Introduction
The Marine Insurance Policy is a comprehensive insurance policy providing coverage 24/7, 365 days a year for medium and small businesses in India. It covers all kinds of transportation like rail, road, marine and air. This policy safeguards businesses involved in importing, exporting, or transporting goods via various methods. It offers protection against risks associated with different modes of transport, ensuring financial security in cases of damage, loss, accidents, or other perils during operations. This policy provides peace of mind to businesses, regardless of the transportation mode they use, as it guarantees coverage.
1. Understanding Marine Insurance
Explaining with an example who marine insurance is and how it helps .
1. Iron Trader Mayank Story , from Delhi
“Meet Mayank, a diligent iron trader who has gained a reputation for consistently delivering his best and upholding reliability in his business dealings. His unwavering commitment has earned him the trust of many. Mayank comes from a family with a legacy of over 25 years in the business, and when he joined, his first strategic decision was to secure a Marine policy. He has maintained this Marine policy for more than 5 years without a claim history, all while achieving an impressive turnover of over 100 crore.”
2. A Fateful Day: A Transit Mishap
In January 2023, while others remained unaware, Mayank had no inkling that a stroke of misfortune was about to enter his life. At around 4:00 a.m., he received a call that revealed a shipment bound for Nagpur had met with a severe accident. The goods being transported were also damaged from the accident site to the destination. This unexpected turn of events resulted in an estimated loss of 48 lakh rupees, causing Mayank to suffer the complete loss of his entire shipment.
3. The Lifesaver: How Marine Insurance Came to the Rescue
Facing this substantial financial setback, Mayank’s Marine Insurance policy emerged as his saviour. It promptly provided coverage for the massive 48 lakh rupee loss. With just a minor 0.5% deduction for GST, Mayank was able to file a claim for the full amount, significantly mitigating his financial losses.
4. A Peaceful Night’s Sleep: The Assurance of Marine Insurance
Mayank’s story goes beyond the recovery of his financial stability; it’s about finding peace of mind. Knowing that his hard-earned work and financial security were safeguarded by his Marine Insurance policy, Mayank could rest easy. Marine insurance not only rescued his business but also offered him an invaluable sense of security and tranquillity.
1.1 KIND of marine insurance coverages .
Two kind of coverages – ITC a and ITC b
Here’s a comparison of ITC A and ITC B:
| Aspect | ITC A | ITC B |
|---|---|---|
Natural disasters , Flood , Earthquake ETC | Natural disasters ,Flood , Earthquake ETC | |
Fire | Fire | |
Rollover of Vehicle | Rollover of Vehicle | |
Practical damage | Practical damage | |
Coverage Exclusions | None | Excludes theft or loot coverage |
ITC A provides comprehensive coverage, including protection against natural disasters, theft, and practical damage. In contrast, ITC B offers coverage for various risks but does not include protection against theft or loot.
2. What Does Our Marine Insurance Policy Cover?
It covers goods in transit around the clock, 24/7, 365 days a year As per policy terms . The policy applies to goods transported via sea, air, road, or rail.
Accident Cover: This covers damage to cargo resulting from accidents during transportation.
Theft Cover: This pertains to the loss of cargo due to theft or pilferage.
Natural Disaster: It provides protection against damage caused by natural disasters such as storms, floods, or earthquakes.
Fire Accident Cover: This covers losses resulting from fire incidents during transit.
General Expenses Cover: This offers coverage for general average contributions, salvage, and sue and labor expenses.
Liability Cover:It protects against liabilities arising from collisions, contact with other vessels, or property damage.
Delay in Transit Cover:This covers financial losses resulting from delays in transit.
Quarantine Compensation:This provides compensation for expenses incurred due to vessel detention or quarantine.
Temperature Sense Cover:It covers the deterioration or spoilage of perishable goods.
Riots, War & Civil War, etc.: This protection guards against risks associated with war or political unrest affecting transportation routes.
Business Financial Safety:This policy provides financial security for businesses involved in international trade or shipping.
3. Additional Add-ons Under the Marine Insurance Policy
Extended Coverage for High-Value Goods: This additional coverage provides extra protection for transporting valuable items, ensuring they are fully covered in case of any unforeseen incidents during transit.
Strikes, Riots, and Civil Commotions (SRCC) Coverage: This coverage protects against losses or damages caused by strikes, riots, or civil commotions during transit.
War and Terrorism Coverage: This coverage provides protection for losses or damages resulting from acts of war, terrorism, or political violence.
Temperature-controlled Cargo Coverage: This coverage offers protection for perishable goods that require temperature-controlled transportation, covering losses caused by temperature deviations or equipment failures.
Exhibition or Trade Show Coverage: This extends coverage to goods displayed or exhibited at trade shows, exhibitions, or fairs.
Customized Coverage: This option tailors the policy to meet the specific needs and requirements of the insured, providing additional coverage for unique or specialized goods or circumstances.
Loading and Unloading Clause: The loading and unloading clause provides coverage for any damages that occur while goods are being loaded onto or unloaded from the transport vehicle, protecting against potential losses during these critical stages.
