Select
NotificationImgTo buy marine open policy

What is the Fleet Policy in Marine Insurance?

  • Author :
  • TATA AIG Team
  • Published on :
  • 11/04/2024
  • 2 min read

Accidents at sea are highly unpredictable, posing a great deal of risk to transport vessels transiting through them. Since vast amounts of goods and money are involved, a system to ensure their protection is necessary.

Here is where a marine insurance policy comes to the rescue. It is a crucial component of the global shipping and trading industry as it provides financial protection to the goods and vessels against a plethora of risks that they may face during the voyage.

In this article, we will explore fleet policy, its meaning, benefits, and much more! Keep reading to learn the complete details about fleet policy in marine insurance.

What is Marine Insurance

Marine insurance was introduced to protect the marine industry against the dangers and perils involved in various modes of transportation. It provides coverage for loss or damage caused to ships, goods, terminals, goods carriers, etc., during transit from one place to another.

A marine insurance policy covers various types of watercraft, such as cruise liners, yachts, container ships, and so on. It protects cargo owners, ship owners, and other parties from loss due to theft, accidents, or other unforeseen events.

Fleet Policy Meaning in Marine Insurance

Fleet policy is a part of marine insurance and is a customised arrangement that offers coverage to multiple vessels or vehicles owned by a shipping company or an individual trader. Instead of insuring each vehicle or ship separately, the owner can opt for a more cost-effective fleet policy.

Under fleet insurance, the insured is protected against any physical damage to the vessels, third-party liability or damage, and protection and indemnity coverage. You can customise the fleet policy to meet your unique business requirements.

Fleet Policy: Key Features

Before buying a fleet policy it is essential to know the key features so you can understand its scope better.

  • Terms of the Policy - The terms of a fleet policy largely depend on the policyholder's specific requirements. You can opt for a policy for a specific period or purchase an annual policy, which must be renewed every year. Some policies may also require the insured to incur out-**of-**pocket expenditures before the insurance coverage is paid.

  • Policy Coverage - Under fleet policies, the insured gets broad coverage, including vessel damage and third-**party liability, like damage to vessels, property, and personal injury cover. You may also get marine cargo coverage, pollution-**related damages, and much more.

  • Flexibility - Certain fleet policies offer flexibility to cargo or shipment companies that constantly add or remove vessels from their fleet. It allows them to remove or add vessels from the policy as required.

What are the Benefits of a Fleet Policy in Marine Insurance

Before you purchase a fleet policy, it is essential to know its benefits so you can make an informed decision and receive the right protection against losses and damage. Here are some of the benefits of fleet policy.

- Easy Administration - The fleet policy's most significant benefit is that it makes the administration of multiple vessel insurance easy and straightforward. Instead of purchasing separate insurance for each vessel, you can include multiple vessels in one policy and eliminate the need to manage multiple insurance policies.

**- Cost-Effective - Since all the vessels are insured under the same policy, it is less expensive than insuring each vessel separately. Thus, businesses that operate with multiple vessels can achieve cost-**effectiveness from fleet insurance.

- Uniform Coverage - Under the fleet policy, all the vessels get uniform coverage. It ensures that all vessels have the same level of protection against all kinds of damage.

- Provides Flexibility - Fleet policies offer flexibility to the policyholder. They allow the insured to adjust the scope of coverage, vessels, etc., as per the business requirement.

How to Select the Right Fleet Policy?

Choosing the right fleet policy for your vessels is extremely important. However, some crucial factors must be considered to make the best choice.

  • Policy Comparison - When looking for fleet insurance for your vessels, it is essential to compare policies from different insurance providers. You can find out which policy suits your needs and budget.

  • Coverage Limits - You must compare the coverage provided by different policies. It is wise to choose a policy that offers broader coverage to protect your vessels against damage and losses.

  • Check the Exclusions - Insurance policies have various exclusions to the policy. Therefore, before buying a policy, go through the list of exclusions to ensure it does exclude any essential risk coverage.

  • Calculate the Premium - Find out the premium you must pay each year for the policy to ensure it fits within your budget.

  • Insurance Company’s Reputation - The most crucial factor when buying a policy is the reputation and trustworthiness of the insurance provider. Find out if they are reliable and have a considerable claim payout record.

Why is it Important to Have Marine Insurance?

Marine insurance protects the business owners involved in the marine industry. It covers various types of risks, including perils such as fire, collision, theft, and weather-**related dangers like storms and hurricanes.

Under marine cargo insurance, the insured is protected against the damage or loss of goods transported by sea, land, rail or air. Here are a few reasons why marine insurance is essential.

  • Offers Financial Protection - The impact of financial loss from cargo or vessel damage can be significant, especially for small business owners. Marine insurance offers financial protection to businesses when unfortunate incidents occur, causing monetary losses.

  • Reduces the Risk - Marine insurance mitigates the risk involved in transporting goods or cargo from one place to another. The insurer offers protection to the businessman in case any mishap occurs and damage has been done.

  • Helps in Compliance - Many trade contracts mandatorily require those involved in marine business to have an insurance policy to protect the interest of all entities. Therefore, marine insurance can help in compliance with trade rules.

  • Boosts Global Trade - Marine insurance assures against losses and damage to ship owners, transport companies and traders. When losses are covered under insurance, it encourages traders to invest in and engage in marine business.

Conclusion

In this global era, there is no limitation of boundaries when it comes to trade. Therefore, the requirement for a marine insurance policy cannot be emphasised enough. The role of marine insurance is crucial as it protects global trade through various means of transport.

Big and small marine business owners can benefit from a cargo insurance policy from Tata AIG for multiple reasons. Tata AIG marine policies are flexible, simple and innovative, provide financial protection, and are designed for various types of business owners.

Frequently Asked Questions (FAQs)

  • Who can buy marine insurance?

  • Marine insurance can be purchased by all the entities that are involved in marine business, including:

  • Buyers

  • Sellers

  • Manufacturers

  • Import/export traders

  • Cargo owners

  • Ship owners

  • Shipping corporations, etc.

  • What is a port-risk policy?

  • A port risk policy is an insurance that protects the vessel or craft when it is in the port. Such insurance protects the vessel against damage or loss caused by fire, theft, etc.

  • What are the 3 major types of marine insurance?

  • The 3 types of marine insurance are:

  • Freight insurance

  • Hull and machinery

  • Marine cargo

Share This Article
facebooklinkedintwitter
Facebook Feeds
Recent Tweets
Share This Article
facebooklinkedintwitter
Facebook Feeds
Recent Tweets

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

Related Articles

Tata AIG Also Offers Insurance for the below products

Travel Insurance

Two Wheeler Insurance

Health Insurance

Car Insurance

scrollToTop