Marine Insurance Policy in India

A Marine Insurance Policy compensates the insured party on account of any damages/losses that happen to the cargo/goods whilst in the course of transit.

Marine Insurance provides cover to Insured Cargo under the 3 types of Institute Cargo Clauses as mentioned below:

Coverage under Institute Cargo Clauses (A) of Marine Insurance Policy

Coverage under ICC-A Clauses is the Widest form of Cover available under a Marine Insurance Policy. It is an All-Risk Cover including Theft, Pilferage, Short Delivery, Non-Delivery. All forms of Physical Damage to the Cargo are covered unless not specifically excluded.

Coverage under Institute Cargo Clauses (B) of Marine Insurance Policy

Coverage under ICC-B Clauses is the more restrictive form of Cover compared to covere available under a ICC-A Clauses of a Marine Insurance Policy. Institute Cargo Clauses (C) Clauses provide cover for the following perils:

• Fire or Explosion
• Vessel or Craft being stranded grounded sunk or capsized
• Overturning or derailment of land conveyance
• Collision or contact of vessel craft or conveyance with any external object other than water
• Discharge of cargo at a port of distress
• Earthquake, Volcanic Eruption or Lightning
• General Average Sacrifice
• Jettison or Washing Overboard
• Entry of sea lake or river water into vessel craft hold conveyance container lift van or place of storage
• Total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft

The coverages and the premium of a Marine Insurance Policy would vary depending on the clauses under which the cover is chosen.

Coverage under Institute Cargo Clauses (C) of Marine Insurance Policy

Coverage under ICC-C Clauses is the most restrictive form of Cover available under a Marine Insurance Policy. Institute Cargo Clauses (C) Clauses provide cover for the following perils:

• Fire or Explosion
• Vessel or Craft being stranded grounded sunk or capsized
• Overturning or derailment of land conveyance
• Collision or contact of vessel craft or conveyance with any external object other than water
• Discharge of cargo at a port of distress
• General Average Sacrifice
• Jettison

1. Single Transit Policy/Specific Voyage Policy
   This type of Policy is issued for a Specified Transit. The Insurance Cover ceases once the Goods are delivered to the Destination mentioned in the Policy.
2. Marine Open Policy
   This type of Cover is applicable for Businesses having Substantial Turnover requiring Continuous Dispatches of Cargo. In such a case, getting a Single Transit Policy for each and every Dispatch is inconvenient and cumbersome. An Open Policy solves this problem by enabling Automatic and Continuous Cover for the Cargo while the Insured declares the Cargo movement at Pre-Decided Intervals.
3. Sales Turnover Policy
   A Sales Turnover Marine Insurance Policy (STOP Policy) covers the Company’s Turnover compared to Standard Marine Insurance Policies which cover the Value of Cargo. A Sales Turnover Policy is meant to cover Exports and Imports together in a Single Policy under the ITC and ICC Clauses. Such Policies are issued for Large Businesses.
4. Duty Policy
   A Duty Policy is applicable for Imports into India only. If the Cargo is Damaged during Transit from the Unloading Port to Importer’s Warehouse, a Marine Cargo Insurance Policy would be insufficient as it would cover only the Value of the Cargo whereas the Buyer would also suffer substantial losses on account of the Customs Duty paid once the Cargo lands at the Port. A Duty Insurance Policy would reimburse the Customs Duty that would have been paid for the Damaged Cargo.

The Marine Insurance Act of 1963 codifies the laws relating to Marine Insurance. It was adopted from the English Law and thus Marine Insurance Act of 1963 is very similar to Marine Insurance Act, 1906.

The Marine Insurance Act of 1963 deals with major aspects of Marine Insurance such as:

1. Definition of “Marine”
2. Insurable Interest
3. Insurable Value
4. Principles of Disclosures
5. Marine Insurance Policy Structure
6. Contribution
7. Warranties
8. Voyage
9. Assignment of Marine Policy
10. Types of Losses and Abandonment
11. Measure of Indemnity
12. Subrogation
13. Return of Premium

Whenever goods are being transported, they are exposed to various risks. The ship or the vehicle carrying the cargo may catch fire or may be involved in an accident. It may be attacked by pirates at sea or may collide with other goods. Such occurrences result in substantial financial losses for the cargo owner. A Marine Cargo Insurance Policy is one of the best options to compensate you for any losses or damage that occur to goods in transit.

Additionally, most countries require cargo owners to have a valid Marine Insurance Policy to comply with regulations. A Marine Insurance Policy, thus, helps with legal compliance as well.

he features of a Marine Insurance Policy are as follows:

1. Compensation for Physical Damage to Cargo: A Marine Insurance Policy reimburses the Insured Party for damage to cargo whilst in transit. This protects the Policyholder from severe losses.
2. Various types of Policies available: There are various types of Marine Insurance Policies available depending on the needs and requirements of cargo owners. A businessman engaging in a one-time transit can purchase a Single Transit Policy while a large business can opt for a STOP Marine Policy to cover purchases, sales etc.
3. Worldwide Cover: A Marine Insurance Policy provides compensation for losses in international seas as well. Thus, businesses can conduct import and export transactions without any fear.