Marine insurance is not a new sort of insurance, although it has been available for many years. Aside from that, it has evolved as commerce has expanded.
Marine insurance is inextricably linked to international trade. There is commerce that includes ships travelling from one location to another. This method of transporting things from one place to another is dangerous. Marine insurance is essential because it protects the ship and the cargo it is carrying vs any loss or damage.
Importance
Many import-export commerce transactions require marine insurance. Accepting the agreements, both parties are responsible for paying for items covered by insurance. However, the issue of maritime insurance extends beyond contractual requirements, and there are various compelling reasons to purchase it before launching the export cargo.
How does it work?
Marine insurance is the best way to transfer the products’ liability from the parties and go-betweens involved to the insurance provider. The carrier may be liable for any damages or losses sustained by the products while on board, whether an aircraft or a shipping business. To comply with contracts such as cost insurance and freight (CIF) or carriage and insurance paid, the exporter must get maritime insurance (CIP).
Some schemes are: –
- Insurance for Freight
In freight insurance, the operator would lose freight receivables if the items are destroyed in transportation. Thus the insurance will cover compensation for freight loss.
- Insurance for Liability
Marine Responsibility insurance is purchased to cover any liability that may arise due to a ship collapsing or crashing.
- Insurance for Hulls
The hull of the delivery trucks is covered by hull insurance. It protects the vehicle from harm and mishaps.
- Insurance for Marine Cargo
The insurance of commodities shipped from the countries of origin to the place of export is referred to as marine cargo policy.