How to ensure you get the right form of Marine Insurance

November 1, 2021 /

There are three main types of marine insurance, ship or hull insurance, cargo insurance and freight insurance. There are many benefits to purchasing marine insurance, especially when dealing with goods.

What is it?

Marine insurance provides coverage against any losses that can occur from unforeseen events while at sea. Marine insurance can provide cover for all kinds of events at sea, including physical or structural damage to the ship caused by collision, damage to property onboard and bodily injuries, and in case of being stranded on the boat, marine insurance covers towing, assistance and gas delivery.

It can also cover the ship and the cargo if any problems are faced while transporting goods, it will also cover any liabilities in the event of damage or loss of any goods.

Marine insurance was one of the earliest forms of well-developed insurance, with origins from Greek and Roman times.

Why is it important?

The truth is anything can happen at sea. Whether that be damage to your ship, the cargo or even crew or passengers. Therefore, it is incredibly important to ensure that you are covered for any event that may occur while transporting goods at sea.

Marine insurance is one of the main forms of insurance of the modern world, and it has been this way for centuries. Marine transport and transportation via sea still remains one of the main transportation methods, which is why it is so important to ensure that you have marine insurance. Without marine insurance, you may open yourself or your company up to huge losses. Anything could happen at sea, so the risk should be avoided.

How does it work?

How to calculate marine insurance

The equation for calculating a marine insurance premium is the shipment value and the cost of freight plus 10% of the total cost multiplied by the amount with the quoted premium and this will equal the amount payable as premium.

Types of policies

  • Floating Policy - In marine insurance, large exporters may opt to go for open policy, which can also be known as a blanket policy. This is instead of taking out separate policies for each shipment. An open insurance policy is a one-time policy that covers all shipment within an agreed period of time, usually a year. Usually, the exporter will need to declare the detail of all shipments made within that period of time periodically.
  • Voyage Policy - A voyage policy can only be taken for a single consignment only. Every time a shipment is sent overseas, the exporter will need to purchase insurance cover. This can mean that extra time and effort is involved with each consignment that is shipped.
  • Time policy - A time policy is typically issued for the period of a year. These can however be extended in order to complete a specific voyage.
  • Mixed policy - A mixed policy is just as it sounds, a mixture of policies. Typically, it is a mixture of 2 policies, for example a voyage policy and a time policy.
  • Named policy - In a named policy, the name of the ship is mentioned in the insurance documentation, stating that the policy that has been issued is in the name of the ship.
  • Port risk policy - This policy covers a ship while it is stationed in a port.
  • Fleet policy - This is a time-based policy that covers several ships belonging to a company or owner. This can cover even the old ships.
  • Single vessel policy - In this policy, only one ship is covered under the policy.
  • Blanket policy - In a blanket policy, the owner must pay the maximum protection amount when buying the policy.

If you have any questions about marine insurance, please get in touch.