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Marine Transit Insurance

What is Marine Transit Insurance?

Marine Insurance is a type of insurance that provides coverage against the losses or damages of cargo or goods during transportation between the points of origin to the final destination. Marine insurance policy provides coverage for all means of transportation example road, railway, air, sea, couriers and postal service. Marine Cargo insurance primarily covers loss during transit caused due to fire, explosion, hijacks, accidents, collisions, and overturning. We offer specially curated plans for covering the risk of theft, malicious damage, shortage, and non-delivery of goods, damages during loading and unloading, and mishandling of goods/cargo. The insured can choose the coverage based on specific business requirements. The policy is available for a variety of cargo/goods if you are dealing in or manufacturing them.

Who needs Marine Transit Insurance?

Having this policy is essential for businesses and individuals alike. Business shipments are usually high in value and any damage can directly impact business. When it comes to an individual, relocation is regarded as one of the most stressful life events, be it for job change or marriage. Whatever your reason may be for transporting your goods, our policy protects your goods against material damages.

Why should you buy Marine Transit Insurance?

As a businessperson your goods are of immense value to you. It’s your source of revenue. Insuring your goods against any untoward incident, while they are being transported, means securing your own future & business. If you’re an individual and making a move due to personal or professional reasons, you’re likely to be worried about a lot of things already. Your household items no doubt have memories attached to them and you have painstakingly collected each thing as you’ve moved ahead in life. Knowing that all your stuff is safe means you can breathe easy about this one thing at least.


What is Covered in Marine Transit Insurance?

All the modes of transportation namely, air, water, rail & road are covered under this policy. Goods being transported via courier services are also insured. Your goods in transit will be protected against vehicle collision, overturning, derailment, or accidents happening anywhere from the source to destination. This coverage can also be extended to loss or damage of goods due to theft, strike, riots, terrorism, and other hostile acts by human by opting for appropriate coverage as per one’s needs.

Get answers to common questions about Marine Transit Policy
Following types of covers are available:For Import and Export Transits:
  •   Institute Cargo Clause – A (All Risk)
  •   Institute Cargo Clause – B (Named Perils/ Basic Cover)
    • For Inland (Transit within India):
  •   Inland Transit Clause – A (All Risk)
  •   Inland Transit Clause – B (Named Perils/ Basic Cover)
Risk All Risk Basic
Fire, Lightening or Explosion Yes Yes
Overturning or derailment of vehicle Yes Yes
Earthquake or Volcanic Eruption during transit Yes Yes
Collision between 2 Vehicles Yes Yes
River or lake water entering cargo Yes Yes
Damage/Loss to goods during loading & unloading Yes No
Damage/Loss to goods during handling of goods in transit Yes No
Theft or malicious damage Yes No
Shortage or non-delivery of goods Yes No
Hijack of goods Yes No
Any other risk not specifically excluded Yes No

They determine the point of change of responsibility between the buyer and seller. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer

Some commonly used Inco Terms:

Ex Works (EXW): Seller has to place the goods at the disposal of the buyer. Carriage and Insurance are arranged by buyer

Free On Board (FOB): Seller delivers when the goods pass the ship’s rail at the named port of shipment. This means the buyer has to bear all costs &risks to the goods from that point

Cost, Insurance, Freight (CIF): The seller delivers when the goods pass the ship’s rail in the port of shipment. The seller must pay the cost & freight necessary to bring goods to the named port of destination, but the risk is transferred from seller to buyer

Other INCO Terms used in the market :

Rules for Any Mode (or modes) of Transport

  • CIP - Carriage and Insurance Paid
  • CPT - Carriage Paid To
  • DAP - Delivered At Place
  • DAT - Delivered At Terminal
  • DDP - Delivered Duty Paid
  • EXW - Ex Works
  • FCA - Free Carrier

