FAQs about marine insurance

1) What is Marine Cargo Insurance and who requires it ?
      Marine Cargo Insurance is essentially ‘transportation insurance’, since its scope covers all movements of cargo by all modes & means of transport, where there is a contract of carriage.       Marine Insurance is required by importers, exporters, domestic sellers/buyers of goods etc or by anyone who stands to lose financially if the goods are damaged or lost.
 2) What are the type of policies ?
      Three different type of policies are individual Policies, open covers and open policies cover risks related to transportation by sea, air and land.
 Individual Cargo Policies:-
    Under individual policy a cover is taken for a specific voyage and policy is valid for that voyage.
   Under Marine Cargo open covers contract to provide automatic protection and premiums are paid as and when dispatches takes place. Certificate is issued for individual shipments.
    Under Marine Cargo Open Policies (Annual Policies), all shipments get automatically covered. Insured has to give periodic declaration of the dispatches made.
3) What are the types of covers available ?
   International trade covers are broadly covered under three clauses viz ICC(A), ICC(B) and ICC(C) Institute Cargo Clauses (A)This is the widest possible cover which covers ‘all risks’ of loss of or damage to the subject matter (i.e. Cargo), except for a few standard exclusions. Institute Cargo Clauses (C)This is the most restricted clause and covers only: loss or damage reasonably attributable to; Fire and lightning, loss due to general average sacrifice or jettison, discharge at port of distress, collision or contact of vessel or craft with any external object etc Institute Cargo Clauses (B)This cover is similar to ‘C’ Clause, but in addition covers:
Total loss of any package when loading or unloading onto a craft or vessel or during transit, entry of water (from sea, lake river etc) into craft or vessel or storage at port, loss due to washing overboard.
 4) What a ITC Clauses ?
   Inland Transit Clause (ITC, applicable within India) are applicable for transit by road/rail/inland waterways. ITC also has three type of clauses viz ITC(A), ITC(B) and ITC(c) and these are similar to ICC clauses. ITC (A) is an all risk cover and ITC(C) has least covers. ITC(B) has an intermediate cover.
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5) What are General Exclusions in Marine policy ?
     Some of the exclusions are :
         Willful misconduct of the insured, loss or damage due to inherent vice of the commodity shipped, loss due to wear and tear, loss due to delay, inappropriate packing, financial default of the carriers, loss due to nuclear weapons. Loss due to war is covered in ICC clause whereas it is not covered under ITC clauses.
6) What is the procedure to make a claim if there is a loss of or damage to cargo ?
     In the event of loss or damage which may involve a claim under Marine Insurance, immediate notice of such loss or damage must be given to the Insurance Company/Surveyors named in the policy/certificate. The Insurance Company/Surveyors named in the policy/certificate will arrange a Survey Report .
7) What are the documents required when making a claim ?
     To enable claims to be dealt with promptly, theassured or their agents are advised to submit all available supporting documents without delay, including when applicable:
  •  Original policy or certificate of Insurance.
  •  Original or copy shipping invoices, together with shipping specification and/or weight notes.
  • Original bill of lading and/or other contract of carriage.
  •  Survey report or other documentary evidence to show the extent of the loss or damage.
  •  Landing account and weight notes at final destination.
  •  Short-landing certificate.
  •  Repair estimate.
  •  Correspondence exchanged with the carriers and other parties regarding their liability for the loss or damage.
8) Why one should purchase a marine policy through an insurance broker ? 
   Marine insurance is a complex subject and requires a thorough understanding of various laws and market developments. As a broker firm has a qualified pool of personnel, it can correctly guide the insured in various aspects before taking the policy. Also a broker is generally capable of providing correct assistance in claim settlement and in providing the adequate covers at the right price to the insured.
The above FAQs have been designed in the Indian context and may or may not be valid for insured residing in other countries.