What Is Not Covered in Marine Insurance?

Explore the exclusions in marine insurance with BTW Financial Services in Part 2 of their informative series. Discover what risks are not covered to better safeguard your maritime assets. Contact them at insurance@btwimf.com or visit www.btwimf.com for more information.

1. Willful Misconduct or Negligence by the Insured

If loss or damage occurs due to intentional misconduct or careless handling by the cargo owner or transporter, the insurer is not liable. Example: Failing to secure cargo properly, or knowingly shipping damaged goods.

2. Improper Packaging

Marine insurance does not cover losses arising from poor or insufficient packaging. If your goods were not packed securely enough to withstand transit conditions, any damage resulting from that may be excluded from the claim.

3. Delay in Transit

Any loss or damage that occurs solely due to transit delays is not covered. Even if the delay causes financial loss (like loss of sale), it won’t be reimbursed unless explicitly added as a clause.

4. Inherent Vice of Goods

This refers to damages caused due to the natural properties of the goods themselves — like spoilage, evaporation, or corrosion — that are bound to happen even under normal conditions. Marine insurance doesn’t cover this.

5. Customs Rejection or Government Confiscation

If your cargo is seized or rejected by customs or government authorities due to regulatory issues or illegal contents, marine insurance won’t cover the financial loss.

6. War, Piracy & Nuclear Risks (Unless Covered Separately)

Basic marine insurance policies like ICC (C) often do not cover risks from:

• War or civil unrest

• Nuclear accidents

• Piracy in international waters To get this coverage, separate or extended clauses (e.g., War and Strikes Clause) must be added.

7. Use of Unseaworthy Vessels

If the goods are shipped using an unseaworthy or unauthorized vessel, and the insured was aware or should have been aware, any claim arising from that voyage is invalid.

8. Financial Default of Carrier

Marine insurance won’t cover loss if the carrier transporting your goods becomes bankrupt or defaults financially unless a special clause is included in the policy.

Marine Insurance

Marine insurance is essential for protecting goods during domestic or international transit, but no policy covers everything. Make sure to:

• Read the fine print

• Choose the right Institute Cargo Clause (A/B/C)

• Add optional riders as needed

A clear understanding of both coverage and exclusions ensures that your marine insurance policy truly supports your business continuity.