There are different types of marine insurance policy options, which are essential for businesses involved in trade and transport. These policies cover a wide range of risks and are tailored to specific needs.

Below is a simple breakdown of the key classification of marine insurance.

• Hull and Machinery Insurance (H&M)

Hull and Machinery Insurance covers physical damage to the ship, including its body (hull), engines, and mechanical parts. It is vital for shipowners, mortgagees, or other parties, as it protects their main asset, the vessel. This type of marine policy includes sub-types such as:

• Time Hull Policy

• Voyage Hull Policy

• Fleet Insurance

• Builder’s Risk Policy

• Port Risk Policy

These marine insurance policy types in India are widely used in both commercial and private shipping. This kind of plan can be a total loss only (TLO) or an all-risks policy, depending on whether it covers only the vessel's total loss or partial loss or damage.

• Cargo Insurance

A cargo insurance policy protects goods in transit against loss or damage during transportation by sea, air, road, or rail. It is one of the most common types of marine cargo insurance policies.

Sub-types of cargo insurance include:

• Specific Cargo Policy

• Open Policy

• All Risk Policy

• Named Perils Policy

• Voyage Policy

• Time Policy

• Warehouse to Warehouse Cover

This classification of marine insurance ensures exporters and importers can recover financial losses during transit.

• Marine Liability Insurance

This kind of marine policy covers legal liabilities arising from maritime operations, including damage to third parties, environmental harm, and cargo mishandling. Liability insurance can be taken by shipowners, charterers, operators, managers, or other parties involved in maritime activities.

• Sub-types include:

• Protection and Indemnity (P&I)

• Charterers Liability

• Ship Repairers' Liability Insurance

• Freight Demurrage and Defence (FD&D)

Among the various marine policy types, liability insurance is crucial for owners, operators, and charterers facing legal claims or lawsuits.

• Freight Insurance

A freight Insurance policy covers the loss of freight charges that the shipping company or carrier may face if the cargo is lost or damaged in transit. It ensures that the freight owner still receives compensation for transportation costs, even when the goods do not reach the destination.

This type of marine insurance policy is vital when freight is paid in advance or when recovery is uncertain after a loss.

• Protection and Indemnity (P&I) Insurance

Protection and Indemnity (P&I) Insurance is a specialised marine insurance policy that covers third-party liabilities faced by shipowners and operators. It includes protection against crew injuries, environmental pollution, cargo damage, collision liabilities, and wreck removal costs.

Offered by mutual P&I clubs, this classification of marine insurance policy provides broader coverage than standard marine policies. It is essential for vessels engaged in international shipping with high legal exposure.

Floating Policy

A floating policy in marine insurance is a marine insurance policy that covers multiple shipments under a single policy. It is used when the exact shipment details, like port, date, or quantity, are initially not specified at the time of taking the insurance. It is a convenient marine and cargo insurance solution for frequent shippers, such as exporters.

As goods are shipped, declarations are made to activate coverage. This marine insurance type simplifies administration and ensures continuous protection without needing a new policy for every consignment.

Voyage Policy

A voyage policy is a specific marine insurance policy that covers cargo or a vessel for a particular journey, from the port of departure to the destination. It does not consider time but solely the voyage route, and it terminates when the voyage ends. A voyage policy can cover either hull, cargo, or both.

This marine insurance type is ideal for single shipments and is commonly used by traders who need coverage for occasional or infrequent consignments.

Time Policy

A time policy protects for a specific period, such as 6 months or 1 year. It is one of the most common types of policy in marine insurance. The policy covers any voyage undertaken by the insured vessel during the policy period. It covers risks that arise during this time, regardless of the number of voyages undertaken.

A time policy can cover either hull, cargo, or both. It is beneficial for fleet owners and traders seeking time-bound coverage rather than voyage-specific protection.

Mixed Policy

A mixed policy in marine insurance combines elements of both voyage and time policies. It offers coverage for a particular voyage within a fixed time period, making it highly flexible.

Such a marine insurance type is suitable for shipowners who require protection during a journey but also want to be insured in the event of delays. It balances route-specific risk with time-based contingencies.

Port Risk Policy

A port risk policy in marine insurance provides coverage while a vessel is stationary or undergoing repairs at a port. It can cover either hull, cargo, or both against risks such as fire, theft, or accidents while the vessel is not at sea.

Such a marine insurance type is crucial when ships remain docked for long periods and are not covered by regular time or voyage policies during inactivity.

Named Policy

A named policy in marine insurance covers only those perils that are specifically named in the policy document. The policy does not cover any perils not named. It is highly specific and used when all shipment details are known in advance.

This marine specific policy offers greater control but less flexibility than open or floating policies. It is suitable for single shipments with known risk profiles and values.

Fleet Policy

A fleet policy covers multiple ships under a single policy. The policy covers all the vessels in the fleet for the same perils and conditions, and can cover either hull, cargo, or both. It reduces paperwork and administrative burden for companies that operate several vessels.

This type of marine policy is cost-effective and ideal for shipping companies or logistics firms. Unlike single vessel policies, this option simplifies renewals and ensures unified terms across all covered vessels in the fleet.

