Marine Insurance
It is a cost-effective and sustainable mode of transportation owing to the country's vast coastline of around 11,098 kilometers and proximity to vital shipping routes. Among the several questions surrounding coastal shipping, many wonder if they require marine insurance to move goods through this mode of transportation.
Marine Insurance: An Absolute Must in Coastal Shipping
Marine insurance makes a compelling case for inclusion if you're involved in coastal shipping. This is because:
As per data from the National Disaster Management Authority, 76% of India's coastline is vulnerable to cyclones. In fact, India's coasts witnessed six cyclones, causing losses worth USD 2.5 billion in 2023. Various reports have showed that the damage caused by cyclones stood at a staggering USD 44 billion between 2015 and 2022.
Last year, India's coasts witnessed several devastating cyclones such as Remal, Dana, and Fengal, among others. Having marine insurance compensates you for the financial losses suffered should your consignment get damaged due to cyclones.
Maritime piracy has become a bane for Indian seafarers and those involved in coastal shipping. As per a report compiled by the Information Fusion Centre - Indian Ocean Region (IFC - IOR), the Indian Ocean region saw piracy and armed robbery increasing by 20% in 2023, with 194 incidents compared to 161 in 2022.
Such incidents endanger cargo safety along with the crew. Unfortunately, these incidents can not only happen during movement of vessels on sea but also when they are anchored offshore. Financial losses arising from such incidents can run into several lakhs of rupees. However, a marine insurance plan can help absorb the losses to quite an extent.
Cargo mishandling is more common than you think. During transit, goods pass through several hands, including loading docks, warehouses and transport carriers. This makes them highly vulnerable to accidental damage and improper handling. Be it fragile items being dropped, perishable goods stored under improper conditions, or incorrect loading and unloading practices, the financial implications can be massive.
However, a marine insurance policy steps in to cover these losses and allows you to focus on operations as you know you have a cushion against human errors.
Vessel and cargo damages are not only limited to financial losses. They can result in contract breaches, leading to legal liabilities. The aggrieved party can file lawsuits and claim for compensation. Such situations can not only take a toll on your business's cash flow but also damage your reputation. A marine insurance plan can help you cover these liabilities with ease.
Different Types of Marine Insurance
There are multiple types of marine insurance plans, each serving a distinct purpose. The various types of marine insurance policies available are:
This marine insurance plan covers damages suffered by the ship's machinery or equipment.
This marine insurance plan covers losses arising due to cargo damage during transit.
This insurance plan covers the damages caused to a third party resulting in bodily injury or asset damage.
In Conclusion
Coastal waters, which may look calm, can rough up any moment. Marine insurance helps you remain guarded financially against adversities that may come up unexpectedly. Choosing the right plan among various types of marine insurance can hold you in good stead and help you sail through smoothly.
