More than 90 percent of the world’s total freight is shipped through oceans since the transportation through container ships is a cost-effective and safe way of transporting goods.
But it’s the oceans, and they do not come without perils.
So here, we discuss some of the perils associated with marine transportation and why you should take transit insurance against these risks.
Marine Transit Insurance:
The marine transit insurance covers any loss and damage caused to the goods in Transit. The marine cargo policy covers loss or damage that arises:
Due to total or partial loss or damage only to the goods being carried
During shipment due to an accident with the conveying ship, plane, train, or vehicle
To the goods during loading or unloading
The loss or damage to the goods in temporary storage.
The risks associated with transportation of goods and consignment:
- Packaging: Improper packing can result in damage to goods when exposed to the rigors of the sea.
- Theft: Cargos have a high chance of theft during transportation.
- Improper Handling: Cranes and Forklifts can cause damage to the cargo.
Risks associated with the vessel:
- The vessel can become stranded.
- There are high risks of fire.
- Collision and accidents with another vessel.
- Natural disasters and an act of god can result in the loss of containers.
In case of shipping loss, the liability that arises, therefore, can be severe. However, when you insure your business, you can save it from any unforeseen liability, considerably impacting your business.
Types of Cargo Insurance:
There are three types of marine insurance published by the Lloyd’s Market Association (LMA).
They are known as
- Institute Cargo Clauses (A)
- Institute Cargo Clauses (B)
- Institute Cargo Clauses (C).
- A clause (Full Coverage)
A Clause or full risk insurance protects without having to prove carrier liability. The clauses cover general average and Both to Blame collisions, where containers are lost at sea due to the collision of two ships.
- B clauses (Restrictive Coverage)
Loss of or damage to the subject-matter insured reasonably attributable to:
- fire or explosion
- the vessel being stranded, grounded, sunk, or capsized
- overturning or derailment of land conveyance
- collision or contact of vessel craft or conveyance with any externalities.
- discharge of cargo at a port of distress
- loss or damage to the subject-matter insured caused by
- general average sacrifice
- loss of or damage to the subject-matter insured caused by
- general average sacrifice
- jettison or washing overboard
- entry of sea lake or river water into vessel craft hold conveyance container or place of storage
- total loss of any package lost overboard or dropped while loading or unloading from the vessel.
- C clauses (Limited Coverage)
Loss of or damage to the subject-matter insured reasonably attributable to
- 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
- loss of or damage to the subject-matter insured caused by
- general average sacrifice
- Jettison
Regardless of Contractual Liability, a trader should make arrangements for cargo insurance. Always choose the best marine cargo insurance, so when anything happens to your goods, you are out of liability unless negligence on the carrier’s part is proven, which can safeguard your business from sinking in repayment of losses.
Comments are closed.