What Is Covered and Not Covered in Marine Insurance: Part 1 - What's Covered

Understanding Marine Insurance: Part 1 - What’s Covered by BTW Financial Services.

Marine insurance is essential for anyone involved in international or domestic cargo transportation. Whether you ship goods by sea, air, rail, or road, marine insurance protects your cargo from a variety of unexpected risks. But what exactly is covered under a marine insurance policy?

This two-part blog will clarify the inclusions and exclusions of marine insurance so cargo owners, exporters, importers, and logistics managers can make informed decisions.

What Is Covered in Marine Insurance?

Here are the major areas marine insurance typically covers:

1. Loss or Damage Due to Accidents

• Covers damage caused to cargo due to collisions, overturning of vehicles, derailments, or sinking of ships.

• Applies to both partial and total loss, depending on the type of coverage opted.

2. Theft or Piracy

• If cargo is stolen during transit or seized due to piracy in international waters, the insurer bears the financial burden.

3. Natural Calamities

• Covers loss or damage caused by floods, storms, earthquakes, lightning, and other natural events during transit.

4. Fire and Explosion

• Losses due to fire, combustion, or explosions en route are covered under marine cargo insurance.

5. General Average

• If part of the cargo is sacrificed voluntarily to save the vessel and rest of the cargo, marine insurance compensates for your contribution.

6. Loading and Unloading Accidents

• Covers damage that occurs while loading or unloading cargo at ports, warehouses, or terminals.

7. Warehouse-to-Warehouse Transit

• Protects your goods not just during the voyage but also during inland transport — from your warehouse to the consignee’s location.

8. Third-Party Liability

• If cargo causes harm to third-party property or life during transit, certain policies provide coverage for resulting legal liabilities.

9. Delay-Related Losses (Optional Cover)

• Some policies offer optional cover for losses due to delays in delivery or disruption in the supply chain.