Looking for the right marine cargo insurance can be daunting for newly established shipping firms. That’s why we put up this guide to help you find the right insurance. But before we proceed, let us first determine how important marine insurance is for your shipping business.
Why is marine insurance important?
Marine insurance is designed to provide financial protection to ships. This is especially true since stakes are higher in vessels compared to other modes of shipment. Navigating the sea puts you at various risks such as losing valuable cargo, delays due to various conditions, damages from extreme weather and accidents, and even sinking. If you operate shipping vessels, you need to be insured to mitigate risks and reduce the financial impact that may arise from these perils.
What should a marine insurance cover?
The marine cargo insurance should protect you from risks that prevent ship owners like you from earning an income. These risks that could put your operation out of action include delays and damages to your vessel, which are caused by the following.
- Extraordinary weather. Extreme weather conditions can leave vessels stuck in ports, which affects your shipping operation. Worst, it can also damage your vessel should you get caught in storms while navigating the sea. Either way, you lose your finances unless your insurance protects you from such risk.
- Illness, death or injury onboard the vessel. Your crew can fall ill while in the middle of the sea. If he can’t be treated onboard, you have to go back or go to the closest port, causing delay on your shipment. The same goes for infections, poisoning, and even death at sea.
- Detention following pollution. If you get involved in a pollution incident, your vessel will be held while the police investigate the case. The same goes for oil or chemical spill in a busy shipping lane, wherein the area will be closed during the clean-up operation.
- Acts of Piracy. Piracy is becoming more problematic for shipping firms, especially in the waters of Nigeria, Somalia, and Indonesia. That’s why you also need to be protected from acts of piracy.Pirate attacks can cause damage and delays to your cargo, which should be both covered in your insurance.
- Hull and machinery damages. When your hull and machinery get damaged due to bad weather, collision, breakdown, and other marine-related mishaps, they need to be repaired. You will not be earning money during the period of repair, so it is vital that your hull and machinery insurance covers these damages.
Aside from perils that threaten your vessel, marine insurance cargo should also cover threats to ports that could hinder your shipping operation. These port perils include the following.
- Emergency port closure. This can happen following environmental concerns such as accidental chemical leaks, emissions, and spillages.
- Fire, earthquake, volcanic eruption, and other land disasters. These land disasters can happen anytime that can damage your warehouse, thus delaying your shipping operation. Reliable marine cargo insurance should also protect you from the financial impact of such calamities.
These are only a few of the possible coverages marine cargo insurance should have. However, these are already good indicators that you are getting protected from the financial impact of most marine-related risks. Make sure to ask insurance providers of these coverages before sealing the deal.