ODC (Over Dimensional Cargo) Clause: The ODC clause offers specialised coverage specifically for transporting large or oversized cargo, ensuring protection for these unique shipments and addressing any potential risks associated with their transportation.
4. How to Settle a Marine Insurance Claim with an Example
Let’s explain the process step by step using Mayank’s claim settlement as an example:
Step 1: Informing the Insurance Broker or Agent
Mayank first informs his insurance broker or agent about any loss or damage that occurred during transit.
Step 2: Agent Gathers Details
Mayank’s agent collects the following details from him and reports the claim to the insurance company:
1. Policy number
2. Policyholder’s name
3. Location of the incident
4. Contact details of the policyholder
5. Cause of the accident
6. Approximate loss in INR.
Step 3:Insurance Company Assigns a Surveyor
The insurance company assigns a surveyor to assess the situation. The surveyor visits the accident site to determine the cause and also ensures the preservation of any remaining goods at the accident location.
Step 4: Surveyor’s Documentation Request
The surveyor, over approximately four days to a week, requests the following documentation from Mayank, in compliance with the policy terms and conditions.
Step 5: Documentation Request
The surveyor asks Mayank for the following documents, assuming Mayank has an open marine insurance policy and has paid for a year of coverage:
1. Invoice copy
2. E-way bill
3. Marine declaration (containing sales and purchase data from the policy start date to the date of the accident)
4. Monetary claim data (details of the claim sent to the transporter, explaining how and when the accident happened)
5. Insurance policy copy
6. Claim form
7. Claim bill (the bill issued by Mayank’s company to the insurance company, equal to the total loss during the accident)
8. Subrogation letter
9. Discharge voucher
10. Letter from the transporter (providing details of the accident and the loss)
11. Vehicle documents, including vehicle registration, insurance copy, fitness certificate, and permit copy
12. Driver’s license
13. Driver’s statement
14. KYC documents, such as GST and PAN cards.
Step 6: Surveyor’s Assessment
The surveyor reviews all the provided documents, verifies them, and sends an email with the final assessment to Mayank, including the final settlement amount as per the policy terms and conditions.
Step 7: Agreement and Report Submission
Mayank agrees to the offered settlement amount. The surveyor sends the final report along with all the documentation to the insurance company.
Step 8: Insurance Company Document Verification
The insurance company reviews all the documents submitted by the surveyor, conducting a thorough check.
Step 9:Settlement Decision
The insurance company determines the eligible amount and communicates this decision to Mayank.
Step 10: Confirmation and Settlement
Once again, the insurance company sends a confirmation email to Mayank. After he provides consent, the claim is settled, and the amount is credited to Mayank’s account.
This process outlines the steps involved in settling a marine insurance claim, using Mayank’s case as an example.
5. Policy Exclusions in Marine Insurance .
1. Losses due to willful misconduct: The policy does not cover losses resulting from intentional acts or negligence on the part of the insured.
2. Delay-related losses: The policy does not cover delays in transit without any physical loss or damage.
3. Inherent vice or nature of goods: Losses arising from the natural characteristics or inherent vice of the insured goods are excluded from coverage.
4. Insufficient or improper packaging: Losses due to inadequate or improper packaging of the cargo are not covered by the policy.
5. Unseaworthiness of the vessel: The policy excludes losses caused by the unseaworthiness of the vessel or a lack of proper maintenance.
6. Nuclear or war-related risks: Losses resulting from nuclear incidents, war, civil war, or political unrest are not covered by this policy.
7. Confiscation or detention by customs: The policy does not cover losses arising from the confiscation or detention of goods by customs authorities.
8. Losses covered under separate policies: Losses that are already covered by other insurance policies are not included in this policy.
9. Over dimension or overloading : the policy doesn’t cover the over dimension or the overloading as per government norms
To know more check out the Video
Frequently Asked Questions : Marine Insurance
Marine insurance is a policy that safeguards against financial losses associated with marine activities, such as cargo transportation, vessel protection, and maritime liabilities.
Marine insurance works by providing coverage for potential risks, and in exchange for premiums, insurers compensate for covered losses or damages during marine ventures.
Marine insurance covers various risks, including damage or loss of cargo, accidents during transportation, natural disasters, liabilities, and delays during marine activities.
Marine insurance is vital for individuals and businesses involved in maritime trade as it offers financial protection against the uncertainties of marine activities.
Types include Open marine insurance policy , single transit marine insurance policy and stop Marine policy
Marine cargo insurance safeguards goods in transit against loss or damage during transportation by sea, air, or land.
Key principles include utmost good faith, indemnity, insurable interest, proximate cause, subrogation, contribution, and abandonment.
A total loss in marine insurance occurs when the insured property or cargo is entirely lost or damaged beyond repair.
Premiums are calculated based on factors like the value of goods, transportation method, coverage amount, risk factors, and the insurer’s premium calculation method.
An open policy covers multiple shipments under one policy, offering flexibility for frequent or continuous marine-related activities.
Marine insurance facilitates global trade by mitigating financial risks, ensuring goods reach their destinations even in the face of unforeseen events.
