When you are running a business that depends on shipping goods across oceans, the last thing you want is to lose your cargo. Imagine placing your trust in a shipping container, watching it depart from the port, and then receiving the news that your goods were damaged or lost due to an accident. You not only lose the products but also the money invested in them. This is where marine insurance steps in.
Role of marine insurance in protection against cargo damage
Here are the different types of cargo damage that marine insurance covers:
- Covers physical loss: When transporting your goods by sea, they face numerous risks. For example, goods might get damaged due to rough handling, or there may be instances of accidental drops during loading and unloading. Marine insurance comes in handy here by helping you financially recover from such physical losses.
- Natural calamities: Natural disasters such as storms, tsunamis, heavy rainfall, or cyclones are common on sea routes. What if your cargo ship passes through a cyclone-prone area one day, and the goods get drenched or thrown overboard due to rough waves? The insurer will compensate for such losses.
- Piracy and theft: In international waters, vessels may pass through high-risk areas prone to piracy incidents. If pirates hijack a vessel and steal part of the shipment, the insurer will compensate you for your losses.
- General average losses: During a storm, the ship operator may need to jettison some onboard containers to stabilise the vessel. In such scenarios, the insurer will compensate for the sacrificed cargo.
- Fire incidents: Ships carry multiple cargo loads, including flammable materials. A fire outbreak on a ship can spread rapidly, affecting multiple containers, including yours. Even if your goods are not the source of the fire, the insurer will still compensate you for your losses as per the policy agreement.
- Container damage: On the sea route, goods are stored in containers. However, these containers are exposed to stacking pressure, crane handling, and severe weather, which can lead to container collapse or deformation. If the cargo inside a container gets crushed, tilted, or flooded, the goods might suffer internal damage. Marine single transit insurance covers such losses.
Conclusion
Marine insurance protects cargo from various risks during sea transport. It covers physical losses caused by rough handling, accidental drops, and natural calamities like storms and cyclones. Additionally, it safeguards against piracy incidents and compensates for general average losses when cargo is sacrificed to stabilise a ship. Furthermore, the cargo damage claim applies to fire outbreaks and container damage.
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 on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.