Marine Cargo Insurance 

Marine Cargo Insurance 

Shipping cargoes by sea has always been subject to risk like weather, storms, pirates or perils of the sea.  Furthermore, there are other ordinary risks like cargo mishandling, simple negligence of stevedores during loading, moving, lashing, securing or safeguarding the cargo.

Maritime law imposes certain minimum liability on ocean carriers and ship operators who undertake responsibility to transport cargoes from one place to another. Minimum liability is merely potential liability. Minimum liability is subject to number of exceptions, exclusions, and defenses.

Under Carriage of Goods at Sea Act, cargo claim will usually be subject to limitations of liability like $500 per package Usually, minimum liability is less than the actual value of the goods. As a result, most cargo owners procure insurance covering value of the cargo. Furthermore, cargo owner is also exposed to certain risks from participation in ship voyage:

  • Ship breaks down and requires salvage
  • Goods themselves result in some harm to others due to the nature of the cargo or improper packing
  • Ship is captured by pirates and ship owner must pay a ransom for the release of the ship, crew, and cargo

Cargo owner may be subject to liability, against which the cargo owner will need to insure. Marine cargo insurance cost is really minor when compared to the value of the goods. Prudent cargo owner arranges complete and clear insurance coverage in order to avoid costly disputes over responsibility for losses.

Practically, marine cargo insurance market is well developed with numerous standard forms, clauses and practices that are well understood throughout the industry. Principally, marine cargo insurance is used to protect cargo owner against the loss or damage to the cargo due to defined risks. Furthermore, marine cargo insurance may also cover the cargo owner against certain liabilities like salvage or general average claims or other claims.

Generally, any person or company:

  • would suffer a loss if the cargo were to be damaged
  • would be exposed to liability due to some interest in the cargo
  • has a sufficient interest in the cargo

is permitted to purchase insurance on the cargo. Here above interest in the cargo is known as insurable interest. Underwriters are not willing to provide insurance to a person or company that do not have an insurable interest. Providing insurance to a person or company that does not have an actual interest in cargo would undercut the purpose of insurance and would instead be equivalent to a mere wager.

Types of marine cargo insurance policies:

  • All Risks Policy
  • Named Perils Policy

Named Perils Policy protects cargo owner against certain specified risks only. Name of All Risks Policy can be misleading. All Risks Policy have certain exclusions and exemptions denying coverage for certain risks. Most marine cargo All Risks Policy still exclude coverage for damage caused by piracy, war, civil strife, or restraint. Generally, all marine cargo insurance policies exclude loss or damage that occurs due to the misconduct of the insured person or come about due to the inherent fault of the cargo.

All Risks Policy and Named Peril Policy does not work the same way. All Risks Policy, a loss is presumed to be covered, unless insurer can show that the loss was due to an excepted cause or breached warranty. Named Peril Policy, burden of proof is on cargo owner to show that the loss was due to a covered peril.

Almost in all cases, All Risks Policy offer broadest coverage. All Risks Policy is commonly identified in the marine cargo insurance industry Institute Cargo Clauses.

Usually, marine cargo insurance policy that offers narrowest coverage is Free of Particular Average Policy (FPA Policy). Free of Particular Average Policy (FPA Policy) covers total loss of the insured goods as a result of marine perils named in the policy and only covers partial losses if caused by fire, stranding, sinking, or collision. Two types of Free of Particular Average Policy (FPA Policy) clauses are commonly used:

  • Free of Particular Average Policy (FPA Policy) American Conditions Clause only cover partial losses that can be shown to have been caused by fire, stranding, sinking, or collision
  • Free of Particular Average Policy (FPA Policy) English Conditions Clause cover losses from a peril of the sea if the ship has been stranded, sunk, burned, been on fire, or been involved in a collision during the voyage; but the insured does not need to show that the loss was caused by the fire, stranding, etc.

Standard Marine Insurance Terms:

Institute Clauses A, B and C are standard marine insurance terms adopted International Underwriting Association of London. International Underwriting Association of London was formed in 1998. International Underwriting Association of London was formed by the merger of London International Insurance and Reinsurance Market Association and Institute of London Underwriters. International Underwriting Association of London are widely utilized in place of

  • All Risks Policy
  • With Average Policy
  • Free of Particular Average Policy

Broadest marine insurance coverage is available under Clause A. Least marine insurance coverage is available under Clause C.

