It is a akin to Goods-in-Transit insurance, which is the term used to describe the insurance against the risk of physical loss or damage to goods or property in transit domestically, but domestic transits can form all or part of a Marine Cargo policy.
Whilst the name of the insurance would suggest it gives cover to goods or property in transit by sea, this name stems from its roots, and it does cover land and air transits aswell as sea transits.
What are the marine insurance Institute Cargo Clauses?
Marine Cargo insurance cover is governed by Institute Cargo Clauses issued by the Institute of London Underwriters. By far the most common applicable clauses are Institute Cargo Clauses (A) which effectively provide All Risks cover. The Cargo Clauses (A) are supplemented by additional clauses such as Institute War Clauses (Cargo), Institute Strike Clauses (Cargo), Institute Classification Clause, Institute Cargo Clauses (Air), Institute War Clauses (Air Cargo), Institute Strike Clauses (Air Cargo), Institute War Clauses (sendings by Post) and other Institute Clauses that reflect the unique nature of international transportation, the laws applicable and the specific risks involved. More limited cover is provided by Institute Cargo Clauses (B) and Institute Cargo Clauses (C).
Insurable Interest In Marine Cargo Insurance
The insurable interest and responsibility for insurance of goods or property can change during the course of a transit due to contract conditions. The insurance should be arranged in accordance with the applicable terms of purchase or sale, as claims will only be met in accordance with the applicable contract conditions. It is possible to cover the contingent insurable interest in goods or property in transit when the insurance is the responsibility of another party. The contingent cover is called Buyers Interest or Sellers Interest depending on the whether the Insured is buying or selling, and the contingent insurer will meet claims for loss or damage to goods or property to the extent of their Insured’s insurable interest provided attempts have been made to enforce the contract conditions and these have been unsuccessful.
Marine Cargo insurance can cover goods worldwide, but it is not possible to provide cover to some territories due to legislation requiring the insurance to be taken locally or due to the high risk a territory may present.
Marine Cargo covers transit by own transportation or by third party carriers. The arrangement of own insurance should also be considered even when using a professional carrier, as the carrier’s contract terms may limit liability to a level that may be insufficient to cover the financial impact of loss or damage caused during transit. A carrier’s conditions should always be checked for adequacy, and note a carrier may be able to offer increased liability or full value cover on request if the standard limit is insufficient and this may be considered a viable alternative to arranging own cover.
Marine Storage Risks and Stock Throughput Insurance
Marine Cargo insurance includes loss or damage whilst in storage in the ordinary course of transit. Cover can be extended to cover goods in storage that are not in the ordinary course transit. This is commonly referred to as Stock Throughput Insurance, but note there must be some transit insurance included to be eligible for this type of policy. Stock Throughput insurance is a useful, readily available and cost effective source of static stock cover that is particularly useful where one or more outside storage locations are used rather than own storage facilities and there is no processing or manufacture of goods.
How do I buy marine cargo insurance?
Marine Cargo insurance is a specialist class of insurance underwritten by mixture of general insurers with a specific marine cargo capability and specialist marine underwriters. Marine Cargo insurance can be obtained on a specific transit basis by the issue of a certificate or policy, or on an annual basis where all goods in the course of transit are covered. You can apply on-line for quotes on our site or call us direct to discuss your requirements with a broker.
How much does marine cargo insurance cost?
The premium is usually calculated by applying a rate to the value of the goods or property, with the rate being assessed taking into account the type and value of goods or property, mode of transportation and the to/from destinations. The premium will normally include War and Strikes cover, but this should be checked before cover is accepted.