What are the Special Features of Marine Insurance Policy In India

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8 Features and Advantages of Marine Insurance Policy

Marine insurance plays an important role in any kind of shipping business by safeguarding you against the risk of damage or loss to cargo, ships, or any transport by which the goods or property is transferred, acquired, or held between the points of origin and the final destination. There are various types of marine insurance policies in India that can suit different needs and requirements. Availing the best online marine insurance policy can help businesses to mitigate the financial pitfall that can happen due to loss or damage of goods in transit.

What is Marine Insurance Policy?

Marine insurance is an agreement between the insurer and assured where the insurer undertakes to indemnify the assured under Section 3 of the Marine Insurance Act 1963. Marine insurance covers the loss or damage of ships, terminals, cargo, and any transport by which goods are transferred, acquired, or held between the points of origin and the final destination.

Here Are the Special Features and Benefits of Marine Insurance Policy

8 Special Features and Benefits of Marine Insurance Policy

1. Proposal and Acceptance

It is based on a general proposal and acceptance concept. Coverage of risk will start from the date of acceptance of the proposal by the insurance company. Any loss or damage to goods in transit occurring prior to the date of acceptance of the proposal will not be covered under the marine insurance policy.

2. Payment of Premium

Marine insurance cover will also start from the date of payment of the premium. If the payments are made in a cheque, the date of realization of money will be considered for providing the risk coverage.

3. Contract of Indemnity

Marine insurance is a contract of indemnity. That means, the insurance company is liable to compensate only till the extent of the actual loss suffered. There is no liability lies on the part of the insurance company if there is no actual loss suffered. For example, let’s say an insured has a marine insurance policy for Rs.25 lacs. In the event of loss, the actual loss was estimated as Rs.15 lacs. In this case, the insured will not receive compensation of more than Rs.15 lac even if the coverage is Rs.25 lac.

4. Insurable Interest

Marine insurance gets applicable only if the insured has an insurable interest in the subject matter (insurable property) at the time of loss. The requirement of insurable interest to be present only at the time of loss makes the marine insurance policy ‘freely assignable’. The policy can be assigned freely prior to or after the occurrence of damage or loss unless the terms and conditions of the policy restrict it.

5. Utmost Good Faith

Marine insurance policies work on the principle of utmost good faith. The owner of the goods or property to be transported must disclose all the required information accurately to the insurance company at the time of availing the marine insurance. Non-disclosure, misdescription, or misrepresenting of facts and information by the insured makes the marine insurance policy voidable at the time of claim.

Also Read: Procedure & Documentation Required for Claiming Marine Insurance in India

6. Principle of Subrogation

Marine insurance policy works on the principle of subrogation. But the right of subrogation arises only after the payment has been made to the insured. After settling the marine insurance claim, the insurer holds all the right to sue the third party who is responsible for the loss. In this case, an insurer can recover the amount of compensation paid to the insured from the third party. The aim of the principle of subrogation is to ensure that the insured receives the compensation only for actual loss suffered.

7. Principle of Contribution

The principle of contribution applies in the case of multiple marine insurance policies. Losses will be paid proportionately if the insured holds multiple policies for his goods or property. For instance, goods worth Rs.40 lac are insured with two different insurers. And there is a loss of goods in the marine event, the total amount of loss will be compensated to the insured proportionately by both the insurance companies.

8. Comes with Warranty

A Marine insurance features is that its policies come with a warranty which is a legal undertaking between an insurance company and the insured. It’s basically a legal obligation by the insured. Marine insurance policy stands cancelled or terminated as soon as there is a breach of warranty. Warranty can be an express warranty that is expressly included in the policy or can be an implied warranty that is not included expressly in the policy but is assumed and understood by both the parties in the contract.

What are the features-advantages of the Marine Insurance Contract?

  • The insurance provides financial stability to the business in Case any mishappening
  • Helps manage the risks and operate business without any worries
  • It compensates for any financial loss that Business faces during the transit of goods
  • Mitigate the risk in cargo theft
  • To Increase cases related to containers lost at sea every year

Some of the Perils Covered Under Marine Insurance Policy Are:

  • Fire and explosion
  • Perils of the sea
  • Jettison
  • Breakage
  • Accident
  • Theft
  • Barratry
  • Non-delivery
  • Pilferage

Types of Marine Insurance Policy

There are 4 types of Marine Insurance, which are as follows:

  1. Freight Insurance
  2. Liability Insurance
  3. Hull Insurance
  4. Marine Cargo Insurance

Conclusion

To conclude, marine insurance policies ate loaded with many features. With a variety of marine cargo insurance policies available out there as per the specifications, need and requirement, getting the customized marine insurance plan to suit the business requirement is all the more important to mitigate the risk efficiently.

Choose wisely!

FAQs on Marine Insurance Policy Special Features India

What is marine insurance policy?

Marine insurance covers the loss or damage of property being transferred via ships, cargo, terminals, or any other mode of transport. When you transfer your acquired or held property from one point/location and the final destination, you can secure the property by means of marine insurance. This insurance coverage is not limited to transportation via sea only. Some plans offer coverage for rail, land and air transport as well.

What are the two types of marine insurance?

The various types of Marine Insurance are namely:

# Marine Cargo Insurance
# Liability Insurance
# Hull Insurance
# Freight Insurance

What are the features of marine insurance?

Below are some features of Marine Insurance:

# Comprehensive Coverage
# Easy Customization to help meet your requirement
# Flexibility in terms of options
# Claim survey and settlement Assistance
# Extension of Coverage

What are the 5 principles of marine insurance?

The five fundamental principles of Marine Insurance include:

# Indemnity
# Insurable Interest
# Utmost Good Faith
# Proximate Cause
# Subrogation and Contribution

Who needs marine insurance?

You need marine insurance if you want to ensure the safety of your costly items while they are being transferred. Among the ones who need a marine insurance include import/export merchants, contractors, banks, buyers and sellers. Anyone engaged in the import and export of goods or transportation of it within or outside the country can buy marine insurance.

Is marine insurance mandatory?

Marine insurance is mandatory for owners of all ship and yacht. Especially if the owner uses the vessel for commercial or transportation purposes for carrying passengers, workers, or cargo across international waters.

How is marine insurance calculated?

To calculate marine insurance:

# First, you must determine shipment value or the cost of freight.
# Here, you can add 10% for the escalation costs.
# The total value thus obtained and is multiplied by the insurance premium, and quoted by the insurance provider.
# The final value that is received is calculated as the amount to be payable as a premium

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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