Advantages And Disadvantages Of Marine Insurance

cargo ship in the distance

Risks of Marine Transportation

The transportation of goods by sea is quite complex. Once the goods leave your hands, they are in the hands of many other people, and anything could go wrong. The risks associated with marine insurance are vast, so you need to ensure you get the right marine insurance. 

Marine insurance ensures financial stability for businesses, prevents financial loss for goods in transit, and helps businesses cope without worrying about risks. Marine insurance offers coverage for goods wherever they are in the world. Payment can also be made for an annual or single trip cover. 

Marine insurance has several benefits. Fortunately, different policies cover various types of businesses and products.

Ensure Financial Stability Of The Business

Most businesses use sea transport because they move items in large quantities. Until the cargo gets to its destination, this is a large shipment that is worth a lot. 

It is natural for businesses to worry about the impact the huge loss will have on the business. Marine insurance helps businesses to safeguard against financial losses should anything happen to the cargo. 

Marine Cargo Policies Are Assignable

Marine insurance covers the goods from the moment they are removed from the warehouse to the port and beyond. Since the goods often move from one person or business to another, marine insurance policies are designed to be assignable. 

Annual Or Single Trip Policies

Unlike other insurance policies, which require annual coverage, marine insurance policies can be done on a per-trip basis or annually, depending on how often you ship goods. Annual rates are usually cheaper for companies that import and export goods several times a year. 

However, a single trip policy is ideal for small businesses that handle small volumes of goods a handful of times a year, or even only once. This way, businesses don’t feel like they have to pay an annual rate, yet they do not need it. 

Marine Insurance Covers A Range Of Risks

There are several marine insurance policies, but they tend to cover a range of risks. For example, if you opt for comprehensive cover, you will be protected against risks when the goods leave the warehouse to the port and beyond. 

It Covers All Modes of Transport.

Other risks covered include acts of terrorism, acts of nature, ship collisions, damage resulting from human error, and many more.

The other policies cover partial losses, but they also cover the main causes, including damage or loss of goods should the ship sink or during a collision. These policies also cover damages associated with other modes of transportation. 

Disadvantages of Marine Insurance

Although marine insurance has several advantages, it also has several downsides. They include;

  • Claims will not be paid in case of personal interference.
  • Because of the volume of goods involved and the risks involved, marine insurance can be costly.
  • You may have no choice about having marine insurance because most buyers will not accept doing business with a company operating without marine insurance.

The benefits of marine insurance far outweigh the costs. You have more to gain by getting marine insurance. What you need to do is decide the policy that is best suited for you.