Page 210 - India Insurance Report 2023- BIMTECH

198 India Insurance Report - Series II

Challenges Faced by Exporters

in obtaining adequate and right Marine

Cargo Insurance Cover

- Samiran Lahiri
23 AIII, Executive Director Cum C.E.O.;
Preferred Partners Insurance Brokers (P) Ltd.
- Prof (Dr.) Abhijit K Chattoraj
Chartered Insurer : Dean and Professor
Birla Institute of Management Technology

1. Introduction

According to Global Trade Outlook and Statistics (WTA), The global value of world merchandise
trade was US$ 25.3 trillion in 2022; It was merely 6.45 trillion U.S. dollars in 2000. The growth in world
trade has been phenomenal since 1950, when it stood at US $61.81 bn. The cargo and goods in transit
insurance in the context of the ever-burgeoning world, trade plays a vital role. The exports/ Imports
emanating from any part of the world, in general, are insured against Institute Cargo Clauses (A- All
Risks), B or C or Institute Cargo Clauses (Air). These are globally accepted uniform insurance protection
covers used by insurers worldwide. The International Underwriting Association of London (I.U.A.),
formerly the Institute of London Underwriters (I.L.U.), is a body that drafts the wording. These clauses,
especially the I.C.C. (A) backed by Institute War, Strike, Riots, and Civil Commotion clauses, are used
for general commodities. The insurance protection attaches from the time goods leave the seller’s warehouse
continues during the ordinary course of transit, including transhipment (if any), intermediate storages (if
any) within the custody of the carriers/port authority, etc., till it is delivered at the final named warehouse
of the buyer at the destination. There is some time limitation for completion of the inland transit after the
discharge of cargo at the final seaport/airport of discharge, which happens to be 60 days in ocean transit
and 30 days in air transit. There are other sub-sections on the termination, very explicitly mentioned in
the clauses. The most sought-after insurance coverage is against All Risk terms as per the I.C.C. (A) or
I.C.C. (Air), which covers all maritime/road, rail, and air transit perils except certain pre-specified
exclusions. Some notable exclusions are any loss or damage to the cargo due to wilful misconduct of the
assured, insufficient or unsuitable packing, inherent vice, trade losses, and the vessel’s unseaworthiness if
the assured is privy to such fact, delay, etc. There are restricted covers as per I.C.C. (B) or I.C.C. (C) terms
at lower premium rates. The cargo insurance premium rates vary from Insurance company to company,
country to country. There are countries where fixed tariff structures apply to all the Insurers. The above
description is a prelude to a better understanding of the problems mentioned in the following sections
towards getting sound Marine Cargo insurance coverage in the following circumstances.