TYPES OF MARINE INSURANCE

 

TYPES OF MARINE INSURANCE

Freight Insurance

Liability Insurance

Hull Insurance

Marine Cargo Insurance

 

1. Freight Insurance

•       PROVIDES PROTECTION AGAINST THE LOSS OF FREIGHT.

•       IN MANY CASES, THE OWNER OF GOODS IS BOUND TO PAY FREIGHT, UNDER THE TERMS OF THE CONTRACT, ONLY WHEN THE GOODS ARE SAFELY DELIVERED AT THE PORT OF DESTINATION.

•       IF THE GOODS ARE DAMAGED IN TRANSIT, THE OPERATOR WOULD LOSE FREIGHT RECEIVABLES & SO THE INSURANCE WILL BE PROVIDED ON COMPENSATION FOR LOSS OF FREIGHT.

•       FREIGHT INSURANCE OFFERS AND PROVIDES PROTECTION TO MERCHANT VESSELS’ CORPORATIONS WHICH STAND A CHANCE OF LOSING MONEY IN THE FORM OF FREIGHT IN CASE THE CARGO IS LOST DUE TO THE SHIP MEETING WITH AN ACCIDENT.

•       THIS TYPE OF MARINE INSURANCE SOLVES THE PROBLEM OF COMPANIES LOSING MONEY BECAUSE OF A FEW EXCEPTIONAL EVENTS AND ACCIDENTS OCCURRING.

2.    Liability Insurance

•       MARINE LIABILITY INSURANCE IS ONE IN WHICH THE INSURER UNDERTAKES TO INDEMNIFY AGAINST THE LOSS WHICH THE INSURED MAY SUFFER ON ACCOUNT OF LIABILITY TO A THIRD PARTY CAUSED BY COLLISION OF THE SHIP AND OTHER SIMILAR HAZARDS.

3.    Hull Insurance

•       HULL INSURANCE: HULL INSURANCE MAINLY PROVIDESTHE UPPER BODY AND HULL OF THE VESSEL ALONG WITH ALL THE ARTICLES AND PIECES OF FURNITURE ON THE SHIP. THIS TYPE OF MARINE INSURANCE IS MOSTLY TAKEN OUT BY THE OWNER OF THE SHIP TO AVOID ANY LOSS TO THE VESSEL IN CASE OF ANY MISHAPS OCCURRING.

•       MACHINERY INSURANCE: ALL THE ESSENTIAL MACHINERY ARE COVERED UNDER THIS INSURANCE AND IN CASE OF ANY OPERATIONAL / ACCIDENTAL  DAMAGES, CLAIMS CAN BE COMPENSATED.

•       THE ABOVE TWO INSURANCES ALSO COME AS ONE UNDER HULL & MACHINERY (H&M) INSURANCE.

•       THE H&M INSURANCE CAN ALSO BE EXTENDED TO COVER WAR RISK COVERS AND STRIKE COVER (STRIKE IN PORT MAY LED TO DELAY AND INCREASE IN COSTS)

4.    Marine Cargo Insurance

•       MARINE CARGO INSURANCE IS A SUB SECTION OF MARINE INSURANCE.

•       THE PROTECTION IT PROVIDES IS AGAINST THE LOSS OR THEFT AND DAMAGE CAUSED TO CARGO DURING TRANSIT NETWORKS. 

•       THERE ARE TWO TYPES OF MARINE CARGO INSURANCE

1. ALL-RISK MARINE CARGO INSURANCE.
2. NAMED PERILS MARINE CARGO INSURANCE.

Types of Marine Cargo Insurance Coverage

1.    ALL-RISK MARINE CARGO INSURANCE COVERAGE

2.    NAMED PERILS MARINE CARGO INSURANCE COVERAGE

ALL-RISK MARINE CARGO INSURANCE

•       INSTITUTE CARGO CLAUSE A IS THE WIDEST COVERAGE YOU CAN PURCHASE, ALSO KNOWN AS AN ‘ALL RISKS’ CARGO INSURANCE POLICY.

•       FOR THIS REASON, IT IS THE MOST EXPENSIVE OF THE THREE ( A,B, & C). 

 

WHAT EXACTLY DOES IT COVER?

•       CLAUSE A COVERS MAXIMUM RISKS.

•       IT CAN COVER THE CARGO, CONTAINER, AND TRANSPORTATION, AND ANY EXCLUSIONS CAN BE FOUND IN THE GENERAL EXCLUSION CLAUSES.

NAMED PERILS MARINE CARGO INSURANCE

•       NAMED PERILS COVERAGE REFERS TO INSTITUTE CARGO CLAUSES ‘B’ AND ‘C’.

•       WHICH ARE MORE RESTRICTIVE TYPES OF MARINE CARGO INSURANCE.

•       THIS INCLUDES VARIOUS DEGREES OF NARROWER COVERAGE THAT WILL ONLY COVER THE LOSS IF IT IS CAUSED BY SPECIFIC, NAMED PERILS SUCH AS SINKING, STRANDING, OR BURNING.

•       ANY PERIL NOT NAMED IN THESE POLICY TYPES IS NOT COVERED BY THE INSURANCE.

WHAT IS CARRIER LIMIT OF LIABILITY?

 

•       THE TWO MAIN TYPES OF CARGO INSURANCE COVERAGE AN IMPORTER CAN PURCHASE TO PROTECT THEIR GOODS WHILE IN TRANSIT ARE        ALL-RISK AND NAMED PERILS.

•       IF AN IMPORTER DOES NOT PURCHASE CARGO INSURANCE, THEY ARE ONLY COVERED BY CARRIER LIMIT OF LIABILITY.

•       THE CARRIER LIMIT OF LIABILITY DETERMINES THE MAXIMUM AMOUNT OF MONEY THAT CARRIERS CAN BE HELD LIABLE FOR IN THE EVENT OF DAMAGE, LOSS, OR DELAY OF CARGO. HOWEVER, LIMITS OF LIABILITY VARY BETWEEN CARRIERS AND SITUATIONS.