Touch Stay Clause in Marine Insurance

Marine insurance is the best way to protect yourself against unforeseen events related to marine transport. It’s a type of business insurance in India that acts as a safety net for shipowners, freight forwarders, importers, exporters, and many other individuals involved in marine transportation activities.

Usually, a marine insurance policy covers marine cargo insurance, hull insurance, freight insurance, and liability insurance (which helps in settling legal liabilities caused due to loss of lives or harm to third parties).

By providing financial protection in case of loss or damage, the insurance company saves the insured from the unnecessary financial burden of repairing, replacing, and recovering damaged or destroyed property.

Here are a few examples/events which are generally covered under a marine policy:

• Fire and explosion

• Theft

• Natural disasters, like earthquakes, typhoons, storms, lightning etc.

• Sinking of ship

• Collision and derailment

• Overturning of ship

The touch and stay clause in marine insurance specifies the list of ports at which a vessel or ship can stop during the voyage.

For this reason, the port of departure and the destination need to be mentioned when buying a marine insurance policy.

The ship must only follow the decided route. If the ship deviates from the predetermined route, the ship owner will not be entitled to compensation if anything unfortunate happens.

However, there are some exceptions, such as:

• If the ship has to deviate from the route stated in the policy for valid reasons, like to ensure the safety of passengers, crew members and the ship, then the insurer may allow the insured to change the specified ports and settle claims.

• It is important to note that an insurer will permit this change only if the policyholder presents valid reasons for not following the route stated in the insurance policy.

There are several other clauses present in marine insurance, with which you should comply for smooth settlement of claims. These are:

“At” and “From” Clause

This clause defines the point of time at which the insurance starts and the point at which it ends. Generally, the insurance commences after the loading of cargo and ends after the unloading of cargo at the destination port.

Sue and Labor Clause

The sue and labour clause states that expenses incurred for taking precautionary steps to save the hull and cargo from possible damage and losses during the journey will be covered by the insurance company to a reasonable level.

Change of Voyage Clause

This clause is closely related to the touch and stay clause as, in some cases, the insurer permits a change in route, but it should be within the specified limits.

In case a ship changes its route willingly in between and gets back to the specified route safe and sound, it will be considered as a deviation, but it will not invalidate the policy. However, this entirely depends on the insurer and the details of the change of voyage clause.

Jettison Clause

Some marine insurance policies include the jettison clause, which permits the ship owner to throw off certain cargo off the ship to decrease the load on the ship during an emergency.

Sea shipments are usually safe and secure, but unexpected events occur and things can go wrong during the transportation of goods through sea. It offers financial coverage for possible losses associated with marine transport.

Here are some key reasons why a marine insurance policy is extremely important for any vessel owner:

Adhere to Regulations – It is compulsory to have marine cargo insurance when going on a voyage.

Peace of Mind – Marine insurance provides the insured with financial support in case the ship gets into an accident and results in huge losses. This gives the policyholder a sense of relaxation.

Liability Protection – This type of insurance also offers protection against the legal liabilities that arise from accidents that can affect third parties and crew members.

The touch and stay clause in marine insurance ensures that ships stick to specific routes and ports during their journey to decrease the amount of uncertainty and risks associated with sea travel. Any deviation, unless absolutely necessary, can nullify coverage.

It is necessary to be aware of the clauses present in your marine cargo insurance policy to mitigate any potential misunderstandings during claim settlements.

Moreover, with an increasing number of cargo thefts and incomplete coverage offered by carriers and freight forwarders, it has become essential to insure valuable assets and cargo with marine cargo insurance from reliable insurers like Tata AIG.

What is the scope of marine insurance?

Marine insurance is a tool which helps cover the expenses incurred for repairing the vessel and recovering the damage caused to cargo in transit.

Besides, some types of marine insurance policies also cover third-party liabilities such as coverage for injuries and loss of life of passengers present on the ship.

What are the three types of marine insurance?

The three types of marine insurance are cargo insurance, hull or vessel insurance, and freight insurance. Each of these policies has its own coverages and exclusions which you should take into account when buying a marine insurance policy.

What is the main clause of marine insurance?

Marine Insurance policies have about 12 main clauses that policyholders must adhere to. The touch stay marine insurance clause happens to be one of them. This clause specifies the ports at which the insured vessel can stop at during its journey.