Marine insurance has an important role to play in the shipping industry and the shipowners ensure the ships that protect them against claims by third parties by purchasing “protection and indemnity” insurance. Cargo is usually insured against Storms, waves, and all type of wind or water damage. In order to get protected against losses incurred from war, the owner of the ship must purchase separate war-risk insurance or pay an additional premium to include war -risk in the basic policy. Incidents like piracy and possibilities like cross-border shoot-outs are also a major threat when it comes to water transportation and therefore in order to avoid any loss because of such events and happenings, in the interest of the corporation and the transporter, it is always beneficial to have marine insurance. Marine insurance is advantageous for shipping corporations and transporters as it helps to reduce the financial loss due to loss of important cargo. It also helps in highlighting the duty, dedication and the straightforwardness of the insurance companies.
Types of insurance:-
Cargo Insurance: Cargo insurance relates to the cargo of the ship and also pertains to the belongings of a ship’s voyagers and provides protection against all risks of any external cause that takes place during shipping, whether by land, sea or air. Cargo insurance provides a cost-effective way to cover physical loss or damage to goods in transit.
• Machinery Insurance: Machinery insurance is the protection of a vessel against damage. The vessel, including the machinery and equipment, is insured on the full value and, depending on the chosen cover, the following risks may be indemnified: The actual or constructive loss that may have caused when apart of the machinery is being repaired and other equipment, expenses paid for prevention, minimizing of damages or calculation of loss, are caused by an insured peril.
• Liability insurance: is an insurance system to protect the insured from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event they are sued for claims that come within the coverage of the insurance policy. The individuals or companies that faced a common peril, formed a group and created a self-help fund out of which to pay compensation in case of loss. The modern system is based on dedicated carriers, usually for-profit, to offer protection against specified perils in consideration of a premium. Liability insurance protects against the claims of the third party, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract. Usually, the damage caused intentionally or as a contractual liability are not covered under liability insurance policies. In case of a claim, the insurance carrier has the right to defend the insured. The legal costs of defence normally do not affect policy limits unless the same is been
Freight Insurance: Freight insurance provides protection to merchant vessels’ corporations that may lose money in the form of freight in case the cargo is lost due to the ship meeting with an accident. This type of marine insurance solves the problem of companies losing money due to unprecedented events and accidents occurring.
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