Marine Insurance, as the name suggests, is the insurance policy opted by owners of marine vehicles, namely ships, boats, yachts, etc., who use it for commercial or transportation reasons. This insurance policy acts to secure your shipments against any unforeseen circumstances/accidents. The ocean has always proved to be a giant beyond any and all predictions or control. Hence, insuring one’s goods against any accidental damage is imperative for all users of commercial seaways. This article strives to throw some light on the types of Marine Insurance available in India.
Different Types of Marine Insurance
There are various types of Marine Insurance available to ship owners in India. The ship owners have to choose the right type of insurance that fits their profile and needs after carefully researching each type. This article aims to shed some light on the different available types of marine insurance policy and project a basic idea about each category.
Marine Cargo Insurance
This Insurance policy aims to protect the bearer against the losses incurred due to loss or damage to cargo during transit. It also covers third-party liabilities that occur as a result of damages levied against the port or the ship due to the cargo. It’s of great use for owners of Tankers and carriers of massive amounts of cargo. It provides protection for the cargo and the shipowner against any damage sustained during the journey due to untoward circumstances.
This variety of Insurance strives to protect the bearer against damages sustained by the ship, including the furniture and articles present on the ship. The importance of this insurance cannot be overstated, considering the cruel nature of the seas. Hence, this type of insurance must quite simply be chosen by the ship’s owner regardless of what other type of policy he opts for.
Damage Liability Insurance
This class of Marine Insurance works to protect the insured against damages sustained by their vessel due to circumstances beyond their control, like storms, tsunamis, conflicts, etc. It compensates the bearer for any huge loss/damage sustained during the sea voyage due to unforeseen occurrences.
Lost Freight Insurance
This type of policy aims to protect the shipping company. It comes into play when several consumers seek compensation due to the loss of cargo at sea. Hence, it is imperative for shipping companies to opt for this type of insurance.
Marine insurance can also be classified into various types based on its structure. Some of the varieties are
Open Marine Insurance Policy
This policy is defined over a given time period. Within the stipulated time period, the bearer is insured for all of his shipments.
Timed Marine Insurance Policy
As the name says, this type of marine insurance policy is valid for a fixed time window, usually lasting for a year.
Port-Risk Insurance Plan
This insurance policy aims to protect the bearer against the costs incurred due to damage to the port when the ship was stationed.
Voyage-Based Marine Insurance Plan
This plan is useful for those looking for short-term protection. This plan is valid only for a specific voyage. It protects the bearer against damages sustained on that certain voyage alone.
This type of insurance plan is loosely structured with regard to reimbursements. No compensation amount is agreed upon beforehand, and the insurance provider pays compensation that he deems fit for the damages incurred.
Floating Marine Insurance Plan
This is the plan of choice for regular users of the seaways for commercial purposes. In this plan, a stipulated cover is agreed upon beforehand, and the other particulars are discussed as and when necessary. It provides utmost protection while saving the bearer from unnecessary hassle. All owners of ports, ships, and shipping companies are advised to choose this variety of marine insurance.
Various Types of Marine Insurance Policies in India
Here are the various types of marine insurance policy in India:
It is one of the types of marine insurance policy which is valid only for a particular voyage.
Time policy is one of the kinds of marine insurance policies in India that refers to a marine insurance policy that is valid for a specific period of time, generally applicable for a year.
This type of marine insurance policy provides the benefit of both voyage and time.
Open (or) Unvalued Policy
It is one of the types of marine insurance policy, where the value of cargo and consignment is not mentioned in the policy beforehand. Therefore, the reimbursement is provided only after the cargo and consignment are lost.
This is one of the types of marine insurance policies in India which is basically the opposite of open marine policy. The value of cargo and consignment is mentioned in the policy beforehand,making clear value of the reimbursements in case of any losses.
Port Risk Policy
The post risk policy ensures the safety of ship while it is parked in a port.
In a wager policy, fixed terms for reimbursement are not mentioned. If the insurance company finds that damage worth the claim, only then the reimbursement is provided. Keep in mind that it is not a written policy and will not be valid in the court of law.
Floation policy is where only the claim amount is mentioned and all other information is omitted will the ship begins its journey. For people who go on frequent trips, this is the ideal marine insurance policy for them.
Read More: How Does a Marine Insurance Policy Work?
Single Vessel Policy
It is one of the types of insurance policy that is made for small shipowners who have only one ship or have one ship in different fleets.
In the case of fleet policy, several ships owned by a single entity are insured under the same policy.
This policy provides protection to the cargo owner against the loss or damage of cargo in all modes of transport.
Benefits Of Marine Insurance
Marine Insurance policies aim to provide complete and extensive coverage against all types of dangers a ship and its cargo might face at sea. The right kinds of policies even have the option of extending the coverage to certain factors with the right kinds of add-ons to cover unprecedented risks like wars, riots, etc.
The plans aren’t rigid. The flexibility of the various Marine Insurance plans available on the market allows the consumer to tailor it to meet their specific needs, thus allowing greater user satisfaction.
Transparent Settlement Process and Specialist Assistance
Marine Insurance policies are often transparent with regard to their functioning and thus eliminate any stress in matters regarding insurance claims. The policies are often available globally and, hence, easily accessible irrespective of geographic constraints.
Marine Insurance helps safeguard the owners of ships against the losses incurred by any untoward occurrences like capsizing, fires, accidents, navigation mishaps, theft, war, natural disasters, etc. Since ships usually carry massive amounts of cargo over long distances, it is imperative for the owners to get suitable Marine insurance to safeguard themselves against heavy losses.
The protection is offered to both the shipowner and the cargo in the form of financial reimbursement in case of any mishaps at sea. It also covers third-party liabilities from any accidents occurring in the loading, travel and unloading of the cargo. It acts as a shield for both the owner and the cargo against uncontrollable incidents.
Frequently Asked Questions (FAQs)
Here are the different types of marine insurance policy:
Open (or) Unvalued Policy
Port Risk Policy
Single Vessel Policy
Here are the four main kinds of marine insurance:
Marine Cargo Insurance.
The marine losses can be broadly split into two categories – Total and partial loss. Total loss refers to 100% or near100% loss. Partial loss refers to semi losses.
Here are some of the key elements of marines insurance:
Features of General Contract,
The doctrine of Indemnity
Assignment and nomination of the policy
Return of premium.
Marine liability insurance provides coverage for damages to a third party, while engaged in marine operations. This insurance is designed for organizations involved in maritime activities.
The process is fairly straightforward, provided you’ve chosen the right policy. The documents required are:
a. Claim bill
b. Damage certificate
c. KYC, Photographs
d. Letter of Subrogation
f. NEFT Mandate.
Yes! One of the most attractive features of Marine Insurance Policies is their global validity.
A variety of factors play a key role in deciding the premium for Marine Insurance Policies. Some of them are:
a. Type of vessel
b. Type of Insurance cover
c. Trading limits of the ship
d. Age of the ship
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