Marine Shipping And Marine Freight Insurance

• What is Marine Freight Insurance (and how it differs from marine shipping insurance)

• What Does Marine Freight Insurance Typically Cover?

• Key Risk Factors That Change Your Premium

• Recent Events

• Quick Summary Table

• Sources

If you transport goods internationally, marine freight insurance acts as your financial safety net. It protects cargo while it’s on the ocean, in the air, on rail, or by road as part of a multimodal journey. With changes in premiums and risk perceptions due to geopolitics, inflation, and claim trends, understanding marine freight insurance helps SMEs and logistics managers find the right coverage at the right price. Global marine insurance premiums rose to USD 38.9 billion in 2023, highlighting how quickly this market and its risks are changing.

What is Marine Freight Insurance (and how it differs from marine shipping insurance)

"Marine shipping insurance" is often used broadly to cover hull (the ship), liability, and cargo. Marine freight insurance, on the other hand, focuses on the cargo itself, covering physical loss or damage to goods in transit. Freight (or "freight interest") policies can also protect the freight charges that a carrier could lose if cargo is lost.

What Does Marine Freight Insurance Typically Cover?

Typical coverage under marine freight insurance includes:

- All-risks or named-perils cover for physical loss or damage to cargo

- Theft, pilferage, and non-delivery

- General average and salvage charges (when cargo is sacrificed to save the voyage)

- Fire, explosion, collision, capsizing, and grounding

Exclusions often include inherent vice, inadequate packing, ordinary leakage or wear and tear, delays, and war or strikes unless specifically endorsed (SRCC or war risk).

Key Risk Factors That Change Your Premium

Premiums for marine freight insurance change based on:

- Cargo type and value (electronics and chemicals compared to garments)

- Route risk (for example, the Red Sea or Strait of Hormuz now attract significant war-risk surcharges)

- Claims history and packaging quality

- Market conditions and reinsurance costs

Recent attacks in the Red Sea pushed war-risk premiums from about 0.3% to as high as 0.7–1% of the ship's value, demonstrating how quickly risk can increase.

Recent Events

USD 38.9 billion: Global marine insurance premiums in 2023, up 5.9% year-over-year.

Damaged goods or poor handling: The top cause of marine claims by frequency (AGCS).

War-risk premiums: Red Sea rates more than doubled to as much as 1% of ship value

after renewed Houthi attacks.

Quick Summary Table

Topic	What to know
Scope	Marine freight insurance = protects cargo; broader “marine shipping insurance” can include hull & liability.
Core covers	Physical loss/damage, theft/pilferage, general average, salvage charges.
Common exclusions	Inherent vice, poor packing, ordinary leakage, delay (unless endorsed), war/SRCC (unless added).
Premium drivers	Cargo value/type, route (Red Sea/Hormuz), claims history, reinsurance/market pricing.
Top claim trend	Physical damage from poor handling/packing, per AGCS.

In today’s unpredictable trade environment, marine freight insurance is essential, not optional. Be aware of what’s covered, examine exclusions closely, and factor in route-specific surcharges so you are never underinsured when a claim occurs.

Sources

• International Union of Marine Insurance (IUMI) – global premium base USD 38.9bn (2023).

• Allianz Global Corporate & Specialty (AGCS) – damaged goods/handling is the top marine claim by frequency.

• Reuters / FT / Insurance Review – war‑risk premiums in the Red Sea and Hormuz surged to 0.5–1% amid ongoing conflict.

• Tata AIG, ICICI Lombard, PolicyBazaar – definitions, policy types, and exclusions for marine and cargo/freight insurance.