Types of Marine Insurance in India
Introduction -
The domain of marine insurance is vast. There is a categorization of various types of Marine insurance in India.
As per the requirements and needs of the transporter, a proper type of marine insurance can be narrowed down and focus on the type of marine insurance for the transporter.
What is Marine Insurance?
Before we jump into Marine insurance, let’s understand the term “insurance.” According to the dictionary, “insurance” means where one party compensates another party against loss by a specified uncertainty. Thus, Marine insurance covers the damages or any losses done by the ships or any ships, terminals, cargo vessels, or any marine transport where goods are carried from one point to another point.
Moreover, it covers various intermediaries and provides broad coverage for all the possible risks faced by any vessels in the sea.
Marine transport faces a higher threat level than other modes of transport such as road, railway, and air modes. Perils of the sea are broad and could range from weather change, any pirate attacks, or natural hazards — the Marine Insurance Act, 1963, which is for predecessor. The English Act, Marine Insurance Act, 1906, regulates the law and principle of marine insurance in India. As per the law, all vessels connected with commercial transport should have a marine insurance policy to reduce the potential risk.
Why is Marine Insurance Necessary?
Any insurance is designed in such a way to reduce the risk of uncertainty, and it may be like damages, accidents, or loss of life.
When it comes to shipping, there are many factors involved in the operation of the ships. They could risk losing people’s lives due to perils of the sea such as natural hazards and risk of damaging to the environment such as oil spills in the sea.
Different marine insurance is compulsory for ships and their owners to ensure that it manages the risk without any monetary funds.
There are different types of marine insurance in India. They all are practical in their way for the benefit of their client.
The client can opt-in depending on the nature and scope of their business. The client can opt-in for the best marine insurance in India and enjoy the advantages of marine insurance.
Types of Marine Insurance –
There are four types of marine insurance which are given below -
1. Hull & Machinery Insurance –
The hull is known as the most prominent part of the ship. The hull is known to protect the cargo from the inside of the ship is damaged. Thus, Hull & Machinery insurance covers the damages caused by the ship due to any equipment used for functioning on the ship or cargo. The owners of the ship cover this type of insurance. The insurance covers accidents or damages caused due to explosions, earthquakes, or collisions.
2. Marine Cargo Insurance –
Marine cargo insurance is the type of insurance that covers the loss or any damage caused to the ships or any cargo during the transition. The marine cargo insurance policy has specific limitations but provides extensive coverage. For example, the ship owner can lose the claim of marine cargo insurance if the packaging of the stuff inside the cargo was defective.
3. Liability Insurance –
Liability insurance provides financial liability to the person who takes insurance under liability insurance. For example, the personal injury or death caused to any person traveling in the ship. The liability insurance covers the liabilities arising from damage or injuries to any third person traveling on the ship.
4. Freight Insurance –
Freight insurance covers the damages or losses that happened during the ship’s transit due to events that are not in the company’s control. Thus, it covers the liability of the logistics provider or shipping company.
Conclusion –
Marine Insurance has been popular from other modes of its transport. The reason is because of the broader threats faced by marine transport. Because of the perils of the sea and unforeseen weather conditions, no one can see the potential risk of marine transport. As the law of India makes compulsory, all the people that are part of marine transport should go towards an insurance policy that will be suitable for their business. There is only one certainty for the ship owners and cargo by the compensation through an insurance policy.