What is Marine Insurance?

Marine Insurance provides financial protection against loss or damage to cargo, ships, and related transport assets during transit over water, land, or air. It is essential for businesses involved in shipping goods—domestically or internationally.

• Covers cargo shipped via sea, air, rail, or road
• Applies to import/export, inland transit, and warehousing risks
• Also insures vessels and freight revenue

Why Marine Insurance is Important

Logistics and transportation expose goods to risks like piracy, fire, theft, or natural disasters. Marine insurance helps:

• Protect business capital tied up in shipments
• Ensure uninterrupted cash flow and supply chain
• Comply with international trade contract requirements
• Cover liability arising from transit-related damage

Types of Marine Insurance

• Marine Cargo Insurance: Covers goods in transit via sea, air, rail, or road
• Hull Insurance: Covers loss/damage to the ship or vessel
• Freight Insurance: Protects the freight forwarder or shipping company’s income
• Liability Insurance: Covers third-party liabilities arising from marine operations

Coverage & Inclusions

Marine insurance usually includes:

• Loss or damage due to fire, explosion, collision, stranding, or sinking
• Theft, piracy, jettisoning, and washing overboard
• Natural calamities (storm, cyclone, earthquake)
• Accidental damage during loading/unloading
• War and strike risks (with add-on)
• Transit risk across multiple modes (road/rail to port/sea)

Policies can be customized based on Incoterms (FOB, CIF, EXW).

Exclusions

Marine insurance policies typically exclude:

• Inherent vice or nature of the goods
• Willful misconduct of the insured
• Delay or consequential losses
• Improper or insufficient packaging
• War and nuclear perils (unless add-on cover is taken)

Types of Marine Policies

• Specific Voyage Policy: Covers goods for a single shipment
• Open Policy: Long-term policy (usually 12 months) for regular shipments
• Named Policy: Lists the specific ship, voyage, and cargo
• Floating Policy: Declaration-based policy where each shipment is reported periodically
• Mixed Policy: Combines features of both voyage and time policy

Tax Benefits

• For Businesses: Premium paid on marine cargo or transit insurance is allowed as an expense under "Profits and Gains from Business or Profession" (PGBP) in income tax
• GST Input Credit: Available on insurance premium if shipment is part of a taxable business activity and GST invoice is provided

Claim Process

1. Notify the insurer or agent immediately after discovering loss/damage
2. Arrange for a surveyor to inspect the damage
3. Submit the claim form, bill of lading, invoice, packing list, and survey report
4. Respond to insurer queries and submit any missing documentation
5. Settlement is done based on agreed valuation (Invoice Value + Freight + Duty + Mark-up)

Tip: Always take photographs of damage and preserve packing materials for inspection.

FAQs for Importers, Exporters & Traders

• Is marine insurance compulsory for exporters?
  Not legally, but required by many contracts and trade agreements.
• Can marine insurance cover air and land transit?
  Yes. Most cargo policies cover multi-modal transportation.
• What if the buyer has taken the insurance?
  Depends on Incoterms (e.g., in CIF, seller provides insurance; in FOB, buyer handles it).
• How is marine insurance premium calculated?
  Based on cargo type, route, risk, packaging, past claims, and sum insured (usually CIF + 10%).
• Can I cancel a marine policy if shipment is delayed?
  Voyage policies can be cancelled before start of transit, subject to terms.