Rules for Sea and Inland Waterway Transport Only

  • CFR - Cost and Freight
  • CIF - Cost, Insurance and Freight
  • FAS - Free Alongside Ship
  • FOB - Free On Board
Note: New Incoterms 2020 has been published recently
  •   Wilful Misconduct of the Assured
  •   Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject-matter insured Ordinary leakage, ordinary loss in weight or volume or ordinary wear and tear of the subject-matter insured
  •   Insufficiency or unsuitability of packing
  •   Inherent vice or nature of the subject-matter insured
  •   Delay
  •   Insolvency or financial default of owner, manager, charters or operators of the vessel
  •   Unfitness/ Unseaworthiness of carrying conveyance
Below are some general conditions or warranties attached to a marine insurance policy:
  •   Rusting, oxidation, discoloration and corrosion are excluded unless caused by ICC(B) perils
  •   Institute Replacement clause
  •   Pair and set clause
  •   Second hand Replacement clause
  •   Excluding Mechanical, Electrical and Electronic derangement unless caused by ICC (B)/ITC (B) perils
  •   Over Dimensional Cargo Survey Warranty
  •   Warranted that losses due to adulteration, contamination and deterioration of quality is excluded
  •   Warranted that goods are transported in closed wagons and/or trucks to be covered with tarpaulin or any other water proof material to avoid ingress of water
Marine Cargo insurance / Transit Insurance covers the loss or damage of cargo / goods in ordinary course of transit between the points of origin and the final destination Marine insurance covers Movement of goods from one place to another:
  •   Within the country(Inland)
  •   From India to Country outside India(Export)
  •   From Country outside India to India(Import)
Any person with insurable interest in the goods in transit can insure. Further the policy can be assigned freely to any person who acquires insurable interest during transit of the cargo
  •   Exporters.
  •   Importers
  •   Manufacturers
  •   Traders.
  •   Merchant Exporters
  •   Contractors of Projects
  •   Logistics Operators
  •   C&F Agents
The types of cargo / commodities are:
  •   General Cargo: Ex. Furniture, spare parts, footwear, electronic items, food items, textiles etc Metals: Plastic, iron and steel rolls, leather
  •   Machinery: Ex. Standard size in containers. oversize in bulk or open top containers Liquid Bulk Cargo: Ex. Crude oil, edible oil, etc
  •   Dry Bulk Cargo : Ex. Coal, grain, ore and other similar products in loose form Above commodities / cargo can be covered depending on the risk involved in it
Per Sending limit represents the maximum sum insured amount that in the event of a claim of any one consignment or shipment whilst the goods are in ordinary course of transit
Sum insured is the total value of the goods in transit including freight, taxes and any other port handling charges. This is the maximum amount which is payable in the event of a total loss of the insured cargo The sum insured will comprise of the following:
  •   Cost of the goods either on (CIF)/FOB/C & F (Depending on the INCO term)
  •   Clearing charges and internal freight
  •   Customs Duty
Perils of the sea means fortuitous accidents or casualties of the seas, but does not include ordinary action of the wind and waves

Partial Loss (Particular Average) : Particular Average means partial loss of the subject matter insured although not appearing in the Clauses directly, all three sets of ICC covers particular average in full

Total Loss : The goods are completely destroyed. The assured is irretrievably deprived of the goods. The goods are no longer the thing insured (loss of specie). The goods are on a ship that has been posted as missing. Total loss can be an Actual Total Loss or Constructive Total Loss

General Average (GA) : This occurs when the insured goods are partly or totally sacrificed in a general Average act. Provided the GA does not arise from any of the exclusions expressed in the Clauses, the underwriter is liable for the sum insured if the sacrifice results in a total loss of the goods or the proportion of the sum insured produced by applying the percentage of depreciation caused by the sacrifice to the SI (Sum Insured), if only part of the goods is sacrificed

GA (General Average) is a sacrifice or expenditure made or incurred by one of the parties to the maritime adventure for the purpose of saving all of the property insured in such maritime adventure”. All loss which arises in consequence of extraordinary sacrifice made or expenses incurred for the preservation of the ship and cargo comes within general average and must be borne proportionately by all who are interested
  •   Invoice copy
  •   LR (Lorry Receipt) copy
  •   Final Repair Bill
  •   Photographs (In case of damage claim)
  •   Risk Location Repair Estimate (If repairable) claim
  •   Shortage Certificate (In case of shortage
  •   FIR copy
  •   Driving License, RC Book of transporters Vehicle
  •   Salvage Bill
  •   Discharge voucher
  •   Any other document as specified by the Insurance Company

Marine Single Transit Policy

  •   Covers single consignment from one location/port to another location/port
  •   It is suitable for those firms who seldom require marine cargo policies in the course of their trade

Marine Open Declaration Policy: (MOP)

  •   Covers single consignment from one location/port to another location/MOP is an annual arrangement between the insured and the insurer to provide coverage to all the shipments/transits on pre-arranged terms and conditions for a particular leg (Domestic/Import/Export)
  •   Open inland policy is a declaration based policy where insured has to make periodic declaration (Monthly) of sum insured utilization
  •   Certificates are issued for individual transits and are treated as sum insured utilization for open import/export policy
  •   Insurer’s maximum liability is restricted to a pre agreed limit per sending and limit per location
  •   Policy period of one year at an initial Sum Insured which can be enhanced during the duration of the policy

Sales Turnover Policy:

  •   It’s a wider form of Marine Open Policy and is issued on the basis of annual sales turnover – both domestic and exports, all transits/voyages deemed to be held covered without specific declaration. (Import, Export or Inland)
  •   Sum Insured and premium is based on the estimated annual Sales Turnover of goods movement under various legs of transit
  •   Certificates are issued for individual transits
  •   Basic Client Information
  •   Type of Cover (All risk (A) or basic coverage (B))
  •   Policy Duration
  •   Nature of Commodity and its description
  •   Value of cargo (Sum Insured)
  •   Custom Duty (In case of Import)
  •   Packing Description
  •   Mode of Conveyance (Sea, Air, Rail, Road or Courier)
  •   Claim Experience
  •   Basis of Valuation
  •   Per Sending and Per Location Limit