Know about Marine and boat Insurance
Marine Insurance policies provide the financial cover to the considering ship and its equipment and also the workers and the shipping company which has the insurance contract between the insurer and the insured. According to features of a marine insurance it has mainly two sectors namely,
- Hull Insurance
- Cargo Insurance
This insurance policy provides the financial cover to the considering ship and it’s equipment and the workers and the shipping company.
This policy can be obtained either by the cargo holder or the shipping company to protect the cargo against accidents.
Types of Cargo Insurance
- Open Policy - This policy provides the financial cover against any damage that would occur to the cargo within a certain time period. Therefore the policy is open to carry goods up to the given value within the given time frame.
- Valued Policy – In this policy cargo are insured only up to a specific value based on each and every journey. (Ex:- A valued policy can be obtained up to 70 million from Colombo to Singapore)
- Floating Policy – In a floating cargo Insurance policy a shipping company determines of an extreme of values which are related to a specific Cargo policy since they cannot be predetermined the real value of the cargo. (Ex:- A floating insurance policy which is valued at 50-100 million)
Compensation procedures in marine insurance
- Actual Total Cost - In an event where the considering hull or the cargo is fully destroyed (100%) the total market value of the hull and the cargo will be paid as compensation. (Ex:- A ship has been fully destroyed from fire)
- Constructive Total Cost – In this situation the ship and the cargo is critically damaged and they cannot be repaired. The insurance company considers this as a full loss and pays the full compensation for the cost of the damaged ship.
- General Average – Ina situation where the captain of the ship makes a decision to dispose some of the cargo with the genuine intention of protecting the other cargo and the ship. In this scenario the compensation will be paid based on general average method. In this method all cargo holders who suffer loss will be compensated from other cargo holders as well as from shipping company. ( Insurance company of shipping company and cargo holder will be compensated)
- Particular Average – In this method compensation for a loss will be paid only to a Cargo holder who meets with the accident since it is a genuine accident. In this situation he has to pay compensation from his insurance company and others will not contribute to the loss. (Ex:- A specific container has been damaged in loading to a ship)
- Deviation of voyage – In a situation where the considering shipping company has not followed the agreed or assigned path it is considered as a deviation of voyage. Generally insurance companies do not pay compensation in a deviation of voyage. But if the deviation has occurred due to following reasons they will pay compensation in order to repair the ship. (Situations like avoiding a natural disaster or to avoid a war zone)
- Jettison – This is a specific situation where the captain of the ship or the authorized officer gives instructions to dispose some of the cargo to the sea with the pure intention of protecting all the other cargo and the rest of the ship.
These are very basic associated with any marine insurance policy. Through understanding these basic polices it will be easy to get a marine insurance to your cargo from the top marine insurance providers.