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Marine Cargo Insurance

Just like you need insurance coverage for the various assets and property that you own, marine cargo insurance also called as Transit Insurance is designed to secure losses to the goods and cargo that is transported on ships and modes of water transport.

As with any other type of insurance, goods and products lost during a voyage can become a considerable expense for you and your business. By getting adequate insurance coverage for your marine cargo, you can ensure that your deliverables reach their destination securely and on time.

Keep all your cargo, as well as your ship, safe from unexpected marine losses and damages, and choose from a range of marine insurance policies from Tata AIG!


What is Marine Insurance?

Marine insurance in India is a type of insurance that covers maritime transport risks, including loss or damage to cargo, ships, and other vessels. It is governed by the Marine Insurance Act of 1963 and regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

Marine insurance in India can be broadly classified into cargo insurance and hull insurance. Cargo insurance covers the loss or damage to goods during transit by sea, air, or land. Hull insurance covers the physical damage to the ship or vessel, including machinery, equipment, and other parts.

The coverage provided by marine insurance in India may include perils such as fire, theft, piracy, collision, and weather-related risks like storms, hurricanes, and other natural disasters. The policy may also include additional liability coverage arising from damage to third-party property or injury to crew members. In India, marine insurance policy is primarily provided by general insurance companies, and most offer a range of marine insurance policies to suit the needs of different businesses and individuals. The premium for marine insurance policies in India is usually based on factors such as the value and nature of the cargo or vessel, the type of coverage required, and the level of risk involved.

Marine insurance is an essential requirement for businesses involved in international trade and transportation by sea. It helps to protect businesses from financial losses due to unexpected events that may occur during transit, providing them with peace of mind and financial security.

How Does Marine Cargo Insurance Function?

Marine cargo insurance functions as a means of protection for the cargo owner or shipper against the risks associated with the transportation of goods by sea, air, or land. It provides coverage for physical loss or damage to the cargo during transit from the port of origin to the destination port. Here's how marine cargo insurance functions:


The cargo owner or shipper can purchase marine cargo insurance from the insurance company before shipping the cargo. The policy can be tailored to suit the specific needs of the cargo owner, considering the type of cargo, the mode of transportation, the value of the goods, and the destination.


The policy typically covers loss or damage to the cargo due to various risks, including natural disasters like storms, lightning, and earthquakes, and man-made risks like theft, fire, and piracy. The policy may also cover loss due to improper handling or packaging of the cargo and errors or omissions made by the carrier.


The premium for the policy is determined based on the value of the cargo, the level of risk involved, the mode of transportation, and other factors. The cargo owner or shipper pays the premium to the insurance company.


In case of loss or damage to the cargo during transit, the cargo owner or shipper can file a claim with the insurance company. The claim should be accompanied by proof of loss or damage, such as bills of lading, cargo receipts, or other documents.


The insurance company investigates the claim and determines the compensation due to the cargo owner or shipper. The settlement amount is usually based on the value of the cargo and the extent of the loss or damage. The insurance company pays the settlement amount to the cargo owner or shipper.

Marine cargo insurance in India provides essential protection for cargo owners and shippers against the risks associated with transporting goods by sea, air, or land. By purchasing a marine and cargo insurance policy, cargo owners and shippers can ensure they are financially protected in case of loss or damage to their cargo during transit.

Importance of Marine Insurance

Marine insurance is an essential aspect of the shipping industry and international trade. Here are some key reasons why marine insurance policy is important:

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Protection against loss

Marine insurance protects against potential losses during transit, such as theft, damage, or loss of cargo, vessel, or equipment. These losses can result in significant financial damage to the parties involved, making marine insurance crucial to minimising the financial impact.

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Compliance with legal requirements

Many countries require vessels and shippers to have marine cargo insurance coverage to comply with regulations. For example, in India, it is mandatory for all vessels carrying cargo to have valid marine cargo insurance coverage before embarking on their journey.

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Risk management

The shipping industry faces several risks, including natural disasters, piracy, and accidents. Marine insurance allows shipowners and cargo owners to manage these risks and protect themselves against the financial losses that may result.

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Facilitates international trade

Marine insurance is crucial in facilitating international trade by assuring buyers and sellers that their cargo will be protected during transit. This confidence can lead to increased trade volume and higher profitability.

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Encourages investment

Marine insurance promotes investment in the shipping industry by mitigating the risks associated with owning, operating, and investing in ships. This protection can lead to increased investment in the industry and, in turn, better efficiency and modernisation.

Advantages of Marine Insurance

Marine insurance offers various advantages to individuals and businesses dealing with maritime transportation and shipping. Here are some of the key advantages of marine insurance:

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Protection against financial loss

Marine insurance covers losses or damage to ships, cargo, and other maritime assets, protecting the insured against significant financial loss due to accidents, theft, or other unforeseen events.