With Average Policy is a marine cargo insurance policy that provides greater protection to the cargo owner than Free of Particular Average Policy in that it covers partial losses caused by perils of the sea when such losses are a defined percentage of the cargo’s insured value. In addition, there are also policies which are not so limited, commonly identified as policies With Average Irrespective of Percentage Policy.

Generally, All Risks Policy exclude war related risks, piracy, strikes, riots and other civil commotions. On the other hand, war clauses and strike clauses have been developed by Institute of London Underwriters and American Institute of Marine Underwriters which are utilized to cover these risks by covering claims that would otherwise be excluded as resulting from war-related risks or due to voyages to war risk areas.

Other Institute Clauses cover specific types of cargoes like bulk oil, frozen food or coal. Generally, Marine Cargo Insurance Policy apply warehouse to warehouse. In other words, Marine Cargo Insurance Policy starts when cargo leaves shipper’s warehouse to be loaded onto the ship until the cargo is delivered to consignee’s warehouse at the destination.

Cargo owner does not need to arrange insurance for every shipment. Person or company that has multiple shipments of cargo may decide to enter into Open Policy, to cover specific types of goods under agreed standard terms and prices. Under Open Policy, insurance coverage is automatic. Cargo owner notifies the underwriter promptly of each shipment. Generally, Open Policy terms limit the amount recoverable for any particular voyage or incident.

All cargo insurance policies are not the same for all cargoes. Specifically, unique cargoes often require unique insurance policies, because unique cargoes may face unique risks. Certain industries, that produce unique cargoes, have developed specialized clauses to cover the unique nature of their cargoes. Radioactive cargoes may be insured against nuclear risks or costs of decontamination of ship in the event of spillage. Grain cargoes may be insured against water damage, mold or infestation. Fragile cargoes may be insured against breakage. Liquid cargoes may be insured against spillage.

Cargo owners are not limited to Institute Clauses. Cargo owners can always put out a request for insurance against specific risks for specific cargoes. Marine Cargo Insurance Underwriters prefer to keep their risks predictable and as standard as possible. Usually, Marine Cargo Insurance Underwriters issue proposals for coverage as requested. Marine Cargo Insurance Underwriters are likely to do so with premiums and conditions that they view necessary to reflect their risk and discomfort. If Marine Cargo Insurance Underwriters are proposing an extraordinarily high premium or overly restrictive conditions, that is a clear sign that Marine Cargo Insurance Underwriters are reluctant to say no to coverage. But, Marine Cargo Insurance Underwriters would prefer not to undertake risks.

Usually, Freight Forwarder offer to procure standard cargo insurance as part of its services and it might be reasonably practical. In some cases, when cargo owner makes multiple shipments, prudent cargo owner gets in touch with direct relationship with marine insurance broker. Marine insurance broker is often better able to shop and search insurance market and find the best coverage and rate.

Much of marine cargo insurance policies are standard. Marine cargo insurance policies are based on well-established Institute Clauses. On the other hand, each marine cargo insurance underwriter may insert unique clauses, procedures, or limitations. Regardless of whether an insurance policy is provided by Freight Forwarder, procured specially by marine insurance broker or obtained directly from insurance underwriter, prudent cargo owner should carefully review insurance policy in order to ensure that policy provides the necessary coverage.

Generally, all insurance policies require cargo owner to act with reasonable dispatch when cargo owner becomes aware of covered loss. Insurer may deny coverage if the insured cargo owner waits too long to notify the insurer of the claim. Because, insurance underwriters will typically notify surveyor or expert to evaluate the claim and determine whether insurance underwriters may pursue ship owner or others to recoup some portion of the damages.

Besides prompt notice, cargo owner will also be required to provide reasonable cooperation to the insurance underwriters in their investigation of the claim. Cargo owner is required to provide the insurance underwriters’ surveyor:

  • Complete file on the claim
  • Original bills of lading
  • Waybill
  • Commercial invoice
  • Packing list
  • Customs submissions
  • Mate’s Receipt
  • Survey reports
  • Other related documents

What is Marine Cargo Insurance?

