of the exclusions in detail, consult the policy documents supplied by the insurer.

    **It is important to understand these limitations, exclusions, and exceptions when evaluating marine insurance coverage. Carefully reviewing the policy terms and conditions is essential to ensure that the coverage aligns with the specific needs and requirements of the insured party. Exclusions may differ among different types of marine insurance policies.

    Preliminary Requirements for buying Marine Insurance from MyPolicyExpress

    These are the initial requirements you are required to provide to the sales personnel at MyPolicyExpress when acquiring a marine insurance policy. Typically, these requirements are applicable for a single transit within the borders of India.

    • Customer’s Name
    • Pickup and Delivery Location with Pin code
    • Copy of Bill or LR provided by the Transporter
    • PAN and Aadhar card for KYC
    • Sum insured value based on the estimated cost of goods

    In a policy covering a single transit, the customer has the option to acquire the policy prior to the commencement of transportation.

    The buying process can be finalized within an hour or so once the customer fulfills these requirements.

    Documentation Needed for Marine Insurance Claim

    After successfully filing the claim, the insurer will issue the URN/claim number, enabling document upload and verification of the insurance claim status.

    The following is the list of documents needed for the claims process:

    • Copy of billing landing
    • Copy of insurance policy documents
    • Surveyor report
    • Original invoice list with shipping specification
    • Copy of letter exchanged with carriers
    • Claim bill

    Process for Marine Insurance Claims

    To initiate a claim under marine insurance via MyPolicyExpress, follow the steps below:

    Transportation

    Commencement of transportation occurs following the inception of the policy. (Coverage is contingent upon the transportation taking place within the policy duration).

    Inform Insurer

    The insured is required to promptly notify the insurer/broker of the claim. The insurer will provide the claim reference number and, if applicable, details of the appointed surveyor; otherwise, they will furnish the Letter of Request (LOR) for the subsequent processing.

    Provide Necessary Documents

    At this point, the insured is required to submit the documents related to the claim in accordance with the provided Letter of Request (LOR).

    Documents Verification

    Post submission of claim documents, the surveyor/insurer will examine the documents and communicate the status or any pending issues, if applicable.

    After a thorough examination, if all the documents are in order, the insurer/surveyor will communicate the claim assessment. This evaluation will be grounded in the available documents and information provided, taking into account the terms and conditions stipulated in the policy.

    Claim Approval

    Upon receiving the assessment from the insurer/surveyor, the insured is required to provide their consent along with NEFT documents, and any additional documents requested by the insurer for payment processing.

    Claim Settled

    Upon the insurer transferring the claim payment through NEFT, the credited amount will be reflected in the insured's account within 3-4 working days.