Marine insurance is of two types, namely Marine Hull insurance and Marine Cargo insurance. While the former deals with the vessels and ships etc., the latter deals in the transit risks of goods or cargo. Therefore various nomenclatures are used for Marine insurance such as Cargo insurance, Transit insurance etc.

This Policy covers physical loss or damage to insured goods during transits by (a) Sea (b) Post or parcels (c) Rail/Road/Air. The scope of cover shall be determined by the Institute Clauses attached to the Policy

All Overseas Transits are subject to Institute Cargo Clauses A,B &C given by Institute of London Underwriters. The brief coverage is as under:

Goods (merchandise) dispatched by rail or road from any place in India to any place in India (not in conjunction with an overseas voyage) are subject to Inland Transit (Rail/Road) Clause A, B & C. The brief coverage is as under::

  • (a) Inland Transit (Rail or Road) Clause – A (All Risks): Covers All Risks of loss or damage subject to exclusions
  • (b) Inland Transit (Rail or Road) Clause – B (Basic Cover): Covers Physical loss or damage caused by:
    • (a) Fire, Lightning, Breakage of Bridges
    • (b) Collision with or by the carrying vehicle, derailment or accidents of the like nature to the carrying railway wagon/vehicle.
  • (c) Inland Transit (Rail or Road) Clause – C: Covers Physical loss or damage caused by
    • (i) fire
    • (ii) Lightning

Optional Extensions:

  • (a) For Inland Transit: Strike, Riot and Civil Commotion
  • (b) For Oversea Transit:
  • War, Strike, Riot and Civil Commotion
  • Duty and Increased Value Insurance ( for Imports only)
  • Seller’s Interest Insurance ( for Exports with C&F or FOB terms only)

Other Salient Features:

  • The policy is assignable
  • The Sum is fixed on ‘Agreed Value’ basis. Normally with a margin of 10% on invoice price for incidental expenses
  • The premium rates depends on factors like nature of cargo, scope of cover, packing, mode of conveyance, distance and past claims experience

Policies can be issued for (a) Specific Transit. (b) Marine Open policy with monthly declarations and (c) Sales Turn Over Policy with quarterly statements

General Exclusions:

  • Loss caused by willful misconduct of the insured.
  • Ordinary leakage, wear and tear.
  • Loss caused by 'inherent vice' or nature of the subject matter. For example, perishable commodities like fruits, vegetables, etc. may deteriorate without any 'accidental cause'. This is known as 'inherent vice'.
  • Loss caused by delay, even though the delay be caused by an insured risk.
  • Deliberate damage by the wrongful act of any person. This is called 'malicious damage' and can be covered at extra premium, under (B) and (C) clauses. Under 'A' clause, the risk is automatically covered.
  • Loss arising from insolvency or financial default of owners, operators, etc. of the vessel.
  • Loss or damage due to inadequate packing.
  • War peril - This can be covered on payment of extra premium.
  • Strikes, riots, lock-out, civil commotions and terrorism (SRCC) can be covered on payment of extra premium.