Marine Insurance Policy In India - Coverage, Benefits and Claims

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Contents
  1. What is a Marine Insurance Policy?
  2. What does a Marine Insurance Policy Cover?
  3. Coverage under Institute Cargo Clauses (A) of Marine Insurance Policy
  4. Coverage under Institute Cargo Clauses (B) of Marine Insurance Policy
  5. Coverage under Institute Cargo Clauses (C) of Marine Insurance Policy
  6. What are the different types of Marine Insurance Policies?
  7. Marine Insurance Act, 1963
  8. What is the need for a Marine Insurance Policy?
  9. What are the Features of a Marine Insurance Policy?
  10. Which Insurance Companies provide Marine Insurance in India?
  11. What are the major exclusions under a Marine Insurance Policy?
  12. How to file a Claim under a Marine Insurance Policy?
  13. Secure your Cargo with India's Leading Marine Insurance Broker
  14. FAQS
  15. Testimonials

What is a Marine Insurance Policy?

Marine Insurance as per the Marine Insurance Act of 1906 is defined as “A Contract of Marine Insurance is a contract whereby the Insurer undertakes to indemnify the Assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure.

The Act further states, “A contract of Marine Insurance may, by its express terms, or by usage of trade, be extended so as to protect the Assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.”

Thus, a Marine Insurance Policy is an insurance policy which reimburses the Insured Party for the damage to the Insured Cargo whilst in transit.  The definition of Marine Insurance as per the Marine Insurance Act, 1906 makes it clear that that the Insurance Policy covers transits by sea, air or waterways before or after the sea voyage, as long as these transits are incidental to the main sea voyage.

What is a Marine Insurance Policy?

What does a Marine Insurance Policy Cover?

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

What are the different types of Marine Insurance Policies?

  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.

Marine Insurance Act, 1963

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

What is the need for a Marine Insurance Policy?

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.

What are the Features of a Marine Insurance Policy?

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.

Which Insurance Companies provide Marine Insurance in India?

Following Insurance Companies provide a Marine Insurance Policy in India:

  1. New India Assurance Company
  2. Oriental Insurance Company
  3. ICICI Lombard General Insurance Company
  4. Tata AIG Insurance Company
  5. Bajaj Allianz General Insurance Company
  6. SBI General Insurance Company
  7. HDFC Ergo General Insurance Company
Which Insurance Companies provide Marine Insurance in India?

Marine Insurance Policy normally excludes Damage to the Cargo on account of the following:

Marine Insurance Policy normally excludes Damage to the Cargo on account of the following:

Exclusions under a Marine Insurance Policy
Loss or Damage to the Cargo which can be attributable to the Willful Misconduct on the Insured Loss or Damage to the Cargo on account of Ordinary Wear and Tear
Loss or Damage to the Cargo on account of Inherent Vice or Nature of the Insured Cargo Loss or Damage to the Cargo on account of Insufficient or Unsuitable Packaging Material used
Loss or Damage due to Delay even though the Delay is Caused by a Peril Insured Against Loss or Damage due to Insolvency or Financial Default of the Owners, Managers, Charterers or Operators of the Vessel

How to file a Claim under a Marine Insurance Policy?

The Insured needs to follow the below mentioned steps in order to make a Claim under Marine Insurance Policy:

Step 1: Intimate the loss along with information such as date of loss, description of loss to the Marine Insurance Company

Step 2: The Insurance Company will appoint a surveyor to examine the loss and determine the quantum of damage.

Step3: Provide the following documents when Filing for a Claim under a Marine Insurance Policy:

  • Original Policy/Certificate
  • Original or Signed Copy of Invoice
  • Copy of Bill of Lading
  • Bill of Entry
  • Pre-Shipment Survey/Inspection Report
  • Extract from Log Book/Copy of Master's Report (if Vessel sustained Casualty/ Rough Weather)
  • Lost Overboard Certificate, if Cargo is Lost Overboard
  • Copy of Monetary Claim on the Carrier
  • Acknowledgement for the Claim Letter from Carrier

Step 4: Post examination of documents, the Insurance Company will pay the claim, if the loss is deemed to be admissible.

How to file a Claim under a Marine Insurance Policy?
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Secure your Cargo with India's Leading Marine Insurance Broker

Qian is an experienced Marine Insurance Broker having worked with a variety of corporates for their Cargo Insurance needs. Our experts are well-versed with the various clauses and nitty-gritties of a Marine Insurance Policy.

Qian is empanelled with all the Major Insurance Companies in India, thus enabling us to source Competitive Quotes with the widest possible coverages for our clients. You can be assured of Proven Claims Assistance with regards to any Damage that occurs to Goods-in-Transit.

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FAQS

Who has to purchase a Marine Insurance Policy - the buyer or the seller?

The responsibility of arranging a Marine Cargo Insurance depends on sale contract terms such as Free on Board, Cost and Freight (C&F), Ex-Works and Cost Insurance and Freight (CIF) between the 2 parties.

I want to purchase insurance for damage to goods in Transit. Which insurance policy should I take?

You need to take a marine cargo insurance policy which reimburses for any damage caused to the goods whilst in transit.

What is General Average in Marine Insurance?

In some cases if a ship is stranded or can't complete its journey, the crew may jettison (throw overboard) some cargo to protect the ship or protect themselves. In such cases, the losses are shared between the cargo owners and the vessel owners. If the cargo is insured, the insurance company compensates the insured for such loss.

Testimonials

Average Customer Rating:

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Hemik of Qian is knowledgable, prompt and very professional - highly recommended. I had to claim for a critical illness under my health insurance policy and Qian’s assistance with the claims process and advice on how to deal with the insurer was invaluable.

Niyati Shah