Who Needs Marine Insurance? A Guide for Indian Businesses

A worker in a hard hat and safety vest uses a tablet while overseeing operations at a port, highlighting the importance of marine insurance. The accompanying text from BTW Financial Services offers a guide for Indian businesses on this essential coverage.

If your business involves moving physical goods, you’re exposed to risks accidents, theft, fire, floods, or delays. Marine insurance protects against such losses. Unfortunately, many small and mid-size businesses think it’s only needed for international shipping. In reality, marine insurance is relevant to almost every sector that depends on the transportation of goods.

The Scope of Marine Insurance

Modern marine insurance goes beyond sea transport. It covers:

• Domestic and international movement

• All modes: sea, air, road, rail

• Door-to-door, warehouse-to-warehouse coverage

• Multiple policy types for different stakeholders (exporters, manufacturers, logistics firms, etc.)

Industries That Benefit from Marine Insurance

Exporters & Importers

This is the most obvious category. These businesses face cross-border risks like piracy, storms, loading/unloading damage, and customs-related delays. Marine cargo insurance provides essential coverage from origin to destination.

Manufacturers

From sourcing raw materials to shipping finished goods to dealers or warehouses, manufacturers often rely on road, rail, or multimodal freight. Marine insurance ensures their supply chain isn’t disrupted by a transport mishap.

E-commerce Sellers

E-commerce brands depend heavily on fast, safe deliveries. Marine insurance protects them from package loss, delivery damage, and courier mishandling—especially during inter-city movement.

Logistics and Freight Forwarders

Freight service providers must insure client goods in transit. Marine insurance helps them fulfil contract obligations while minimizing financial exposure from unforeseen losses.

Wholesalers & Distributors

Goods are often moved in bulk from central warehouses to retail outlets across cities. These large domestic shipments must be insured to avoid profit erosion from in-transit issues.

Pharmaceutical & Cold Chain Logistics

Temperature-sensitive or perishable goods (like vaccines, medicines, or fresh produce) require timely and secure transit. Even a small delay can lead to huge losses. Marine insurance helps recover such losses.

MSMEs & Small Traders

Even a single truckload of raw material or finished stock can represent a significant portion of an MSME’s working capital. One accident or theft can lead to major disruption making marine insurance not just helpful, but critical.

Business Scenarios Where Marine Insurance Is Critical

• Goods damaged due to flood while in a truck

• Theft of high-value electronics during transit

• Fire in the godown where cargo was temporarily stored

• Delay due to vehicle accident leads to spoilage of perishable goods

• Shipping container falls off the vessel due to storm

• Road blockade delays cargo delivery, causing contract breach

In all these cases, marine insurance can save your business from absorbing the full financial hit.

Why Even Small & Medium Businesses Need It

A common myth is: “Marine insurance is for big companies.” In truth:

• SMEs are more vulnerable to financial loss

• A single shipment often carries high working capital value

• Insurance premiums are affordable and proportional to coverage

• It gives peace of mind and credibility with clients and vendors

Today, many e-commerce and B2B marketplaces insist on sellers having marine insurance for large consignments.

Case Examples: Real-World Relevance

Example 1:

A Pune-based textile exporter sends goods to the Netherlands via sea. During transshipment, one container falls due to crane malfunction. Total loss = ₹7.5 lakh. Claim processed under marine cargo insurance.

Example 2:

An SME in Jaipur dispatches ₹12 lakh worth of furniture to Mumbai via truck. Due to fog, the vehicle crashes, and most items are damaged. The business had an inland transit marine policy and recovered 90% of the declared value.

Example 3:

A logistics provider transporting iPhones from Delhi airport to Kolkata via air faces a delay, and 4 boxes go missing. A claim is filed under the all-risk open marine policy.

Common Misconceptions

Misconception	Reality
Only needed for overseas cargo	Covers domestic, inland, and short-route cargo too
Marine = sea only	Covers air, rail, road, and sea
Too expensive	Scalable premiums based on cargo value and mode
Only large exporters use it	SMEs, local suppliers, and retailers also benefit
Claim process is too complicated	Transparent, if documentation and timelines are followed

If you deal with physical goods, marine insurance is not optional it’s essential. Whether you're shipping across oceans or across states, risks follow your cargo. A single truck accident, a warehouse fire, or a customs delay can eat into your profits or worse, shut your operations.

From startups and SMEs to global exporters, marine insurance is your financial safety net. Don’t wait for a loss to understand its value—insure your business today.