Page 48 - The Insurance Times October 2025

Consumers

Do’s and Don’ts for Purchasing Marine Cargo

Insurance in India

Do’s (Things You Must Do) Why? If you insure for less, the Average Clause applies,
and you’ll receive only proportionate claim amounts.
1. Assess the Type of Cover Needed
Marine cargo insurance isn’t “one-size-fits-all.” 4. Check Policy Wording Carefully
For domestic movement, opt for Inland Transit Poli- Study inclusions, exclusions, and terms. Look for:
Included risks: Fire, theft, piracy, collision, natural
cies covering road/rail/air/river transport.
calamities.
For imports and exports, go for Specific Voyage
Policies or Open Covers if you ship frequently. Excluded risks: Delay, inherent defect in goods,
poor packaging, ordinary leakage.
Select the right Institute Cargo Clauses (A, B, or C):
Clause A: All-risk cover (broadest protection). Deductibles and excess clauses: Understand what
you’ll pay before the insurer steps in.
Clause B: Named perils like fire, earthquake,
and lightning. Tip: Don’t rely on assumptions—discuss every clause
with your insurer or broker.
Clause C: Basic protection against major perils
like collision or capsizing. 5. Consider Add-On Covers
Depending on your cargo and trade region, you may
Tip: For fragile or high-value goods, Clause A is advis-
need:
able despite the higher premium.
War & Strike Risks Cover (political unrest, terror-
2. Declare Accurate Cargo Details ism, war).
Always provide complete and truthful details of: Storage Cover (goods stored at ports/warehouses
Nature of goods (chemicals, machinery, perish- during transit).
ables, etc.).
Duty Insurance (covers customs duty losses if cargo
Packaging (cartons, containers, bulk, drums).
is destroyed before clearance).
Mode of transport (air, sea, rail, road).
Contingency Cover (protects sellers if the buyer
Transit route (direct or via high-risk areas). defaults on arranging insurance under FOB/CIF

Why? Mis-declaration can result in claim repudiation. contracts).
For example, not disclosing that goods are tempera- Why? These add-ons plug gaps that standard policies
ture-sensitive may void coverage if spoilage occurs. often leave out.
3. Opt for Adequate Sum Insured 6. Maintain Proper Documentation
The sum insured should reflect the actual total value of Smooth claim settlement requires:
goods in transit, not just the invoice cost. Insurers rec- Commercial invoice
ommend:
Packing list
Invoice value + freight charges + customs duty +
10% margin (to cover incidental costs like survey Bill of lading/airway bill/lorry receipt
fees, re-shipment, etc.). Surveyor’s report (in case of loss)

44 October 2025 The Insurance Times