Marine cargo insurance entails safeguarding property during its transportation from one location to another. The term “marine” evokes images of the sea, which was the foremost concern of the authors of the Marine Insurance Act 1906 (MIA). While the initial sections of the Act pertain to “marine losses,” “marine adventures,” and “maritime perils,” insurance departments also cover property conveyed by air, road, and rail vehicles. Numerous journeys, particularly international ones, involve multiple modes of transport, and the Act accommodates such situations. Therefore, marine cargo insurance constitutes a category of property insurance that protects property in transit against loss or damage resulting from perils associated with sea or air navigation, as well as subsequent land and inland waterway transportation. The Act does not explicitly mention air travel or purely land-based journeys. Consequently, to ensure the Act’s applicability to all forms of transportation, it is customary to include a clause in the policy document affirming its authority under all circumstances.

“Maritime perils” denotes perils consequential to or incidental to the carriage of property by sea. This encompasses perils such as sinking, stranding, collision, fire, war perils, piracy, theft, capture, jettison, washing overboard, and “…any other perils either of a similar nature or as designated by the policy.”

The inclusion of this final sentence empowers insurers to incorporate additional risks at their discretion in their policies. For instance, risks relevant to other modes of transportation, such as crashes, derailments, and overturning, can be covered. It should be noted, however, that the ordinary actions of wind and waves are not considered perils of the sea. So, what precisely constitutes the “property” that marine cargo insurance covers? The Act refers to it as the “subject-matter insured.” Essentially, it can be anything being transported from one place to another. Most commonly, it includes raw materials and components being received by the assured, or finished products being dispatched.

The category for this type of property is “Goods and/or Merchandise,” indicating traded goods. Additionally, the assured’s own equipment can be insured, such as machinery, office furniture, samples, engineers’ tools, and exhibition materials. In fact, almost everything that has been transported and, consequently, can be insured falls under the subject matter insured within a marine cargo policy.


Who can provide insurance for marine cargo?

As per the Marine Insurance Act 1906 (MIA), section 5, any individual possessing an insurable interest has the authority to insure their interest under a marine policy. This raises the question of who possesses an insurable interest. The Act further states that a person is deemed “interested” when they have a legal or equitable relation to the venture, which enables them to benefit from the safe arrival of the property or suffer a loss due to its damage.

Let’s consider the scenario of a manufacturer who sells their goods. The manufacturer has an insurable interest in these goods, even when they are in transit, until they receive payment for them. Until the point of payment, they are positioned to gain from the success of the venture or face losses if it fails. Therefore, they are eligible to insure their interest under a marine cargo policy.

Similarly, the buyer of the goods also possesses an insurable interest, or more accurately, an expectation of receiving one, and can thus secure marine insurance. According to the Act, the assured (distinct from the term “insured”) must have an interest in the subject-matter being insured at the time of loss, although they need not be interested at the time of effecting the insurance (Marine Insurance Act section 6). Hence, in the event of damage to property during transit, it is essential to determine, based on the terms of sale or purchase, which party held the insurable interest at the time of loss.

Apart from the buyer and seller, other concerned parties may also insure their insurable interest up to its extent. For instance, shipping and forwarding agents, carriers, and other bailees who have been entrusted with the care and custody of the property, as well as charterers and hirers of ships, all possess an interest in the venture to the extent that they can be held liable for failure to deliver.

Interestingly, the Act mentions insurers who, by virtue of their policy, have a vested interest in the success or failure of the venture, thus qualifying them to insure (or reinsure, in their case) their insurable interest (Marine Insurance Act section 9).

If there is no insurable interest or a reasonable expectation of receiving one, then the marine insurance is considered a gaming or wagering contract and is consequently deemed void (Marine Insurance Act section 4).


How and for what reason does a maritime policy transition from one party to another?

When an exporter vends merchandise overseas, they have the choice of either selling the goods under conditions where the insurance arrangements are left to be handled by either the exporter or the buyer. Alternatively, they can arrange an insurance that encompasses the entire voyage, the benefits of which transfer from the exporter to the buyer when the insurable interest is transferred from one party to the other.

In certain conditions of sale, particularly the widely used Cost Insurance and Freight (CIF) term, the seller commits to obtaining, at their own expense, a cargo insurance that permits the buyer or any other person with an insurable interest in the goods to directly claim from the insurer. Furthermore, the seller must provide the buyer with an insurance policy or certificate specifically intended for that purpose.

This presents a noteworthy distinction from most other property insurances, where ownership remains constant throughout the coverage period. Claims are paid to the individual named in the policy. However, in the case of marine insurance, the policy must accommodate changes in ownership as the goods, which are the subject of the insurance, are bought and sold.

