Marine Insurance protects goods and cargo from loss or damage while they're being transported by sea. Exporters and importers typically take out this cover when shipping internationally, and it can also extend to cover connected inland movement, such as goods travelling between a port and a warehouse.
Coverage depends on the specific policy: risks like theft, damage, or loss during transit are covered only if they're listed in the policy terms, and the extent of protection can vary quite a bit based on the goods being shipped and the insurer.
How It Works:
- The shipper purchases an insurance policy.
- Goods are covered during transit.
- Any loss or damage is reported.
- The insurer assesses the claim.
- Compensation is paid as per policy terms.
Benefits:
- Protects against transit risks
- Ensures financial security
- Supports smooth trade operations
- Builds confidence in international shipping
Example:
An Indian exporter ships machinery of Rs 20 Lakh to a customer in another country and opts for marine insurance for the shipment. If there is damage in transit that is covered, the exporter can file the claim with the insurer.