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Peace of mind

By having marine insurance, individuals and businesses can enjoy peace of mind knowing that their assets are protected against losses or damage during transportation, which can be especially important for high-value cargo.

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Flexible coverage

Marine insurance policies can be tailored to meet the specific needs of the insured, with options for coverage of risks such as piracy, collision, and general average losses.

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Prompt settlement of claims

In the event of a loss, your insurance provider will have a team of experienced experts who can quickly investigate the claim and work to settle it promptly, minimizing the financial impact on you.

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Compliance with regulations

Many countries require businesses to have marine insurance before they can transport goods, and having such coverage can help ensure compliance with regulations.

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International coverage

Marine insurance can cover losses or damage during transportation across international waters, giving businesses and individual policyholders the confidence to engage in global trade and commerce.


Who Needs Marine Insurance?

Here are some of the people and businesses who may need marine insurance:

  • Ship owners are among the most obvious candidates for marine insurance. They need vessel coverage, including protection against damage, loss, and liability claims.
  • Freight forwarders arrange the transportation of goods and are responsible for ensuring they are delivered safely to their destination. Marine insurance is essential for freight forwarders, as it covers any losses or damages that may occur during transit.
  • Marine insurance is critical if you are a business or individual shipping goods overseas. It can cover damage or loss of cargo during transport, including theft, piracy, or natural disasters.
  • Shipbuilders and repairers need marine insurance to cover them against any risks associated with the construction, repair, or maintenance of ships. This may include damage to vessels while they are in the shipyard or liability claims from third parties.
  • Port authorities and terminal operators are responsible for safely and efficiently handling cargo and vessels in ports. Marine insurance is essential to protect them against any damage, loss, or liability claims arising from their activities.
  • Marine contractors, such as those involved in offshore oil and gas exploration, need marine insurance to protect them against the risks associated with their activities, such as equipment damage, personnel injury, or pollution.
  • Charterers rent ships for a specific period and are responsible for the vessel's operation during that time. Marine insurance is necessary to protect them against any losses or damages that may occur while the vessel is under their control.

The specific type of marine insurance needed will depend on the individual circumstances and risks involved.

Why Should You Buy Marine Insurance?

Here are some reasons why you should consider buying marine insurance:


Liability protection

Marine insurance can also provide coverage for liability claims, including those related to cargo damage, personal injury, or pollution. This type of protection is particularly important for businesses that may be exposed to a high liability risk.


Protection against loss or damage

It can cover the loss or damage of vessels, cargo, or other marine equipment. This coverage can be critical in the case of accidents, natural disasters, or theft.


Peace of mind

A suitable policy can provide peace of mind for businesses and individuals involved in marine activities. Knowing that you have coverage in place can help you focus on your business or other activities without worrying about potential risks and losses.


Competitive advantage

Marine insurance can also give you a competitive advantage in the marketplace. For example, if you are a shipper or freight forwarder, having insurance coverage can help you attract clients looking for a reliable and secure transportation partner.


Legal requirements

In some cases, marine insurance may be required by law. For example, if you operate a commercial vessel, you may be required to carry liability insurance.


Customised coverage

Marine insurance policies can be tailored to meet the specific needs of different businesses and individuals. This means you can choose the coverage level appropriate for your specific risks and activities.

Marine Cargo Insurance Eligibility Criteria

Any company that is involved in the business of moving goods by sea can purchase marine insurance. This includes –

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Import/export merchants

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Buying agents

Marine insurance protects goods in transit by sea and helps to mitigate the financial risks associated with potential loss or damage to the cargo.

Why Should You Buy Tata AIG’s Marine Insurance?

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Global Presence

With AIG’s presence in more than 130 countries, we are truly a global network with local expertise. This local expertise ensures we can guide and issue covers while considering the local regulatory concerns. Our worldwide presence ensures that we are perfectly placed to respond swiftly and effectively in dealing with losses as and when they occur.

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Financial Strength

The combined might of the Tata Group and AIG, coupled with strong reinsurance treaties, ensures that you are in safe hands.

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Specialised products need extra handling. Our Marine Loss Control Engineering (MLCE) can assist you in identifying potential hazards in your supply chain, develop loss prevention guidelines, and help you implement loss control and quality improvement programs.

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Innovative Yet Simple Products

We have something for everyone - whether you are a small exporter, importer, trader, manufacturer, SME, large corporate house, or multi-national corporation. We offer innovative yet simple products such as Sales Turnover Policy, Stock Throughput, or the standard Marine Open Policy.

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Our knowledge and expertise allow us to customise policies to suit your needs.

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We are the only company with a dedicated marine cargo underwriters team.

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Tech Advantage

We are the pioneers of the online issuance of marine certificates in India. Our E-marine is a unique and simple tool. Backed by a dedicated helpdesk, Emarine makes 24x7 insurance actually possible.