3 Types of Marine Insurance for International Sea Freight
The topic of insurance for international sea freight is complex and encompassing. It has been broken down here into a few main categories to clear through the complexity and to help clients gain clarity in regards to their marine insurance options.
The different types of insurance each have their own costs and advantages, depending on the individual client and the nature and scope of their business. The three main types of insurance for international cargo transportation are Hull Insurance, Cargo Insurance, Protection and Indemnity Insurance.
1. Hull Insurance Hull insurance is a marine insurance that primarily insures the torso and hull of the ship in conjunction with articles or pieces of furniture in the ship. In the event of a collision or severe weather, damage done to the ship is covered. The owner mainly takes out this type of insurance to protect agains loss to the ship in case of problems that arise. 2. Cargo Insurance Cargo insurance mainly caters to international sea freight aboard the ship. It also applies to the possessions of the ship’s voyagers. It applies in the event of loss or damage to the cargo being shipped overseas. Damage is evaluated and taken into consideration so that clients are compensated for the percentage of their cargo that is lost or damaged. Value of said cargo is determined in advance to ensure ease of financial transaction for all parties. 3. Protection and Indemnity Insurance Protection and Indemnity insurance is a type of marine insurance that is written in conjunction with the hull and machinery policy. It protects the vessel and its owners and operators for the liability of bodily injury. It can be customized to cargo legal liability, excess towers and collision coverage, liability protection for passenger’s baggage and personal effects. In addition to these international cargo shipping insurance policies, there are subset policies which allow for greater customization to meet the needs of individual clients, based on factors such as the size and scope of their business. These can include voyage policies, time policies, mixed policies, open/unvalued policy, valued policy and port risk policy.
Insurance on goods being transported overseas should be considered carefully and thoughtfully, as there are many factors to take into account. When used effectively, the various services and policies work in conjunction to facilitate and easy, safe and efficient business transaction for all involved parties.