Choosing the right marine insurance becomes simpler when you clearly understand how your goods are moved and the risks involved. Read on to get a brief overview of Marine Insurance and its overall scope in India. Marine insurance covers goods in transit, helping businesses manage financial losses from unexpected events during transport. Any party with an insurable interest, such as manufacturers, traders or logistics providers, can take this cover, subject to policy terms and conditions.
Types of marine insurance
Based on the policyholder's requirements and scope of coverage, four basic types of marine insurance plans are available in the market. Let's learn briefly about each one of them:
- Marine cargo insurance: Marine cargo insurance provides protection against the damages caused to the cargo during its transit. It can be due to mishandling of the cargo during loading or unloading at the respective terminals or to an accident during the commute. This type of insurance is beneficial for the ships involved in heavy cargo shipments.
- Hull and machinery insurance: A hull insurance policy mainly provides coverage against any damage to the ship, including its furniture and articles. Ship owners primarily take this type of insurance to safeguard their costly ships against various incidents. In addition to hull insurance, one can opt for machinery insurance to cover the ship's machinery.
- Freight insurance: The freight insurance policy provides financial security to shipping companies against the risks of loss or damage to freight during its shipment. It means that if freight is lost or damaged due to an unforeseen peril during transportation, the insurance will pay for the resulting financial losses.
- Liability insurance: A crash, collision or attack on a ship may significantly damage life and property. It may incur huge liabilities for the ship owners and other stakeholders towards their employees and customers. A liability marine Insurance policy indemnifies the ship owners of any such liabilities that may arise due to circumstances that are not under their control.
Marine insurance market in India
India’s marine insurance market has grown with the country’s increasing reliance on domestic and international cargo movement. However, despite higher trade volumes, penetration remains relatively low compared to the overall trade ecosystem. Premium trends have been inconsistent, influenced by global trade conditions, competitive pricing, freight fluctuations and shifting shipping patterns.
Demand is mainly driven by imports and exports. While large businesses usually insure shipments regularly, many small and medium enterprises still underinsure or cover only selected consignments. This leaves them exposed to transit risks, especially amid geopolitical tensions, weather-related disruptions and evolving trade routes.
How businesses can choose the right marine insurance
Choosing the right marine insurance begins with assessing logistics and risk exposure. Businesses should consider the mode of transport, the nature and value of the goods, packaging standards and shipment frequency. The intermediary's experience and the insurer’s claims-handling reputation also matter. For occasional shipments, single transit insurance policies may be more suitable.
How marine insurance has safeguarded Indian exports/imports
Marine insurance supports Indian trade by offering financial protection when goods face disruptions during transit. Since shipments pass through ports, warehouses and multiple transport stages, the cover helps exporters and importers manage losses and maintain supply-chain continuity, reducing financial stress during unforeseen events.
Conclusion
As India’s trade continues to expand, marine insurance remains an important risk management tool. Businesses that align coverage with shipment patterns are better positioned to ensure smoother cargo movement and long-term trade stability.
FAQs
1. What does marine insurance generally cover?
It provides financial protection for goods during transit, based on policy terms.
2. Is marine insurance mandatory for every shipment?
No, it depends on the value of goods and risk appetite.
3. Can small businesses buy marine insurance?
Yes, policies are available for different shipment sizes.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.