Marine Insurance

Businesses involved in the transportation of goods can purchase a marine insurance policy. It can be purchased by import or export merchants, buyers, sellers, banks, manufacturers, contractors, ship owners, freight forwarders, port authorities, charterers, etc.
Here are a few important aspects to consider.

a. Ownership: You need to establish proof of ownership or responsibility in the business involving the transportation of goods.

b. Understanding Incoterms: Understanding Incoterms such as CIF, FOB, and DDP helps determine who is responsible for insuring goods during transit.

c. Type of Goods: The goods being shipped and transported should be legally permissible. There must be a record of the registration.

d. Type and Purpose of Transportation: The mode of transportation and the purpose need to comply with the marine insurance policy conditions.

e. Registration of Vessel: The vessel that is being used needs to be registered for the transportation of goods.

f. Legal Compliance: The transportation of goods should comply with the applicable domestic and international shipping regulations.

g. Safety Standards: The stakeholders need to establish the necessary safety standards.

h. Documentation: All the necessary supporting documents, including invoices, bills of lading, etc., need to be gathered with proper authorisation.

Inland marine insurance covers property in transit over land, while ocean marine insurance covers property transported over water. Inland marine insurance policies may cover goods in transit by truck, rail, or air, while ocean marine insurance policies are typically used for cargo being transported by ship or boat.

"Perils of the sea" is a term used in marine insurance policies to refer to risks specific to marine transport, such as storms, sinking, and piracy. The definition of "perils of the sea" can vary depending on the specific policy and jurisdiction it is issued.

Marine insurance can cover a wide range of vessels, including cargo ships, tankers, tugboats, yachts, and pleasure craft. The type of coverage and amount of coverage can vary depending on the specific vessel and its intended use.

The cost of marine insurance is determined by various factors, including the value and type of goods being transported, the distance and route of transport, and the history and experience of the insured party. Other factors that can impact the cost of marine insurance include the age and condition of vessels, the level of risk associated with specific ports or regions, and the level of coverage selected.

Open cover marine insurance is a standing agreement that covers a range of shipments, while the specific cover is tailored to a specific shipment. Open cover policies are typically used by companies that engage in frequent shipments and need ongoing coverage, while specific cover policies are used for individual shipments.

Institute Cargo Clauses are standard terms used in marine insurance policies to define the coverage provided for cargo. The clauses outline the specific risks and perils that are covered, as well as any exclusions or limitations on coverage. Institute Cargo Clauses can help standardise coverage and reduce confusion in the marine insurance industry.

Marine surveyors are experts who assess and examine the condition of vessels and cargo. The insurer may hire them to evaluate risks associated with a specific shipment or vessel, or they may be used to investigate losses or damage that have occurred. The surveyor's report can be used in the underwriting process and to resolve disputes related to claims.

When a loss or damage occurs, the policyholder should notify the insurer as soon as possible. The insurer will then initiate an investigation to determine the cause and extent of the loss. Once the investigation is complete, the insurer will either deny the claim or provide payment to cover the loss up to the limits of the policy.

General Average is a legal principle that requires all parties involved in a maritime voyage to proportionally share the losses incurred as a result of a deliberate act to save the vessel or cargo. Marine insurance policies may include coverage for General Average losses, depending on the policy's specific terms.

Marine insurance policies can include coverage for pollution liability, covering costs associated with an oil spill or other environmental damage caused by a vessel or its cargo. The specific terms of coverage for environmental risks can vary depending on the policy and the jurisdiction in which it is issued. Some policies may include exclusions or limitations on coverage for certain types of environmental damage.

Marine insurance policies can include coverage for political risks and war risks, such as damage or loss caused by acts of war, civil unrest, or political upheaval. This coverage may include specific exclusions or limitations on coverage. The specific terms of coverage for political and war risks can vary depending on the policy and the jurisdiction in which it is issued.

Marine insurance for international trade can be more complex than domestic marine insurance, as it may involve multiple jurisdictions and legal systems. It is important for policyholders to carefully review the terms and conditions of their marine insurance policies to ensure that they are adequately covered for the risks associated with international trade. In some cases, purchasing separate policies or additional coverage may be necessary to address the unique risks of international trade.

The consequences of not having marine insurance can be severe, as the costs associated with a loss or damage can be significant. In addition to the financial impact, not having insurance can also result in legal liability and damage to a company's reputation.

In some cases, not having marine insurance can even result in the inability to secure financing or meet contractual obligations related to transporting goods.

Yes, marine insurance policies can be customised to fit specific needs and risks. Policyholders can work with their insurance provider to identify the risks associated with their vessel or cargo and tailor coverage to address those risks. This involves selecting the suitable type of policy and the adequate coverage needed.

The cover amount for Marine Cargo Insurance should be based on the total value of the goods being shipped, including the cost of the goods and freight to cover incidental costs. It is essential to ensure the cover amount reflects the true value to avoid underinsurance.

Marine Cargo Insurance is mandatory and also highly recommended. It is a must for the ship owners and it protects the cargo owner against potential losses or damages during transit, providing financial security and peace of mind.

Marine insurance is also known as marine transit insurance and marine cargo insurance. However, marine insurance is not limited to offering coverage for goods transported solely by sea. It also includes other modes of transportation like rail, road and air.

A mixed plan in marine insurance offers coverage for both voyage and time plans. It is beneficial as it provides comprehensive protection for goods and versatile options for coverage.

An open policy, also known as an open cover, provides continuous coverage for multiple shipments over a specified period. It covers all shipments made by the insured within the policy period, eliminating the need to take out separate policies for each shipment.

