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The Importance of Marine Cargo Insurance in Export Business

Posted on 31 May 2021

For thousands of years, traders have been sailing to foreign lands to do business. Sea was the primary medium of trade, and it has still been, even after the airways have become conventional. The reason is that the mega container of the ship can carry more cargo compared to an aeroplane.
If anything happens to the cargo, the losses will be in millions of dollars; and that is a lot of money to lose. That is why export businesses require Marine Insurance. Marine cargo insurance is crucial for exporters to secure any loss, should there be any.

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Nature of Marine Cargo insurance

Marine Cargo insurance concerns with import/export businesses – both international and inland trades. It provides coverage for the loss or damage to cargo, covers the freight. By purchasing Marine Insurance, the trader transfers the liability of goods from the original stakeholders (exporter and importer) to the insurance provider. Although the term says ‘marine’ insurance, it covers inland trades as well. Any shipment, whether sent on container trucks, trains or ships can be covered by Marine Insurance.

  • Ocean Marine Insurance

    This type of Marine Insurance provides coverage from the oceanic perils. An exporter needs ocean Marine Insurance if the shipment is in transit using the waterways on a vessel or ship. Sometimes, ships get damaged in the sea, fighting against natural disasters or human negligence. Ocean Marine Insurance covers the damages to the goods/cargo in such cases. The ocean Marine Insurance also provides cover against pirate attacks on container ships or vessels.

  • Inland Marine Insurance

    This type of Marine Insurance covers the risks entailing inland trades. Inland Marine Insurance provides coverage for goods in transit via roadways, railways or stored at a particular location.

Oceanic Disasters that Caused Exporter Business Millions

On 30th November 2020, ONE Apus suffered a major container stack collapse in the Pacific Ocean. The giant container vessel was en route to Long Beach, Hawaii, from Yantian in China. The accident was caused by extreme weather conditions, a common threat to mariners. The storm threw 1,816 containers overboard from the vessel.
After the sinking of Mol Comfort in 2003, The ONE Apus accident is considered the second biggest cargo loss in history. After an investigation, it was found that 4,500 teu might have been lost or damaged, tanking more than $200 million. To avoid such dreadful losses, export businesses must take a marine cargo insurance policy.

To Conclude

The sea is unpredictable, and it dramatically influences global trades. Many ships and container vessels fall prey to natural calamities and other oceanic perils.
For exporters, trying to curtail the incurred losses, business insurance like Marine Insurance is vital. One can even purchase Marine Insurance online for their convenience.

  • Marine Transit Insurance (Inland) Policy
  • Product Code: 2005
  • Product UIN: IRDAN115CP0007201920

This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). customersupport@iciclombard.com. www.icicilombard.com. (Marine Single Transit Insurance, 2005, IRDAN115CP0007201920)