Marine insurance existed more than a hundred years ago in Iran during the First Babylonian Empire. Trading by ship has been around for centuries; it is primarily the reason why the world is now a global village, closer than ever. The goods transported via water are never in small quantities; it is a business running into millions, and that’s why there has been and will always be a need to find the right marine insurance for your company. Marine insurance can literally be a safety net, safeguarding you from stormy waters and slippery icebergs.
In any business, there are several risks. When the business involves the transportation of goods, there is an added risk. The risk factor gets quadrupled when goods are being transported by the uncertain and treacherous waters of an ocean. That’s why there is a need for marine insurance to ensure your business survives and thrives at the end of the day. It is often the reason so many industrialists and business owners around the world can have a good night’s sleep and not worry about their ship at sea.
Types of Marine Insurance-
- Cargo Insurance– This insurance is meant specifically for goods to be transported from their place of origin to their destination. Cargo is never one good or two; it is always in bulk and hence can be very valuable and expensive. Insuring them is an excellent way of protecting yourself from any financial losses.
- Hull Insurance– This is a type of marine insurance meant specifically for your ships and shipping machinery. So, it essentially provides coverage for any damage to your vessel. Apart from ships, it also covers boats, yachts, and steamers. Owning any water transport is not a joke; it is a costly affair, and hull insurance can come in handy in times of an accident at sea due to natural disasters, damage during insurance, and even theft, piracy, or fire on board.
- Liability Insurance- Maritime incidents are not unusual and can cause severe financial damage. Any kind of damage to the life or property of a third party can be resolved if you have liability insurance in place.
- Machinery Insurance– Just like cargo, there is marine insurance focusing only on the machinery onboard. Any damage incurred will result in compensation from the insurance company.
All service industries have some principles that guide and set a standard. The same goes for the marine industry as well. Due to the global nature of the marine industry, it is understood without saying that there needs to be principles which are expected to be followed by anyone indulging in the marine business from across the world.
Some of the principles are as follows-
- Principle of Good Faith– While filling out an application for marine insurance, you will be expected to not lie or give any kind of misleading information. The marine company has all rights to reject a policy application.
- Principle of Indemnity– This principle suggests that the insurer will pay you only till the extent of damage caused due to a maritime incident. In no event whatsoever can you earn any kind of profit?
- Principle of Loss Mitigation– You have a duty to have taken all steps that could have reduced the loss or damage that occurred. In case you choose to sit back and relax because you have an insurance policy in place, you will be in big trouble. The insurer has the right to pay you less or even refuse to pay you at all.
The importance of marine insurance should not be understood by you due to a mishap. The Suez Canal crisis in 2021 costed insurers over one billion dollars globally, thus showcasing how an incident like this could happen any day and how a marine insurance policy can come in handy. It is life-saving in so many ways and the reason the global economy functions on a daily basis. So, marine insurance is truly your lighthouse.