Due to this rationale, a marine policy is typically assignable, unless it explicitly includes terms that state otherwise (Marine Insurance Act 1906 (MIA) section 50).

The insurance certificate incorporates two additional pieces of information. Firstly, it includes the name and address of the claims representative of the insurers in the destination country. Secondly, the certificate is usually endorsed on the reverse side by the policyholder, thereby granting the buyer the right to benefit from it through assignment.

Consequently, the buyer can proceed to receive compensation for any loss or damage to the goods during transit, as if they were the original policyholder. From the insurer’s perspective, this process entails paying claims to parties other than the initially named policyholder in different countries.

Hence, apart from serving as evidence that a shipment is covered under an Open policy, the insurance certificate also serves as a document of ownership, allowing the holder of the original version to obtain compensation. Additionally, it provides the insurer with the necessary details to apply the policy rate and determine the premium charge.


What are the two types of marine cargo insurance?

1- All-Risk Policy
2- Named Perils Policy

Selecting a marine insurance policy can appear overwhelming considering the numerous choices accessible to importers. Nevertheless, despite the extensive range of coverage options, importers should acquaint themselves with the two fundamental categories in order to make an educated choice. All-Risk and Named Perils encompass the principal types of cargo insurance available for importers to safeguard their goods throughout the supply chain.


1- What is a Marine Insurance All-Risk Policy?

All-Risk Policies (Institute Cargo Clause A) represent the most comprehensive form of Marine Insurance coverage. In its broadest sense, these policies guarantee coverage for all damages, except those explicitly excluded in the policy.

The subsequent points outline common exceptions to the coverage provided by All-Risk Marine Insurance:

Intrinsic Deterioration – This pertains to the decay of physical objects due to the inherent instability of their components, as opposed to deterioration caused by external forces. For instance, fruits and chemicals naturally undergo deterioration without any influence from detrimental external factors.

Negligence – Negligence refers to the failure to exercise reasonable care, resulting in damage or injury to imported commodities. For example, shipping time-sensitive goods to a known congested port.

WSRCC – This acronym represents ‘War, strikes, riots, and civil commotions.’ Standard marine insurance policies do not extend coverage for losses arising from these conditions.

Loss of Utility/Market – In the event that the cargo sustains damage, leading to the loss of potential profits from those goods, the insurance coverage will solely encompass the cost of the goods and not the foregone profits.

Non-Payment/Collection – If the client fails to make payment at any stage of the supply chain, resulting in the loss of goods, the marine insurance will not provide coverage for the incurred loss.

Exceeding Policy Limit – If a loss surpasses the maximum limit per conveyance, it will not be covered. Marine insurance policies only offer coverage up to the specified limit.

2- What is a Named Perils Policy?

A policy known as “Named Perils Policy” pertains to the Institute Cargo Clauses B (previously referred to as ‘With Average’) and Institute Cargo Clauses C (previously referred to as ‘Free of Particular Average’), which represent more restrictive forms of insurance. Any peril not explicitly listed in these policy types remains uncovered by the insurance. Typically, for maritime transportation, the insurance encompasses the following categories of loss: combustion, sinking, grounding, and collision.


Who Requires Ocean Freight Insurance?

The transportation process encompasses airfreight, ocean freight, and overland carriage. Marine cargo insurance serves to compensate cargo owners and/or financiers, including banks, for any financial losses resulting from physical damage, expenses incurred, or liability arising during transportation.

Losses can occur due to maritime hazards, such as inclement weather, sinking, port-related incidents, or as a consequence of overland accidents, collisions, or theft.

Nearly every business involved in the importation or exportation of raw materials or the sale of finished goods overseas requires marine cargo insurance. Such entities comprise:

  1. Importers
  2. Exporters
  3. Manufacturers
  4. Retailers
  5. Wholesalers
  6. Logistics Providers
  7. Commodity Traders
  8. Customhouse Brokers
  9. Freight Forwarders
  10. Steamship Lines
  11. NVOCCs (Non-Vessel Operating Common Carriers)


What is covered in Ocean Freight Insurance?

The maritime freight policy automatically provides coverage for merchandise transported by maritime or aerial means, contingent upon the terms of the transaction, from the originating warehouse to the destination warehouse, encompassing any intermediary transit by rail or truck.

