Reasons Why You Should Buy Marine Insurance

Marine insurance is vital to all shippers. It is true that accidents do not happen with each trip. However, you should not take chances, mainly if you usually ship high-value goods. The good news is that there are many options to choose from regarding insurance coverage. This gives you the chance to select a policy according to your needs and financial capabilities. Why is buying marine insurance a good idea?

Protection Against Accidents

You have the option to send your shipment without insuring it. However, this means that you will be bearing the financial burden that comes with a financial loss in case of damage to goods. It is true that choosing a reliable logistics provider and packaging your shipment well minimizes risks. Some destinations are safer than others, too. However, since the shipment with pass through many hands before reaching its destination, it is advisable to insure it.

Carriers Might Not Pay for Everything

Carriers have liability, as well. However, their contracts usually set a limit to their responsibility. While this means that you will get some compensation in case of anything, it might not be much, especially when there are substantial losses. Understand that a carrier might not pay anything, as well. If the damage was a result of specific circumstances such as “Act of God,” you might not receive any compensation. You might also not get any benefit in case of accidental damage of goods, especially during handling operations by the shipper (consignor) and the receiver (consignee).

The Handling of Claims Is Faster

Compared to liability claims, settling marine insurance claims is faster. Liability claims usually need comprehensive investigation if the cause of damage is not clear or is extensive. In some cases, the carrier might make objections that might delay the process even further. For instance, they can claim that the consignor or consignee’s actions contributed to the loss. This would mean more expenses on your part as you try to prove that you deserve compensation.

A Long-term Commitment Is Not Mandatory

Marine insurance differs from all other insurance categories. Since you will not have to commit for the long-term, you will not have to worry about expensive monthly premiums. If you would only be shipping goods once, there is the option of buying cover for a single trip. This policy works perfectly if you usually ship items infrequently. Marine insurance is also customizable. For instance, you can opt for a policy that covers your goods while in storage before and after shipping.

It Covers General Average Costs

a young man in suit in his office showing an insurance policy and pointing with a pen where the policyholder must to sign

General average refers to the equal sharing of losses resulting from sacrificing part of the cargo or ship to save the whole in an emergency. For instance, if a fire occurs and it is put out in a manner that damages some cargo with water, you will end up in an instance of the general average. The same will happen if cargo is jettisoned to free a grounded vessel. Marine insurance covers such costs.

Since damage can occur anywhere, including at the port, you should choose your freight demurrage and defense policy very carefully. You ought to be careful to select the right insurance provider, too. You need a reputable company with staying power.

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