Freight insurance covers the cost of freight in the event of loss or damage to the goods during transit. It ensures that the shipping costs are recoverable, protecting the financial interests of the freight forwarder or carrier.

A floating policy in marine insurance provides coverage for multiple shipments within a specified period under one policy, without the need to declare each shipment individually. It is ideal for businesses that regularly ship goods, offering flexibility and ease of management.

The basis of valuation in Marine Cargo Insurance typically includes the cost of goods, freight and an additional percentage of usually 10% for incidental costs. This ensures the insured value reflects the total potential loss.

The deductible in a Marine Single Transit Policy is the amount that the insured must bear in the event of a claim before the insurance coverage kicks in. The deductible amount varies depending on the policy terms and the insurer.

A Marine Cargo Single Transit policy expires once the specified transit is completed, which means when the goods reach the final destination as stated in the policy. It usually has a validity of 3 months during which the cargo owner can file claims if needed.

A port risk plan is useful when goods are stored at a port for an extended period before being shipped. It protects against risks such as theft, fire, and natural disasters while the goods are at the port.

You should take Marine Cargo Insurance before the goods are dispatched for transit. This ensures that the goods are covered from the moment they leave the point of origin until they reach the final destination.

You can buy a one-year policy covering all your shipments from Tata AIG. We off marine insurance plans. Our policies provide continuous coverage for all shipments made within the policy period. You can compare plans on our website and choose the one that best suits your needs.

The choice between Marine Single Transit, Annual Open, or Sales Turnover cover depends on the frequency and volume of your shipments. Single Transit is suitable for occasional shipments, Annual Open for regular shipments and Sales Turnover for high-volume businesses with continuous shipments.

You should opt for a reputable insurance company with a strong track record in marine insurance. At Tata AIG, we offer a range of coverage options. You can get in touch with our insurance experts to know more about the marine policies that we have.

Businesses that frequently ship goods benefit from a floating plan. The amount of the claim is specified beforehand but the details such as the maximum value per shipment, types of goods covered and geographical limits are specified after the voyage starts.

The party that stands to suffer a financial loss if the goods are damaged or lost has an insurable interest. This includes the buyer, seller, trustees, freight forwarder, or anyone with a financial stake in the cargo.

The policyholder in Marine Cargo Insurance is the individual or entity that purchases the policy to protect their financial interest in the cargo being shipped.

Any individual or business involved in the shipping of goods from one place to another should buy Marine Cargo Insurance. This includes exporters, importers, manufacturers and freight forwarders.

Businesses that need coverage for a specific voyage or shipment benefit from purchasing a voyage plan. This policy expires once the specified voyage is completed and the goods reach the destination.

You should buy Marine Cargo Insurance to protect against financial losses due to damage, theft, or loss of goods during transit. It provides peace of mind and ensures business continuity.

The time to settle a claim varies depending on the complexity of the claim and the insurer's processes. It can take anywhere from a few weeks to several months. Prompt submission of all required documentation can expedite the process.

Perils of the sea refer to natural accidents or hazards peculiar to sea voyages, such as storms, waves, collisions, grounding and sinking. These are unforeseen and unavoidable events that can cause damage to cargo.

Types of marine/transit cargo policies include:

• Freight Insurance
• Hull Insurance
• Marine Cargo Insurance

Below are some general conditions or warranties attached to a marine insurance policy:

• Rusting, oxidation, discolouration 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.
• Losses due to adulteration, contamination and deterioration of quality are excluded.
• Goods must be transported in closed wagons and/or trucks covered with tarpaulin or other waterproof materials to avoid water ingress.

Goods that are hazardous or perishable in nature may be excluded from coverage under marine insurance. Additionally, items that could endanger the safety of vehicles or individuals on board are not covered during transit.

A few types of marine cargo insurance covers include:

• Wager Policy
• Blanket Policy
• Single Vessel Policy
• Fleet Policy
• Port Risk Policy
• Named Policy
• Mixed Policy

To determine the correct commodity for your shipment, consult with your freight forwarder, or seek guidance from insurance experts from Tata AIG for accurate categorisation for insurance purposes.

● Assess your needs: Consider the type of cargo, mode of transport and risks like theft, damage or liability.

● Research the insurer: Check reputation, claim settlement ratio and customer reviews.

● Compare policies: Evaluate coverage, deductibles, premium and flexibility across different plans.

● Understand exclusions: Know what’s not covered to avoid surprises during claims.

● Seek clarity if needed: Contact the insurer’s support team for questions or customisation options.

TATA AIG offers tailored marine insurance plans to suit your business requirements.

Bill of lading is a legal document that is issued by a carrier to a shipper based on the transportation of goods. It contains details of the type of goods, quantity and the destination of goods under transit.
It is an important document because it is considered the shipment receipt and proof of contractual agreement.

At TATA AIG, we cover the increased value of goods due to duty payments and losses due to delay and rejection of cargo, subject to the policy terms and conditions. We offer the add-ons such as, deliberate damage caused by pollution, fumigation clause, concealed damage, etc.
Contact us via email (customersupport@tataaig.com) or at our 24/7 toll-free number (1800-266-7780) for more details about applicable add-ons.

Marine insurance for small businesses can help cover substantial financial losses related to the goods in transit against a wide range of risks. It includes damages and losses due to theft, accidents and natural disasters.
By offering an affordable policy and a streamlined process it can help prepare for effective risk management and ensure financial security. It can also enhance credibility and ensure smooth trade operations.