Everything You Need to Know About Marine Insurance

Everything You Need to Know About Marine Insurance

More than nine-tenths of global commerce is shipped by ocean-going vessels. This volume of cargo is roughly equivalent to 10 billion metric tonnes shipped yearly across the oceans and seas. Thanks to modern-day shipping, nearly all of this cargo is safely delivered to their destinations. On occasion though, some still get damaged, lost, or stolen. In some unfortunate circumstances, they sink to the bottom of the ocean.

It’s precisely in response to the risks of shipping that marine insurance—and specifically marine cargo insurance—was devised by merchants and shipping companies. Marine insurance covers damage or loss incurred by ships, terminal, and any transport vessels including cargo which are picked-up, loaded, transported, stored, lifted, unloaded, and delivered from their ports of origin to their delivery points. 

Marine Cargo Insurance

Marine cargo insurance is a subdivision of marine insurance. As a subdivision of marine insurance, a marine cargo insurance policy is a contract intended to minimise the financial loss of a shipper in case an accident or natural hazard occurs. They provide insurance for goods that are in transit. They usually cover against loss and damage to the cargo which are attributable to external factors.

The standard coverage of marine cargo insurance can include:

  • Loss or damage which occurs when the cargo is loaded or unloaded
  • Partial or total loss or damage to the cargo only, which happens during transit of the shipment
  • Accident which involves the shipping vessel, resulting in loss or damage during shipment
  • Loss or damage to the goods while they’re being stored

Potential Risks to B2B Shippers

Business-to-Business (B2B) traders and shippers have seen unprecedented growth in their sales and overseas demand for their products which are mostly delivered thru inter-country shipping. Industry reports confirm that demand for shipping continues to rise. But the goods are sometimes lost in transit, or they arrive at their consignees or recipients in a very damaged condition.

This is where marine cargo insurance can be very helpful so B2B traders and shippers can minimise their financial losses due to damaged or lost shipment. Most of the causes of loss or damage to the cargo of B2B traders can be summed up by the following:

1. Poor Packaging

If your products are poorly packaged, or the packaging materials used are inappropriate or not suitable, this can result in damaged products when they reach their consignees or destinations.

This is a common complaint among consignees or recipients of shipment cargo. When the shipment arrived, the packaging was almost torn to pieces or shred apart, or parts of it were crushed, and the products inside were partly or severely damaged.

You can better manage this kind of risk by getting a marine cargo insurance that’ll help minimise your financial losses in case of damages due to poor packaging. Some proactive marine cargo insurance providers would even go to the length of asking the freight forwarder or vessel transport to recommend packaging materials which are more suitable for your goods to be transported. 

2. Improper Handling

The second typical cause of complaints among consignees or recipients is that their package was not properly handled or was mishandled. Packages and containers go through a lot of stress and pressure. 

From the time packages are picked up by the freight forwarder, to when they’re loaded at the vessel bay or cargo hull, until they’re unloaded and transported to their final delivery points, they go through a lot of lifting, handling, loading, and unloading. They’re quite vulnerable to being crushed by cranes, forklifts; or damaged by human error or even lack of care.

3. Loss to Theft

A third possible cause of damage or loss is theft. There are numerous occasions for cargo to be stolen during transit. And once they’re stolen, it would be quite difficult, and often impossible, to get them back. Even with security surveillance cameras in the cargo hulls of vessels, and inside and outside storage warehouses, many are still lost to cargo thieves.

When your shipment cargo is lost to theft, it’s often hard to replace it in time for the recipient to receive the item ordered on the date when you set their expectation for its delivery. This can have an adverse impact on their experience as well as your company’s reputation. But at least with marine cargo insurance, some of the financial losses you incur due to damaged or lost cargo is minimised.

Cover Your Goods

B2B traders and shippers will surely benefit from getting marine cargo insurance for their goods and packages. Especially in delivering packages to parts of the world which are far from the port of origin, it’s best to have insurance coverage for your goods to minimise your financial losses in the event of damage, loss, or theft.

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.