What is a marine insurance policy and is it important for everyone? Well, let’s find out all about it.
What is Marine Insurance?
First things first; Marine Insurance Policy is not for everyone and not everyone needs it either.
Secondly, a marine insurance plan insures all the goods that are being transported from one land to another. This policy helps in covering the damage or loss of cargo, ships and terminals that are involved in the transportation of the goods from one location to their final destination.
From its name, people usually assume that marine insurance is limited to the goods that are transported through the sea. However, that is not true. It was named when transport of goods began and initially, it was only done through sea. But now, as transportation mediums are vast, marine insurance policy is important for any company that is involved in shipping goods from one location to the other.
For example, if you ship products or goods through air, the insurance plan is termed as “contract of marine cargo insurance.” Thus, the name was generated years ago but is for everyone involved in the cargo or shipment industry.
Is Marine Insurance Policy Important?
We usually come across several types of insurance, varying from life insurance to family insurance and much more. Every type is important for a specific set of people and some insurances are stated to be a premium choice for people who can afford them. So what about marine insurance policy? Is it important?
Yes. Marine insurance is very important for everyone who is involved in the import and export trade industry or proceedings. One of the three parties, involved in the shipment of the goods, has to be insured, by all means. It is mandatory. Anyone from the forwarding agent, exporter or the importer, must have marine insurance. It is a good idea that all should be insured if they are dealing with goods as it minimizes loss to a large extent.
Types of Marine Insurance
There are 4 types of marine insurance policies that you must know about, so that you can choose one accordingly.
1. Freight Insurance:
With freight insurance coverage plan, if the goods in transit are damaged, the operator would lose the receivables. In this case, the insurance plan will give compensation for the loss of the damaged freight.
2. Hull Insurance:
The second type is the hull insurance. It covers the torso and hull of the vehicle in which the goods are being transported from one location to the final destination. This covers the vehicle in case of any accidents and damages during the transit of goods.
3. Liability Insurance:
Marine liability insurance helps in covering the loss of a shop that might collide or crash during transporting goods from one land to the other.
4. Marine Cargo Insurance:
This is the last type of marine insurance policy that you can get. It covers all the goods that are being transported to another destination. If any of the goods is damaged, the insurance policy will provide compensation for it.
What is not covered under marine insurance?
There are certain things that a marine insurance plan does not cover and it is important to have knowledge about them. It will not cover you for the following:
- Renovation and repairs
- Low quality products or goods
- Late delivery issues
- Personal insolvency
- Wars and other such situations
- Intentional losses
Marine insurance is an important part of the cargo and freight industry. It is extremely helpful in meeting the huge business goals these days, whilst having peace of mind. If you are covered, you wouldn’t be tense about the loss or damage that might happen during transit. We all know how challenging a huge transit is and damages are expected. But with a good marine insurance policy and coverage plan, you can easily set yourself up for success.