Marine Insurance Services

Marine cargo insurance is an important risk mitigation tool available to manufacturers, traders, exporters and importers who move goods within the country or overseas. It affords protection to the owner of the goods against loss or damage to the cargo. Such loss or damage could arise due to an accident, damage during loading and discharging, sinking of the vessel etc.

Another option is going for an All Risk Marine Cargo Policy that provides comprehensive coverage with some general exclusions such as losses arising from the inherent nature of the commodity or packing. It is also possible to develop special covers for a particular commodity and the peculiar risks associated with it.

Marine Hull Insurance offers protection to shipowners against loss or damage to their ships. However, other parties such as charterers, shipbuilders, bankers / financiers etc. can also cover their interests under various types of insurances.

Types of Policies

• Hull and Machinery (H&M) Insurance: Covers the body of the ship or her hull, machinery, tackle, ordinary fittings required for trade, and other necessary equipment. The policy covers damage to the vessel arising from various factors such as perils of the sea, crew negligence, machinery breakdown, General Average and Salvage etc. Basically the hull policy is as per the standard English clause under the ITC Hulls.
• Subsidiary Interests Insurance: Usually refers to freight and disbursements insurance. Freight is the profit a shipowner makes from employing his ship. Disbursements include the expenses for fitting out of a ship for a voyage, which may include the cost of provisions and stores made available on board the ship, port dues, expenses of loading / unloading at the port of call and the like.
• War Risks Insurance: War and related perils are “Paramount Exclusions” under a regular hull insurance plan, but these can be insured separately. Most ship owners opt for the GIC Re’s War Risks Scheme (called Hull War Risks Insurance Scheme of Government of India, 1976). The sum Insured for war risks insurance must be the same as the sum insured under H&M, and Freight and Disbursements interests.

Loss of hire or revenue, which is usual for shipowners, is not available in the Indian market. Traditional loss of hire products available in international markets trigger only when a vessel owner suffers financial loss caused by any of the perils insured under the H&M Policy. They compensate for the loss of hire or revenue during repair, subject to the Time Deductible.

Another unique product under this type, identifies 21 additional situations (perils) where there is no physical damage to the vessel, but the owner could lose charter, hire, or earnings as a result of any of those perils. These perils primarily relate to Blue Water Vessels, tonnages which operate on coastal waters and are equally susceptible to those perils.

Perils include the following:

• Fire or explosion on land
• Extraordinary weather
• Earthquake, heave
• Emergency port closure
• Abnormal physical obstruction of a berth
• Master’s refusal
• Arrest, restraint under quarantine regulations
• Infectious diseases or poisoning on board
• Illness, death or injury
• Detention following actual or alleged pollution
• Oil or chemical pollution