While comprehensive coverage for all risks is available, the fundamental maritime cargo policy includes coverage for perils encountered at sea, such as grounding, sinking, fires, and collisions, as well as hazards arising on the open water, including severe weather conditions and theft.

Main Types of Marine Cargo Insurance Coverage

There exist three categories of coverage (3) offered under what is referred to as Institute Cargo Clauses.

1- Institute Cargo Clauses (A):

This insurance provides the broadest coverage, encompassing all potential risks of loss and/or damage to the insured cargo, excluding losses or damages resulting from the insured party’s misconduct, any delays, common leaks, normal wear and tear, loss of weight or volume, inadequacy or unsuitability of packaging, inherent flaws or characteristics of the insured subject matter, insolvency or financial default of the vessel owners, unseaworthiness of the vessel, war, strikes, riots, and civil unrest. However, by paying an additional premium, it is possible to obtain coverage for war and S.R.C.C perils, as well as perils associated with transshipment, storing cargo in warehouses, and inland transportation. Moreover, Clause (A) also covers the liability arising from General Average and Salvage Charges incurred to prevent a loss caused by any reason, except for the exclusions mentioned above.

2- Institute Cargo Clauses (B):

Under the provisions of the Institute Cargo Clauses (B), insurance offers coverage for the reasonable loss or damage to the insured subject matter that can be attributed to occurrences such as fire or explosion, the stranding, grounding, sinking, or capsizing of the vessel or craft, the overturning or derailment of land conveyance, the collision of the vessel with any external object, the discharge of cargo at a distressful location, natural calamities like earthquakes, volcanic eruptions, or lightning strikes, as well as the loss or damage to the insured subject matter resulting from general average sacrifice, jettisoning, or being washed overboard into the sea, lake, or river. Furthermore, it encompasses the complete loss of any package that is lost overboard or dropped during the loading or unloading process. However, it is important to note that this clause does not provide coverage for the damage or loss caused by the perils specifically excluded as stated in the Institute Cargo Clauses (A).

3- Institute Cargo Clauses (C):

The coverage offered by the Institute Cargo Clauses (C) closely resembles that of Institute Cargo Clauses (B), with the exception of a few hazards. The hazards excluded from the scope of Institute Cargo Clauses (C) encompass earthquakes, volcanic eruptions, or lightning striking the cargo and falling into the water, damage caused by exposure to seawater, freshwater, or river water, as well as the complete loss of any package dropped or lost overboard during handling, loading, or unloading.


What is Marine Insurance?

Marine insurance provides protection against potential financial exposure arising from physical damage or losses to merchandise while in transit worldwide. While the term “marine” may immediately evoke thoughts of sea transportation, this coverage extends to any goods being transported by road, rail, sea, or air.

The marine logistics industry encompasses various entities collaborating to facilitate the delivery of goods from their origin to their destination. Given the involvement of numerous parties and multiple stages in the journey, it comes as no surprise that unforeseen incidents can occur during the voyage.

Marine insurance aids in mitigating the financial risks and liabilities faced by all parties involved in the event of accidents. Upon careful consideration, it becomes evident that transportation is fraught with possibilities. For instance, collisions can happen on the water, damages can occur during the loading or unloading of goods, and entire cargo containers might be lost or stolen. Each of these circumstances entails financial risks that can potentially rupture valuable client relationships painstakingly nurtured over the years.

Therefore, marine insurance is indispensable for ship owners, shipping corporations, and cargo owners who are resolute in their efforts to mitigate risks.

A wide array of transit insurance policies are available, each with varying levels of coverage. The extent of party liability is contingent upon the specific policy terms and conditions.


What are the two types of Marine Insurance?

1- Hull Insurance
2- Marine Cargo Insurance

There exist two primary categories of maritime insurance. The first one is commonly referred to as Hull Insurance, which provides coverage for vessels involved in the transportation of goods. The second category is Marine Cargo Insurance, which safeguards goods throughout the processes of loading, unloading, storage, and transportation. Furthermore, this coverage plays a crucial role in maintaining strong client relationships in case of any unfortunate events.

If you are engaged in shipping goods for clients globally, it is imperative to seriously consider obtaining marine cargo insurance.

Who is the intended audience for marine cargo insurance?

Marine cargo insurance is indispensable for both small and large enterprises engaged in the import, export, or distribution of goods within the United Kingdom and across the global stage. As per the Marine Insurance Act of 1906 (MIA), any business possessing a “legitimate stake” can procure marine cargo insurance.

