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MARINE INSURANCE | Who should buy it | Benefits, Coverage and terms

marine insurance

Marine insurance is an insurance which covers all your goods, vessels or machinery under transit from one place to another be it anywhere in world.

Basically, Marine Insurance is divided into two parts- One is Marine Cargo Insurance and Other is Marine Hull Insurance.


Marine Cargo Insurance

Marine Cargo Insurance offers protection of your cargo or property while it is in transit from one place to another. Whether your goods or cargo under transit by mean of rail , road, air or sea , if you have covered your belongings under Marine Insurance then risks or perils which are consequent or incidental due to navigation are covered.

In simple terms, once you opt for Marine Insurance Cover then you do not need to worry about any damage or loss of your belongings under transit due to unseen event.


Marine Hull Insurance

Whereas in Marine Hull Insurance, loss or damage to your vessel or its machinery or any equipment is covered whether it is on domestic Journey or International journey.

Hull Insurance basically include all type of vessels like  Ship( Bulk Carrier or Combo Vessels) / Yachts/ Pleasure Boats etc  and offers protection against loss or damage to hull which means structure of Ship and Machinery as well.


In this post we are sharing some knowledge on Marine Cargo Insurance which is covered under following frequently asked questions-


Q. Who can take Marine Cargo Insurance Policy?

Ans.  Any Person who is involved in import/export business or is a buyer or seller where transportation of goods involved or a person whoever need to transport his belongings from one place to another can go for Marine Cargo Insurance.


Q. How is the value of your goods being ascertained?

Ans.  Marine Cargo is agreed value policy where a person who is willing to take policy declare the value of items that a person wants to cover under Marine Cargo Insurance and Insurance company agrees to that value.

Though at the time of claim, a policy holder needs to provide documents to justify the value taken and depreciation is also considered to arrive the value of damaged loss.


Q. Which transit modes are covered under Marine Cargo Insurance?

Ans. Mostly all type of transit modes are covered under Marine Cargo Insurance, which are-




         Registered Post




And combination of above mentioned modes.


Q. What coverages offered by Marine Cargo Insurance Policy?

Ans.  There are many type of coverages being offered under Marine cargo Insurance but the most popular one are called as, Institute Cargo Clause(ICC) A,B,C – These coverage(  Personal Advise – Always ask for ICC A Cover ) should be taken where transit of Goods/Cargo involves journey in sea whether the place of source or destination is inside/outside the geographical region of your country.

Another is, Inland Transit Rail/Road Clause A,B,C –  Where transit is by mean of rail/Road these cover must be taken.

Apart from above two, Institute War Clause , Institute strike Clause , Strike Riots and Civil Commotions clause and Institute Air Clause( if transportation include transit by Air) must be taken every time while taking Marine Cargo Insurance.


Q. What does Institute Cargo Clause (ICC) A,B,C offer?


Institute Cargo Clauses “C”

 1) Fire or explosion

 2) Vessel/Craft being stranded, grounded, sunk or capsized

3) Overturning/derailment of land conveyance

4) Collision or contact of vessel, craft or conveyance with any external object other than water

5) Discharge of cargo at a port of distress

6) General Average sacrifice

7) Jettison

8) General Average and Salvage charges incurred to avoid loss from any clause(s) except those excluded.

9) Liability under “Both to Bale collision” clause of the bill of lading.

10) Charges reasonable and properly incurred to avert/minimize an insured loss and to preserve and pursue recovery rights.

11) In the event of termination of transit at a port or place other than destination port or place resulting from a risk covered, EXTRA CHARGES incurred in unloading, storing and forwarding insured cargo to destination.


 RISK COVERED: Besides all coverage under ICC ‘C’, the ICC ‘B’ Covers the following additional Perils.

• Earthquake, volcanic eruption or lightning

• Washing overboard

• Entry of sea, lake or river water into the vessel, craft, hold, conveyance, container, lift van or place of storage

 • Total loss of any package lost overboard or dropped whilst loading or unloading from vessel or craft.


