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What is Marine Cargo Insurance?

Marine Cargo Insurance provides coverage against any damage caused to cargo vessels which are in transit by road, rail, inland waterways from one point to another. The policy covers damage incurred to the cargo while it is grounded or in transit due to other factors like weather conditions, strikes, war, collision, sinking, navigation errors etc.

What does Marine Cargo Insurance Cover?

The risks covered by Digit’s Marine Cargo insurance policy are listed below:

Risks Clause

Risks Clause

Under the risk clause, the insured cargo which is being transported is protected against all risks that can result in loss or damage of the cargo, except for those expressly excluded.

Clause of General Average

Clause of General Average

The general average clause in marine cargo insurance compels the insurers to share the cost of losses incurred voluntarily to save the voyage from complete destruction. For example, if a shipper’s cargo is needed to be unloaded or thrown away to save the vessel from total loss, the general average clause requires the insurers to make a contribution to the loss of the shipper whose goods were sacrificed.

Clause of Both to Blame Collision

Clause of Both to Blame Collision

Both to blame collision clause states that both the ship owners must share the responsibility of a collision and the damage of the cargo, if the crash occurred due to negligence of both parties.

What’s not Covered?

Digit’s Marine cargo insurance policy does not cover for the mentioned points:

Wilful misconduct

Damage attributable to the wilful misconduct of the insured.

Ordinary costs

Expenses incurred for everyday wear and tear, ordinary loss in weight/volume or leakage.

Insufficiency

Damage caused by insufficiency of packing or preparation of the subject matter insured to withstand the ordinary incidents of the insured transit.

Delay

Damage caused by delay even though the delay is caused by a risk insured against.

Inherent vice

Damage caused by inherent vice or nature of the subject-matter insured.

Riots

The insurance policy will not cover damage or expenses caused by people taking part in labour disturbances, riots or civil commotions.

Use of nuclear fission

Damage is directly or indirectly caused by or arising from the use of any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

Unfitness

The policy will not cover the expenses incurred for damage caused due to unseaworthiness of the ship that is used for safe carriage of the subject matter insured.

Perils like war

Damage caused due to war, revolution, rebellion will not be covered under the insurance policy.

Insolvency

Damage caused by insolvency or financial default of the owners, managers, charterers or operators of the vessel was at the time of loading of the subject matter insured on board the vessel, the assured is aware or in the ordinary course of business should be mindful that such insolvency or financial default could prevent the routine prosecution of the voyage.

Features of Digit's Marine Cargo Insurance

All insurance policies come with specific features. Listed below are the ones for the marine cargo insurance policy offered by Digit:

Comprehensive coverage

A marine cargo insurance policy offers comprehensive coverage for all potential perils. It ensures that goods exposed to damage are covered under the insurance policy.

Flexibility

The insurance policy comes with various options and is flexible. Policyholders can choose a policy as per their requirements and their budget.

Easy claim settlement process

The policy comes with an easy claim settlement policy. This feature frees the policyholder from stress as worldwide claims settlement assistance is offered.

Customization

As the policy comes with flexibility, you can customize the plans and adjust them as per your needs.

Coverage extension

The policyholder has the liberty to enhance the coverage with add-on benefits. The feature ensures that you are protected from risks arising due to factors like riots, strikes, etc. 

Who needs a Marine Cargo Insurance policy?

A marine cargo insurance policy can be bought by -

Sellers/Merchants

Those who sell goods can avail themselves of this policy as they need to transport goods to different parts of the country.

Contractors

Contractors can also avail of a marine cargo insurance policy.

Anyone engaged in import/export or transportation of goods

The policy can also be availed by those involved in the import and export of goods or transport across the country. 

How is the premium calculated for Marine Cargo Insurance?

In Marine cargo insurance, the premium is calculated based on the factors mentioned below:

Type of goods transported

The premium will be high if the transported goods have an increased risk of damage. Given that, extra caution needs to be taken to transport the goods, the premium charged is high.

Mode of transport

The mode of transport used to get the goods from one place to another is another factor that impacts the premium for the policy. As different modes of transport involve different types of risk, the premium varies.

Vehicle type

The payable premium also depends on the type of vehicle which is used for transporting of goods. The payable premium will be high if the used vehicle is a large one and involves high risk.

Age of the vehicle

The age of the vehicle also impacts the premium charged for a marine cargo insurance policy. The premium will be on the higher side is the vehicle has been in use for a long time as the chance of wear and tear and associated risks are high.

Cost of the transport vehicle

The payable premium is also impacted by the cost of the vehicle used to transport the goods.

Trading limit

The limit of trading and tonnage also impacts the policy’s premium. If the limit is high, the premium will be high and vice versa.

Type of insurance cover

The kind of insurance cover you opt for also impacts the policy premium. Like the points mentioned above, the more extensive the coverage, the higher is the payable premium. 

Ownership terms

Before calculating the policy’s premium, ownership and management terms needs to be taken into account. It plays an important part when determining the payable premium.

How to choose the right Marine Cargo Insurance policy?

When choosing the right Marine cargo insurance policy, certain factors that need to be considered. They are listed below:

  • Insurer’s reputation – You need to look into the insurer’s reputation from where you are planning to buy the insurance policy. Doing this, will enable you to make sure that there are no issues during claims. 

  • Robust marine claim department - Another thing to consider is whether the insurer has a healthy maritime claim department. It is essential because you don’t want your claim application stuck at their table.  

  • Affordable premium – The payable premium is another factor that needs your attention. You don’t want to pay a higher premium for your coverage 

  • The coverage you need – When availing yourself of marine cargo insurance, you need to consider the coverage it offers. This will ensure that you get a policy that provides the coverage you want and not one just for the sake of it. 

  • Surveyor & Assessor network - When choosing the right Marine Cargo insurance policy, it is important to look at the surveyors and assessors network of the insurer. This is because if the claim goes beyond a certain defined limit, an assessor visits you to determine the exact damage.

FAQs about Marine Cargo Insurance in India