This legitimate stake encompasses raw materials, finished products, general merchandise, machinery, and appliances. Hence, manufacturers, merchants, wholesalers, retailers, and distributors, all possess a legitimate stake and should acquaint themselves with marine cargo insurance and its significance within the broader marine insurance market.

Why do I require Marine Insurance?

Despite the perception that marine insurance is unnecessary, this coverage serves as a safeguard for all parties involved, alleviating the financial burdens that arise in unfavorable circumstances.

It is important to note that cargo haulers do not typically insure individual shipments. Instead, they obtain a marine policy that specifically addresses their liability for the loss or damage of goods. Even if they are deemed responsible for such losses, contractual terms often limit clients’ ability to recover a mere fraction of the actual value of the goods.


Compelling Reasons for Considering the Procurement of a Marine Policy

By obtaining your own marine policy, you can mitigate the risk of financial loss, both for yourself and your clientele. Safeguarding a client’s financial interests is of paramount importance in any business, particularly within the shipping industry, where unforeseen mishaps are not uncommon.

Furthermore, acquiring insurance is typically a contractual prerequisite. It forms an integral part of the sales terms, enabling swift replacement of damaged or lost goods. Moreover, if there are third-party entities involved, such as a bank, they too would insist on contractual coverage to mitigate their own risk.

An additional benefit lies in its protection against General Average. Under Maritime Law, General Average stipulates that all cargo owners involved in a specific voyage must proportionally share the costs arising from substantial loss or sacrifice of cargo.

General Average situations can arise from various unfortunate circumstances, including onboard fires, stranded vessels, or the collapse of container stacks.

In any of the aforementioned scenarios, cargo owners bear the legal obligation to contribute equally in order to regain possession of their goods, even if their own cargo remains undamaged.

It is important to note that carrier’s liability insurance does not provide comprehensive protection. Carrier liability is generally restricted by contractual terms, and their insurance coverage excludes events such as General Average or acts of God.

By securing your own policy, you retain full ownership of the insurance. This is especially significant when dealing with foreign insurance brokers, as making claims through them can often be a convoluted process. Additionally, if the insurance is not in your name, the replacement of your goods can be a time-consuming endeavor.


What does Marine Insurance cover?

Generally, this insurance safeguards against the loss or harm to property resulting from:

  • Unforeseen calamities of nature
  • Acts of human origin, such as theft and acts of piracy
  • Collisions or derailments occurring during land transit
  • Occurrences linked to vessels, such as sinking or grounding
  • The loading and unloading of cargo
  • Storage in warehouses during the transitional period of up to 60 days
  • Related expenses like inspection fees and costs for restoration
  • Principles pertaining to maritime law, including General Average

The extent of coverage may differ across policies, and it is crucial to take note of various clauses. The Institute Clauses, namely A, B, and C, encompassing different levels of coverage from the aforementioned list, are the primary categories.

In reality, there exist more than 150 additional Institute Clauses meticulously designed to cater to specific trade requirements. A comprehensive list of all clauses can typically be found within the policy documentation.


What doesn’t Marine Insurance cover?

There are additional factors that should be taken into consideration which are not covered and may impact your responsibility. These encompass:

  • Inadequate packaging by suppliers for the chosen mode of transportation
  • Deliberate harm or misconduct
  • Decay caused by the inherent nature of the product, such as perishable and flammable substances
  • Hazardous materials like firearms and ammunition
  • Shipping delays leading to the deterioration of goods
  • Normal wear and tear
  • Civil unrest, labor disputes, or armed conflict
  • The financial insolvency of the vessel’s owners or operators.

Marine Cargo Insurance Claims Procedure

If you require to make a claim, the procedure varies among different insurance brokers. Generally, they will provide a claims form and request a compilation of the following information and documents:

  • Name and contact information of the authorized policyholder
  • A concise depiction of the occurrence
  • Insurance certificate
  • Transit documentation such as the Bill of Landing or CRM Note
  • Commercial invoice
  • Packing/contents inventory
  • Weight of the consignment
  • Weight of the damaged or lost merchandise
  • Delivery note with relevant conditions
  • Correspondence from the carrier acknowledging their liability
  • Photographs depicting any damage – if applicable
  • Statement from the driver – if applicable

Furthermore, it is necessary to inform the insurer about a potential claim within the insurer’s specified timeframe from the date of the incident. Typically, most insurance brokers utilize a 30-day timeframe for such purposes.


