Marine Insurance

The international business carries significant risks. The importing and exporting of goods can expose you to massive financial losses in case your international shipments gets damaged or destroyed in transit.

Catering to both importers’ and exporters’ needs, the coverage is comprehensive and flexible with international shipments protected from the time the goods leave the seller’s warehouse until they reach the Buyer’s warehouse.

The party usually responsible for insuring the goods is determined by the sales contract. To help you familiarise yourself with the Buyer’s and seller’s responsibilities, This Policy can extend in respect of the most common sales contracts, i.e. ex-Works, Free on Board(FOB), Cost and Freight (CFR) and Cost Insurance and Freight (CIF).

The Marine Cargo Insurance offers four types of covers

Institute Cargo Clause (A)
  • The widest form of cover under Marine Cargo Insurance in so far as it relates to the perils covered. ICC (A) is an unnamed perils clause.
Institute Cargo Clause (B): Named Peril basis.
This cover is similar to ‘C’ Clause, but in addition covers:
  • Earthquake, volcanic eruption or lightning
  • Washing Overboard
  • Entry of sea, lake or river water into the vessel, craft, hold, conveyance, container, liftvan or place of storage
  • Total loss of any package lost overdoard or dropped whilst loading onto, or unloading from, vessel or craft.
Institute Cargo Clause (C): Named Peril basis
This is the most restricted clause and covers only: loss or damage reasonably attributable to
  • Fire or explosion
  • Vessel or craft being stranded grounded sunk or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than wate
  • discharge of cargo at a port of distress and loss or damage caused by – General Average Sacrifice / Jettison.
Institute Cargo Clause (Air)
Extensions - Various clauses can be added on depending upon the nature of the goods being carried. The Institute Cargo Clauses comprise a range of covers from the most comprehensive ones such as (A) Clauses to the basic minimum protection available termed (C) Clauses.
Additional cover can also be provided for the following:
  • Loading and Unloading
  • Customs duty
  • Removal of debris
Sum Insured This is an agreed value policy. Normally, the insurance is taken for CIF +10%.
Premium The insurance rate depends on a variety of factors such as the nature of the cargo, scope of cover, packing, mode of conveyance, distance and past claims experience.

Types of Marine Policy

01 Open Policy
If you're at fault in an accident, liability covers damages you cause. That could mean damage to other vehicles, property (mailbox, street sign, house, etc.), or even other drivers'/passengers' injuries. Plus, liability covers you if someone sues you over an accident.
02 Open Cover
This policy covers all the marine sendings of a client in a 12 month policy period where the voyage involved is import or export.
03 Specific Voyage or Time Policy
These policies are issued to firms that require coverage for a specific voyage. It is suitable for those firms who seldom require marine cargo policies in the course of their trade.

These policies are issued on a "from and to" basis and the cover commences once the goods leave the place of origin named in the policy and terminates on delivery at the place of destination.

Sometimes these policies are also issued in terms of duration of the voyage, in which case the cover commences on the date and time specified for the same in the policy. Inland specific transit will exclude terrorism.
04 Duty Insurance Policy
Customs duties form a major part of the cost of imported goods. Once the goods land at the port of destination custom, duty becomes payable.

In case the goods are damaged during the transit from the port to the importer's warehouse, the CIF value is not sufficient to represent the actual value of the goods since the custom duties should have already been paid.

This additional element of cost can be covered by a duty Insurance Policy. Claims under a duty policy are only payable if the claim is otherwise admissible in the marine cargo policy covering the goods.

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