Scope of Marine Insurance in India: A Comprehensive Overview

The growth of international trade and e-commerce has significantly increased the reliance on transit services. This exposes businesses as well as individuals to unforeseen risks.

For this reason, businesses engaged in shipping operations require specialised protection, which marine and transit cover insurance adequately offer.

This post provides a detailed breakdown of the nature and scope of marine insurance in India, highlighting its meaning, inclusions, exclusions and importance of marine insurance.

What is a Marine Insurance Policy?

A marine insurance policy is a type of insurance policy that covers policyholders against transit-related risks, offering the required protection to businesses and individuals.

Under marine insurance, the insurer provides financial coverage to the policyholder in exchange for a fixed premium, enabling them to manage losses, damages or liabilities that may occur during the transit of cargo by air, land or waterways.

Marine insurance offers comprehensive protection that effectively addresses the uncertainty associated with transportation. It ensures the financial stability of the policyholder while supporting business continuity even during unexpected disruptions.

Marine insurance is particularly suitable for:

Nature and Scope of Marine Insurance

Marine insurance is a contractual agreement between an insurance company and a business or individual. It transfers transit-related risks from the policy buyer to the insurance provider, providing financial security and peace of mind.

A marine insurance policy relies on the principle of utmost good faith. Thus, policyholders are required to disclose accurate and relevant information to the insurer.

Typically, the scope of marine insurance policy extends to:

• Perils of the Sea: The term “perils of the sea” represents natural hazards (including collision, wreckage, flooding, storm damage, stranding and sinking) that can result in loss or damage during transit.

A marine insurance policy provides coverage against these perils, compensating policyholders for losses incurred from such disasters.

• War and Strike Risks: While war and strike risks are usually not covered by marine insurance, they can be specifically included in the policy to extend marine insurance coverage.

A marine insurance policy covering these risks offers additional financial support in the event of war, strikes, piracy, civil unrest and other conflicts.

• Freight: Some marine insurance policies may also cover freight-related losses incurred because of cargo damage, partial or delayed delivery or breach of contract.
• Salvage Charges: Marine insurance can also include coverage for salvage costs incurred during emergencies. This ensures shared safety of transport, cargo and the parties involved, minimising losses for the stakeholder.

Note: Marine insurance inclusions vary significantly depending on policy type. For precise policy information and specific details, consult your insurance provider.

 What is not Covered by Marine Insurance in India?

Some common exclusions of marine insurance in India include:

• Rust, Discolouration and Oxidation: Oxidation and discolouration of unpacked, unprotected and uncrated goods are not covered under marine insurance.
• Water Damage: Damages resulting from changing water table levels are excluded.
• Mechanical Breakdown: Electrical or mechanical failures remain excluded from marine insurance unless they are caused by covered perils.
• Environmental Damage: Damages caused due to temperature fluctuations and atmospheric or climate changes are not included in the marine insurance coverage.
• Specific Theft-Related Losses: Theft without forced/violent entry or exit, insider theft, losses or theft from exhibition stands during operating hours, unexpected disappearances of the insured property and theft from policyholder’s own vessels are excluded.

How to Buy a Marine Insurance Policy in India?

1. Open the official website of a reputed insurer like TATA AIG.
2. Navigate to the main menu, click on the “Business” option and select “Business Cargo Insurance”.
3. Mark the “New Customer” option and enter the commodity type.
4. Select the type of voyage (i.e., domestic, import or export) and mode of conveyance.
5. Enter the invoice value and your mobile number. Mark the T&C checkbox and click on “Get Plan”.
6. Enter the OTP received to view available insurance quotes and get a marine insurance overview.
7. Read the policy terms and conditions. Then, select a suitable quote and make the payment.
8. Upon verification, your insurer will send a copy of your marine insurance policy to your registered email address.

Wrapping Up

Marine insurance coverage plays a vital role in promoting secure, risk-free transits and empowering shipping-related businesses to operate with confidence.

By providing compensation to policyholders for mitigating transit-related risks, such as cargo loss, vessel damage, third-party liability, piracy or terrorism incidents and natural disasters, this insurance plan facilitates seamless recovery from financial losses.