Business scenarios are dynamic. These ever-changing situations lead to uncertainties. It can be with regards to the safe delivery of goods. To protect against these unforeseen losses, one can opt for a marine insurance policy.
Marine insurance plan protects against the damage that is inherent during transit. This damage can occur at the time of loading/unloading of goods, at cargo terminals, and anytime between the point of origin to its destination. Most common types of damages that are covered by a marine insurance policy are sinking, collisions, fires, weather conditions, theft, jettison, improper storage by the carrier, damage due to equipment used in moving the consignments, strikes, war, and other natural perils. The insurance policy remains in force even during the transit via air, rail, sea or a combination of these modes.
While it is essential to insure your goods with a marine insurance policy, it is equally important they are protected with the right kind of policy. Let’s look at some factors that will ease out the process of selecting the right marine insurance cover –
Losses and damages covered
While buying commercial insurance, you must check for the various types of losses that are included in your policy terms. Lightning, rains, strong winds, etc. are a few natural causes that damage your goods during transit. While not only natural but jeopardies like burglary, theft, fires are included too. You must select the right policy depending on the various means through which your goods shall move to its destination.
Opting for a broader coverage that embraces a variety of risks will be beneficial as these situations are unanticipated. Generally, a marine policy excludes normal wear and tear of your goods. These exclusions differ among the insurers a smart choice would be to opt for an all-risk cover. It will aid in facing any financial blows to your business due to damage to your consignment.
Settlement of claims
Claims to your marine insurance are settled either on agreed value or actual cash value basis. Agreed value insurance policy, as the name suggests, reimburses the insurer the sum assured in case of a total loss to the consignment. For partial damage to the goods, the insurance company pays the replacement cost of such goods after accounting for the deductible. A deductible is an amount which the insured has to pay from his pocket.
Actual cash value cover insures the current market value as reduced by depreciation for the goods. It is an economical alternative as compared to the agreed value insurance and has a limited cover.
Insurance to your consignment should not be restricted to a particular product or order. An insurance cover is useful in case it covers all your shipments, you never know at what time these unfortunate contingencies might strike. For such purposes, you must select a policy with a longer tenure.
In case you’re an exporter with recurring orders, an annual policy will be preferable instead of a specific voyage policy. A few insurance companies also offer plans based on your sales turnover, which includes a sum assured for your annual turnover.
Thus, while selecting a marine insurance, the above points can serve as a useful reference point to determine whether a policy offers adequate coverage for your business or not. Make sure you compare across different online general insurance companies and their various plans and make the best choice for your business.