Quick Guide for Getting Marine Insurance Policy

Most industry experts believe that the concept of insurance began in the early days primarily to safeguard goods sent to different locations. The marine insurance policy which is believed to be the first of them is a must have for every company sending cargo via containers and ships from India to any other country.

The policies provide coverage for goods sent through water, air or road. The marine insurance policies are customizable as individual company’s requirement may vary. But, the primary policies are divided into two different types.

  1. Specific policy

When the organization opts for a specific policy, they are paying the premium and acquiring coverage for a specific transportation. It’s a one-time policy which protects the goods that are being transported from one location to another.

For companies which frequently ship cargo, this is not recommended. Every time, an item is shipped new terms and guidelines have to be mentioned. The policy is applicable only once.

  1. Open Cover Policy

Open cover policy provides comprehensive coverage for multiple goods transported to different locations within a specific time. For example, if the insurer and the insured agreed to transport Rs. 10 crore worth of items every day for two weeks it will be covered under an open policy.

Types of Policies

The types of policies are segregated based on the risk factor.

  • ITC-A
  • ITC-B
  • ITC-C

Most organizations prefer ITC-A which provides coverage for a wide range of possible scenarios and despite its higher premium, this type of insurance protects the goods being transferred.

Requirements for Marine Shipping Insurance

The premium varies based on the compensation requested. In a typical scenario, a company may sign an agreement with insurance coverage of 40% or 50% of the losses incurred. They will pay premium at 0.05% up to 0.15% as per terms agreed upon.

The sum paid by the sender of the goods is largely influenced by the value of the goods, transportation method, location and other factors as determined by the insurer. This is how you can spend less on your marine insurance policy.

Before successfully acquiring an insurance policy, all the essential details including

  • Name
  • Contact details
  • Type of goods
  • Mode of transport I
  • Insured sum
  • Previous premium paid

The marine shipping insurance provider will approve the policy only when essential information is provided. Online aggregators such as Paybima can simplify your search and help you find the best insurance provider.