Marine Insurance is a type of insurance that covers cargo losses or damages by providing protection against transport related risks, whilst goods are transported from one place to other by railways, roadways, sea/waterways or airways. This is the oldest form of insurance which is still practiced worldwide. In India, the fundamental principles of Marine Insurance are drawn from the Marine Insurance Act, 1963. It is an agreed value insurance with an option of 10% markup on invoice value for incidental expenses involved in shipment. 

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Marine (Cargo) Insurance Policies

Marine Specific Voyage (Single Transit) Policy

This insurance policy is suitable for entities where the need to insure the cargo/shipment arises occasionally. This insurance policy can be issued for inland (sales/purchase) as well as overseas (export/import) shipments. The cover will cease to exist once the insured cargo reaches its destination. This policy offers indemnification against loss or damage to cargo during a Specific Single Transit only. Cover could be customized as per the requirement & nature of cargo, on agreed premium.

Marine Open Policy

This insurance policy is suitable for entities with regular shipments and a huge volume of transactions. This policy eliminates the need to negotiate terms of a new policy each time a shipment is scheduled. This insurance policy can be issued to cover Inland shipments (sales/purchase) or overseas shipments (Export/Import). Terms of the policy were decided and agreed upon in advance depending on the nature of cargo, estimated sum insured, type of voyage/shipment, etc. covering all the agreed transits/shipments within a specified period, generally 12 months. This policy provides automatic and continuous protection to shipments during the policy period. Insured is bound to declare each and every shipment within a month, agreed in the policy, in subsequent month or as per the declaration clause in the policy. Alternatively, instead of monthly declarations, insured can also opt for insurance certificate issuance for every transit. The cover will cease to exist once the sum insured is exhausted or upon completion of 12 months, whichever shall occur first.

Marine Sales Turnover Policy

This insurance policy is suitable for entities with huge sales turnover. There are a lot of customization options available in this policy, depending on insured’s business requirement. This policy has the unparallel advantage of covering not just the entire sales turnover of the company but can be extended to cover the purchases, imports, exports, inter-depot movements, movements related to Job work, transit from factory to warehouse, warehouse to dealerships & from dealerships to customers, movement of capital items etc. Varied terms are incorporated for varied transits in a single policy and instead of getting issued a certificate for each overseas shipment or declaring each and every inland shipments on monthly basis, insured declares his total sales turnover on quarterly basis and premium is adjusted accordingly.

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Claim Process

  • Inform the insurance company with a rough estimate of the loss as early as possible.
  • Take all steps within your power to minimize the extent of the loss or damage.
  • Preserve the parts affected and make them available for inspection by a representative Or Surveyor Deputed by Insurer.
  • Inform the police authorities immediately. Get the FIR lodged, as per the circumstances.
  • Furnish All Such Information and Documentary Evidence As the Insurer May Require.
Coverages In Marine Insurance (Cargo)
Depending upon the cargo, there are basically 3 types of covers offered by insurers in marine (cargo) insurance policies, as briefed below.
  • International Cargo Clause (ICC) A, B, or C – for Overseas Shipments
  • Inland Transit Clause (ITC) A, B or C – for Inland Shipments

ICC/ITC-A

This is a form of All Risk insurance cover which is governed by exclusions, rather than coverage. In other words this cover offers indemnification against loss or damage to the subject whilst goods are in transit by every peril which has not been excluded in the policy. Some of the common exclusions in this cover are mentioned in General Exclusions section for reference.

ICC/ITC-B

This cover is also known as Basic Cover in which only some named perils are covered. This cover offers indemnification against loss of or damage to the subject-matter insured, reasonably attributable to below perils.

  • Fire or Explosion
  • Vessel or Craft being stranded grounded sunk or capsized
  • Overturning or Derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • Earthquake, Volcanic Eruption or Lightning
  • General Average Sacrifice
  • Jettison or Washing Overboard
  • Entry of Sea, Lake or River Water into vessel, craft hold conveyance, container, lift van or place of storage,
  • Total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft.

ICC/ITC-C

This cover offers indemnification against loss or damage to the subject whilst goods are in transit due to only a few named perils as mentioned below.

  • Fire or Explosion
  • Vessel or craft being stranded, grounded, sunk or capsized
  • Overturning or Derailment of land conveyance
  • Collision or contact of vessel craft or conveyance with any external object other than water
  • Discharge of cargo at a port of distress
  • General Average Sacrifice
  • Jettison

Main Addon covers Available

  • For Inland Transit: Strike, Riot and Civil Commotion
  • For Overseas Transit: War, Strike, Riot and Civil Commotion

Duty and Increased Value Insurance (for Imports only)

General Exclusions

Loss which are attributable to below reasons are excluded from the scope of marine (cargo) insurance policies.

  • Willful misconduct of assured  Ordinary leakage/spillage port shortages, ordinary losses in weight or volume or ordinary wear and tear
  • Insufficiency or unsuitability of packing or preparation of the subject matter insured.
  • Inherent vice or nature of the subject matter insured.
  • Delay
  • Insolvency/financial default of carriers
  • War, Strike, Riot and Civil Commotion
  • Deliberate damage to or deliberate destruction of the subject matter insured
  • Losses arising from nuclear weapon
  • Losses arising from Moisture & ordinary trade losses
  • Losses Due to overloading, Unsuitability of carrying conveyance and unseaworthyness of vessel