In under a year, the maritime shipping industry has been a witness to some major accidents. To begin with, a major fire that broke out on the Maersk Homam in the Arabian Sea serves as a stark reminder of the perils of shipping crews amidst the ocean. Second, Singapore labelled vessel en-route from Singapore to Suez with staff on board when a fire broke out.
While this underscores crew safety at sea, as a shipper, knowing you have cargo and freight on board is worrying. Despite the proximity, these incidents highlight the frequency at which such accidents erupt in maritime shipping.
By law, all shipping carriers oblige to offer a minimum amount of insurance to all shipping carriers; however, it offers limited coverage. So how to protect your cargo during maritime transit? This is where marine transit insurance comes into the picture.
Marine transit insurance is “protection against future loss.” A maritime insurance policy protects you from marine risks, whether you own a private yacht or commercial ship. Of the four modes of transport- road, rail, air and water- marine transportation incurs the highest possibility of natural occurrences. The potential harm to the cargo can cause a huge loss in the financial casket of the transporter and the shipping companies. By law, all shipping lines are obliged to purchase maritime insurance. However, we suggest you examine the additional covers, policies against damage/damage incurred to freight in transit.
Marine Transit Insurance Vs. Transit Insurance- What is the difference?
Akin to other insurance policies, marine transit insurance shifts all liabilities from stakeholders to the insurance providers when you purchase marine insurance coverage; however, marine cargo insurance protects the financial interests against theft, loss, robbery, or vandalism as a shipper.
In some cases, export contractors prerequisite the exporter to own marine transit insurance. Therefore, we suggest you take marine insurance to satisfy the agreement’s terms, such as freight insurance policies or Carriage and Insurance Paid.
On the other hand, a transit insurance policy fills the coverage gap when you move. If you choose to use your vehicle for the move, you are responsible for the damages or losses beyond your policy limits. Therefore, a transit insurance policy ensures your possessions are protected from:
- Natural Disasters
- Mechanical and electrical accidents
- Theft or vandalism
What are the types of Marine Transit Insurance?
The freight insurance protects exporters if the freight endangers loss. Say, if pirates rob you of your cargo in transit, freight insurance will cover your losses.
Protection and Indemnity Insurance, also known as P&I cover, is a two-end insurance cover aiming to protect the damages or losses to third-party cargo that the standard transit insurance may not cover.
Freight Demurrage Insurance
The freight demurrage insurance covers the contractual cost claims and managing assistance for many disputes not covered within Hull policies or freight insurance.
Marine Cargo Insurance
Marine Cargo insurance protects the financial interests of freight owners if the cargo is at risk of vandalism, loss, damage, or theft. In addition, the coverage policies will recuperate for your losses against a specific premium payment.
Marine Transit Insurance
This insurance coverage shields and compensates for operational loss to the ship. Marine transit insurance requires approval from the surveyor for the protection of essential onboard machinery.
Why are Marine goods in transit Insurance important?
While there is no compulsion to buy goods in transit insurance, we highly suggest you buy one to protect your goods from severe risks that could be catastrophic. We suggest you weigh the insurance costs with potential and collateral damage that could happen without optimum cover.
As you examine the costs, you can imagine most freight has a higher value than the insurance policies. Therefore, without proper protection, you can easily lose a substantial part of the value of your cargo.
Despite being revered as the safest channel for the movement of goods, marine transportation incurs imminent risks or loss to the cargo. Therefore, we suggest you explore the insurance’s details, cover, and liabilities as general recommendations.
To know more about marine transit insurance, stay tuned!