Blanket Policy

A blanket policy provides comprehensive coverage for all shipments within a defined scope, without requiring individual declarations. Here, you pay a fixed premium based on the estimated value of all the shipments during the policy period. It is helpful when goods are constantly being moved, and tracking each consignment is difficult.

This marine and cargo insurance policy is widely used by large trading businesses to ensure that all goods in transit are protected under a single, flexible contract.

Single Vessel Policy

A single vessel policy insures only one ship, often for a specified time or voyage. It is one of the simplest marine insurance types and is commonly used by small shipping businesses or individual vessel owners. The policy covers the vessel for the perils and conditions specified in the policy document, and covers either hull, cargo, or both.

This specific marine insurance policy gives dedicated coverage and is easier to manage for those not operating a large fleet or network of vessels.

Wager Policy

A wagering policy in marine insurance is based on a bet rather than an actual insurable interest. It offers no legal recovery in case of loss, as it violates the principle of indemnity.

Although historically used, this policy type is void in a court of law, since it is not a written plan. It remains a theoretical marine insurance example, important only for understanding the evolution of marine policies.

• Protection from Financial Loss- The various types of marine insurance policies help businesses recover from cargo loss, vessel damage, or liability claims, ensuring financial stability during unforeseen events.

• Coverage During International Transport- Every marine specific policy is designed to protect cargo or vessels across long and risky global routes, offering peace of mind during complex international shipments.

• Rising Risks Due to Complex Supply Chains- With multi-modal transport and multiple handovers, the risk of damage, theft, or delay increases. The types of marine cargo insurance help address these challenges at each stage.

• Role in International Contracts and Incoterms- Insurance is often a contractual requirement under Incoterms. Choosing the right types of marine insurance policies ensures compliance and reduces disputes between buyers and sellers.

• Risk Mitigation- Marine policies reduce business risk, protect reputation, and ensure continuity, especially when operating in high-risk shipping lanes or uncertain political regions.

Picking the right marine insurance is not just a box-ticking exercise. It requires understanding your cargo, your routes, and the risks involved. Here are the factors that genuinely shape a good decision:

• Nature of Cargo- Start with what you are shipping. Fragile, high-value, or perishable items need wider protection, such as an All Risk Policy. Bulk or low-value goods may only need a Named Perils cover. Every example of marine insurance should reflect how delicate or valuable the cargo is.

• Mode of Transport- If your shipment moves across sea, rail, and road, you need seamless protection throughout. A marine specific policy like a Warehouse-to-Warehouse cover keeps the goods insured from start to finish, no matter how many handovers happen.

• Trade Route and Risk Profile- Some routes come with added danger-** piracy zones, rough seas, or politically unstable regions. These require extra protection, such as War Risk Insurance, when selecting the right types of marine policy.

• Incoterms Implications- Your contract decides who is responsible for arranging insurance. Whether you are the buyer or seller, choose from the appropriate kinds of marine insurance policy based on your share of responsibility.

• Legal Obligations- Certain contracts or countries demand minimum levels of insurance. In these cases, ensuring your policy covers all types of risk of a vessel or cargo becomes essential for compliance.

• Company Risk Appetite- Some businesses prefer maximum protection because they cannot afford disruptions. Others may be comfortable with limited cover. Your marine policy should always match your comfort level and financial tolerance.

The cost of marine insurance is never one-size-fits-all. Several practical factors influence how much you end up paying for your cover.

• Policy Type- A basic marine insurance policy that covers specific risks will cost less than one that offers broader protection. Naturally, the more comprehensive the policy, the higher the premium.

• Cargo Value- The value of the goods being shipped plays a big role. Higher value means higher risk for the insurer, and a higher price for your cargo insurance.

• Vessel Age and Class- If the ship carrying your goods is old or not class-approved, insurers may charge more. Well-maintained, modern vessels usually attract lower premiums.

• Route Risk- Shipping through risky zones, like areas prone to piracy or storms, can drive up your marine and cargo insurance costs.

• Packaging Quality- Proper packaging lowers the chance of damage. If your cargo is poorly packed, expect to pay more.

• Claim History- Insurers do look at your past. Too many claims? Your premium might go up. A clean history helps you get better rates.

Choosing the right marine insurance policy is not just about ticking compliance boxes; it is about protecting your cargo, your vessel, and your business. From liability to transit coverage, understanding the right policy makes a world of difference across global shipping and logistics.

At TATA AIG, we understand that no two shipments are alike. That is why we offer a range of marine and cargo insurance solutions tailored to your business type, cargo value, and risk profile. Whether you are a small exporter or a large shipping firm, our policies provide flexible coverage backed by a wide global network.

We offer everything from basic marine insurance for one-time shipments to comprehensive covers that protect your vessels, liabilities, and freight earnings. Each marine cargo insurance policy is designed with your operational needs in mind, so you are covered no matter where your trade takes you.

Ready to protect your next shipment? Visit TATA AIG’s website and buy your marine insurance online with ease.