The coverage of losses while at sea due to circumstances that are beyond your control is termed as voyage insurance. In the import-export trade, this form of a business arrangement is very essential. Let’s look at some of the benefits of marine insurance, which is like any other form of insurance with a slight difference. You can say that it is a tossup between home and auto insurance.
- Protection rights of the ship owner are factored into and an imperative should the vessel collide with another, in case of an oil spill, fire and any damage or loss to life and cargo.
- Hull insurance has two policy forms – the Open Perils policy which covers almost all external risks. The few that may not factor under the cover is ice or aging of the vessel. The Named Perils policy covers specific perils such as piracy and bad weather conditions.
- Hull insurance is a preventive measure that encapsulates repairs and prevention of future damage to the vessel. If required, the ship owner may request for non-sea-related add-ons, which requires an additional premium.
- Cargo insurance covers any loss or damage to goods while in transit as a single shipment or multiple shipments.
- It is extremely necessary to read the fine print while going in for cargo insurance. Read about geographical restrictions prior to signing on the dotted line.
The different types of voyage insurance therefore cover:
- Freight insurance – protects the merchant vessel should the cargo be damaged. This can occur while shuttling cargo from one location to the next.
- The port risk policy ensures that the ship is safe while docked at port. This is essential should an unprecedented event occur.
- The liability insurance cover is a requisite should the ship crash.
The point of opting for marine insurance is to make sure that the vessel and the cargo is taken care of at all times. Accidents do occur from time to time, and while the premium may be relatively large, it is foolhardy not to be insured. The fundamentals of a contract are to ensure that there is no breach. If there is (a breach), the breached party is entitled to claim damages. The basic advantage of an insurance policy is to make sure that you are covered. Without this basic umbrella, one can lose out big time. By paying the premiums in time and not ignoring the essentials, one can be safe not sorry.