Extraneous Perils that can be covered ICC “C” & “B” at appropriate additional premium

 • Theft, pilferage and/or non-delivery

 • Fresh water and rain water damage

 • Damage by hooks, oils, mud, acid and other extraneous      substances

 • Heating and sweating

 • Damage by other cargo


The above perils are automatically covered under ICC “A” which is a wider cover and consist of all the coverages offered under ICC “B” and “C”.


Q. What does Institute Transit Clause (ITC) A,B,C offer?



Risk Covered :

1. Fire

2. Lightning


 Risks Covered :

Besides coverage under “C” the clauses ITC“B” additionally covers :

 1. Breakage of bridges

 2. Coalition with or by the carrying vehicle

 3. Overturning of the carrying vehicle

 4. Derailment of accident of like nature to the carrying rail     wagon/vehicle



Risk Covered :  All risks except those specifically excluded INLAND TRANSIT RAIL/ROAD CLAUSES


 • Willful misconduct

 • Ordinary/inevitable loss or damage

 • Insufficient or unsuitable or preparation

 • Delay

 • Inherent vice or nature of subject matter

 • War perils

 • Strike perils (Strike perils can be covered at an additional  premium by attaching SRCC clauses)


Q. What are the types of Marine Cargo Insurance policies?

Ans.  We are listing here main type of Marine Cargo Insurance policy available in market with brief description. Hope you could find the suitable one according to your requirements.

Specific Policy

This policy is issued for specific voyage containing the name of source and destination . This policy covers your consignment los/ damage until it reaches to named destination.

Who can buy it– anyone who needs to send goods from one place to another . If you are shifting your home then this policy could be opted as you can get all your belongings covered and rest assured about the mishappening during transit.

Open Policy

         – A type of floating policy and a stamped document

 – To take care of frequent transit with considerable   turnover

        – Issued for covering inland transit

        – Sum insured normally representing annual turnover – can be enhanced from time to time to suit the requirement

– Sum insured normally representing annual turnover – can be enhanced from time to time to suit the requirement

Who can buy it– If you are a manufacturer/ supplier who frequently send consignment as per demand of your customer anywhere in country then as per your declared annual turnover ,a annual policy will be issued so you do not need to buy the marine insurance every time.

·       OPEN COVER

-To provide continuous, automatic and guaranteed coverage to a regular importer or exporter issued for a period of 12 months with out specifying the sum insured – only limit per bottom and limit per location are specified

– Unstamped document – only an agreement in writing

– Individual stamped certificate/policy is issued on receipt of shipment details

– Issued for covering worldwide transit


Special Declaration Policy

-SDP is form of floating policy to clients having large turnover and frequent inland dispatches – minimum turnover stipulated is Rs. 2 crores – accepted on the basis of completed proposal.

– Sum insured shall be on the basis of previous year’s turnover or estimated annual turnover.


Seller’s Contingency Policy

-To cover physical loss or damage to consignment sold on FOB and C&F contracts in case the buyer repudiates the sale or fall to honour the shipping documents by reason of total loss of consignment during voyage.

– Normally combined with the seller’s cargo insurance covering the goods from his warehouse until it is loaded onto the ship. When it is done so, the cover attaches during transit from warehouse to ship and gets suspended after loading on to the ship. The cover reattaches with retrospective effect when the above contingencies takes place.

Q. What is not covered under Marine Cargo Insurance?


1. Willful misconduct of the Assured

2. Ordinary leakage, ordinary loss in weight/volume, or ordinary wear and tear of the subject matter insured

 3. Insufficient and unsuitability of packing

 4. Inherent wise or nature of the subject matter

5. Delay even though caused by insured perils

 6. Insolvency or financial default of the ship owners

7. Nuclear perils

8. Un-seaworthiness and unfitness of the vessel/conveyance (if the Assured is not aware of)

 9. War and warlike perils and strike perils.

War perils and strike perils can be covered concurrently by attaching Institute War and Strike Clauses.


Q. Why we need to insured 110% of CIF in marine insurance goods?

Ans.  CIF plus 10% which is intended to include the general overheads and perhaps a margin of profit.  Also, Here CIF means Cost, Insurance and freight.

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