What are the Marine Insurance costs?

The expenses associated with marine insurance are contingent upon the specific shipment and typically rely on the following factors:

  • The nature of the commodities being transported
  • The value of the transported goods
  • The mode of transportation and the carriers employed
  • The origin and destination of the goods
  • The manner in which the cargo is packaged

Generally, marine insurance brokers offer personalized quotations for individual shipments or yearly policies.

Is Marine Cargo Insurance worthwhile?

Acquiring an insurance policy always entails assessing the individual expenses and advantages on a case-by-case basis. It is also necessary to verify the extent of coverage provided by the insurance and its alignment with your specific needs.

Insurance holds value in numerous circumstances, particularly when the shipment involves a substantial portion of your inventory.

Advantages of marine insurance: Comprehensive protection against financial risks in the event of any accidents during transit. Coverage throughout the process of loading and unloading goods. Coverage during the warehousing of goods for a period of up to 60 days. A prompt and uncomplicated claims process to replace lost or damaged goods. Assurance that your client’s goods are fully insured, offering peace of mind.

Disadvantages of marine insurance: There are additional costs associated with shipping. It is not always necessary for low-value products. Insurers occasionally refuse to pay if suppliers fail to package the cargo correctly. Additional clauses are required to insure against war and strikes.


Maritime Insurance Brokers

If you desire to procure insurance to safeguard against your financial liabilities, it would be prudent to approach an insurance broker. These intermediaries typically comprise a proficient ensemble that is thoroughly educated in matters of cargo, freight, and maritime insurance, and they can aid in locating the appropriate coverage.

Furthermore, insurance brokers often possess a specialized team to contact in the event of a claim necessity. The realm of marine insurance encompasses a diverse array of conventional insurance providers and expert maritime intermediaries.


Top Maritime Insurance Brokers

Currently, leading maritime insurance brokers:

  1. Marsh: Marsh is a global leader in insurance broking and risk management, and it provides specialized marine insurance services to manage risks for all types of marine vessels and cargo.
  2. Aon: Aon is a leading global professional services firm providing a broad range of risk, retirement, and health solutions. They have a dedicated marine insurance team that provides risk management services to the marine industry.
  3. Willis Towers Watson: This is a leading global advisory, broking, and solutions company, which provides dedicated maritime insurance services.
  4. Arthur J. Gallagher & Co: Gallagher is an international insurance brokerage and risk management services firm that also operates in the maritime sector.
  5. Lockton Companies: As the world’s largest privately held independent insurance broker, Lockton also offers a range of services in the marine industry.
  6. Jardine Lloyd Thompson (JLT) Group: JLT specialized in risk and insurance broking, providing services to the maritime industry. However, it’s worth noting that in 2018, JLT was acquired by Marsh & McLennan Companies (the parent company of Marsh), which may have affected its standalone operations.
  7. AXIS Capital: While primarily an insurer, AXIS also provides specialized marine insurance services.
  8. Integro Insurance Brokers: This international insurance brokerage and risk management firm offers comprehensive marine insurance services covering a range of marine and shipping risks.
  9. Nausch, Hogan & Murray, Inc. (NHM): This is a US-based independent marine insurance broker providing various insurance solutions to the maritime industry.
  10. Seacurus: This UK-based specialist marine insurance broker offers services such as kidnap & ransom insurance, loss of hire insurance, and bespoke marine insurance solutions.
  11. Tysers: As an international Lloyd’s broker, Tysers provides a range of insurance solutions to the marine industry worldwide.
  12. Skuld: Skuld is a mutual marine insurance company who provides coverage for ship owners, charterers, and offshore and energy companies.
  13. North Group: As a leading global marine insurer, North provides P&I, FD&D, war risks and ancillary insurance services to shipowners worldwide.
  14. The Swedish Club: The Swedish Club is a mutual marine insurance company, headquartered in Gothenburg, Sweden. They provide coverage for ship owners, charterers, and offshore and energy companies.
  15. Britannia P&I: Established in 1855, Britannia P&I is the oldest P&I Club in the world and one of the leaders in the International Group of P&I Clubs, mutual maritime insurers who together provide cover for the majority of the world’s ocean-going tonnage.

Remember to always research these companies and others to find the best fit for your needs. You should consider their reputation, the types of coverage they provide, their financial stability, and their customer service.