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Marine Insurance in India: A Complete Guide for Exporters & Importers
- Interns @btwimf.com
- Jul 19
- 4 min read
Updated: Jul 24
In today’s fast-paced global trade environment, businesses involved in international shipments face many risks, from cargo theft and vessel accidents to weather-related delays. For Indian exporters and importers, marine insurance acts as a financial safety net that protects goods in transit and provides peace of mind.
Whether you’re shipping textiles to Europe, importing machinery from China, or distributing electronics domestically, this guide will cover the basics, types, benefits, and practical steps of marine insurance in India.
🚢 What is Marine Insurance?
Marine insurance is an insurance policy designed to cover loss or damage to goods, ships, or cargo during transportation over water, air, or land. While traditionally linked to sea transport, marine insurance now extends its protection to air freight, rail, and road transport, making it very versatile for modern supply chains.
📦 Who Needs Marine Insurance?
Marine insurance is essential for:
Exporters and Importers: To protect their goods from the moment they leave the warehouse until they reach their destination.
Freight Forwarders and Transporters: For liability protection and compliance with trade terms.
Logistics and Supply Chain Companies: For smooth cross-border operations.
Manufacturers and Traders: Who ship raw materials or finished goods across states or countries.
Whether you handle small packages or full container loads, having marine insurance is often required by contract under Incoterms like CIF (Cost, Insurance, and Freight).
🔍 Types of Marine Insurance in India
1. Cargo Insurance
This is the most common type used by businesses. It protects goods being transported and covers losses or damage from the start of the journey to delivery.
2. Hull Insurance
This covers physical damage to the ship, vessel, or carrier. It is typically used by shipowners or large logistics operators.
3. Freight Insurance
This protects the shipping cost (freight) that the transporter could lose if the cargo is damaged or undelivered.
4. Liability Insurance
This covers legal liabilities due to third-party damages during cargo handling or transportation.
✅ Coverage Under Marine Insurance Policies
Most marine insurance policies in India cover the following:
Fire, explosion, or accidents during transit
Natural disasters like storms, lightning, and earthquakes
Theft, pilferage, or non-delivery of goods
Collision or overturning of the vehicle or ship
Damage during loading or unloading
Vessel sinking, stranding, or capsizing
General average and salvage charges
You can also choose All Risk policies or Named Perils policies based on the value of the cargo and your risk tolerance.
🚫 What Marine Insurance Doesn’t Cover
Like any other insurance product, marine insurance has exclusions:
Willful misconduct by the policyholder
Improper or inadequate packaging of goods
Normal wear and tear or leakage
Delay in transit unless specifically covered
War, strike, nuclear events (can be covered through add-ons)
Make sure to review the policy exclusions and limitations before purchasing to avoid disputes during claim settlement.
💰 How is the Premium Calculated?
Marine insurance premiums in India depend on:
Nature of goods (perishable, electronics, chemicals, etc.)
Mode of transport (sea, air, road, or multi-modal)
Value of shipment
Distance and shipping route
Past claim history
For instance, shipping fragile electronics by air from Hong Kong may have a higher premium than shipping garments by sea from Bangladesh.
📑 Documents Required for Buying a Marine Insurance Policy
To issue a marine insurance policy, the insurer typically needs:
Commercial Invoice
Packing List
Bill of Lading/Air Waybill/Lorry Receipt
Purchase Order or Letter of Credit
Marine Proposal Form
Transit details and nature of goods
Frequent shippers can also choose open or annual marine policies to save time and costs on multiple shipments.
🧭 Marine Insurance and Incoterms
Understanding Incoterms is essential when buying marine insurance.
For example:
CIF (Cost, Insurance, and Freight) requires the seller to buy insurance.
FOB (Free on Board) means the buyer must arrange insurance.
Getting this right is crucial to avoid coverage gaps or claim rejections.
For an overview of Incoterms and their insurance impact, refer to:
👉 ICC Incoterms Guide (International Chamber of Commerce)
🧠 Why Marine Insurance Matters for Indian Exporters & Importers
Marine insurance is more than just a formality; it plays a crucial role in:
Minimizing financial risk due to loss or damage
Complying with trade agreements and buyer requirements
Building buyer confidence with proof of cargo protection
Ensuring smooth cash flow even after accidental loss
Speeding up claim processing, especially for international shipments
💡 Tips for Choosing the Right Marine Insurance Policy
Tips for Choosing the Right Marine Insurance Policy
Always choose IRDAI-approved insurers or brokers.
Compare policies not just by price, but also by coverage.
Look for claims settlement history and customer service ratings.
Keep clear records of transit timelines and handling procedures.
Don’t under-insure—always cover the invoice value plus shipping cost plus 10%.
📌 Final Thoughts
Marine insurance is essential for any Indian business involved in trading, manufacturing, or transporting goods. It protects against cargo loss and unforeseen accidents, ensuring your operations remain financially stable and your global supply chain stays strong.
📚 References:
IRDAI – Marine Insurance Guidelines
ICC Incoterms Guide
Marine Insurance Overview – Investopedia
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