"Marine insurance offers financial protection to businesses against the loss or damage of goods in transit, whether shipped by sea, air, road, rail or inland waterways. It covers cargo during various stages of transport, including loading and unloading at ports and movement between destinations."
"For businesses engaged in international and domestic trade, as well as freight forwarders and logistics providers, marine insurance helps mitigate the financial impact of unforeseen events like accidents, theft, natural disasters or delays. It plays a critical role in safeguarding the value of goods throughout their journey."
"At THE PURE POLICY, we offer marine insurance in India with both domestic and global coverage, designed to support businesses of all sizes with flexible, reliable protection across every mode of transport."
Marine insurance is a contract where the insurer agrees to cover financial losses a business may face while transporting goods across sea, air, road, rail or inland waterways. It broadly includes cargo insurance (for goods in transit) and hull insurance (for damage to vessels, machinery or equipment).
The marine insurance meaning also extends beyond just transit routes; it encompasses multimodal transport, tailored policies and legal compliance.
Policies are often aligned with international trade terms like CIF (Cost, Insurance and Freight), FOB (Free on Board), DDP (Delivered Duty Paid) and EXW (Ex Works), which define who bears the risk during different stages of transit. This makes marine insurance vital for risk mitigation and compliance.
In India, marine insurance is governed by the Marine Insurance Act, 1963 and regulated by the Insurance Regulatory and Development Authority of India (IRDAI).
The Marine Insurance Act of 1963 is the primary legislation governing marine insurance contracts in India. It establishes a uniform legal framework for the formation, content and enforcement of marine insurance policies.
The Act defines marine insurance, outlines the rights and duties of insurers and insured parties, and provides guidelines for premium payments, claim settlements, subrogation and assignment of rights. It also details the procedure for resolving disputes.
Key provisions cover losses due to perils of the sea, piracy and other maritime risks. The Act further regulates marine insurers and agents, ensuring transparency and fairness in the marine insurance sector under the oversight of the Insurance Regulatory and Development Authority of India (IRDAI).
The business will buy marine insurance from THE PURE POLICY before shipping their cargo.
Its pricing is determined based on factors like the value of the cargo, level of risk involved and mode of transportation.
The cargo owner or shipper pays the premium to THE PURE POLICY in exchange for marine and cargo insurance coverage during transit
The policy will cover loss or damage to the cargo caused by natural disasters such as storms, lightning and earthquakes, and unintentional man-made risks like fire.
In case of loss or damage, the shipper can file a claim with THE PURE POLICY to be compensated for their loss.
THE PURE POLICY 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.
Marine insurance offers a critical layer of protection for businesses involved in transporting goods across domestic and international borders. Here are the key features of marine insurance:
Marine insurance provides compensation for the loss or damage of goods in transit, whether due to theft, natural calamities, collisions or accidents.
International shipping contracts require insurance under terms like CIF (Cost, Insurance and Freight) or CIP (Carriage and Insurance Paid To). Marine insurance ensures smooth compliance with such agreements.
As per the International Union of Marine Insurance (IUMI), marine insurance is intrinsically linked to global trade growth. It underpins cross-border transactions by reducing financial uncertainty and facilitating smoother logistics.
Choose from all-risks or specific risks, single-transit or annual plans, get specific coverage for war or strike cover and tailor coverage based on cargo type, route and risk level.
Prompt claim settlements and reliable coverage help businesses maintain strong relationships with customers, suppliers, logistics partners and other stakeholders.
Businesses can manage trade risks proactively, reduce capital lock-in and ensure continuity in global and domestic supply chains, further highlighting the importance of marine insurance in supporting long-term business sustainability.
Freight forwarders, exporters, logistics providers and stakeholders with insured operations offer greater trust and reliability and thus improve their standing in the marketplace.
Marine cargo insurance is not legally mandatory in India for all cargo movements. However, it is strongly recommended, especially for businesses engaged in international trade or high-value shipments. Many exporters, importers and logistics partners opt for marine cargo insurance to protect against loss, damage or delays during transit by sea, air, road or rail.
Moreover, under certain international contracts like CIF (Cost, Insurance and Freight) or CIP (Carriage and Insurance Paid To), and sometimes DDP (Delivered Duty Paid)
or DAP (Delivered at Place), the seller is contractually obligated to provide insurance. This makes marine insurance a business necessity, even if not a legal one.
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.
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.
Automatic insurance protection
Marine Loss Control Engineering
Assistance in identifying potential hazards
Cargo protection for specific voyage risks
Multinational Cargo Transport Program
Dedicated Marine Cargo Underwriting Service
These are some of the exclusions under the policy:
Under the Exhibition/Demonstration Risks Extension clause, the exclusions are:
Marine insurance is commonly used to protect a wide range of high-value and high-volume goods in transit. These commodities are often exposed to transit risks and require tailored marine insurance coverage for smooth and secure delivery. Some of the top insured commodities include:
Covers cargo transported across international borders. It is ideal for exporters, importers and global logistics providers.
Provides coverage for goods transported within India via sea, road, rail, air or inland waterways.
This kind of marine insurance is ideal for businesses with frequent shipments. It covers multiple consignments over a fixed period, and the business can declare shipment values post-dispatch. Premiums are calculated on declared values.
This type of marine policy suits businesses with occasional shipments. It covers only one declared consignment at a time, and details must be shared with the insurer before transit. Premiums are calculated individually per shipment.
Both types of policies cover risks such as loss or damage to the cargo, loss of freight, damage to the ship, and third-party liabilities. The policy can be extended to cover additional risks per the policy terms and conditions.
Applies to goods transported within India by road or rail. It will not cover losses due to war, strikes, riots, or wilful misconduct.
ITC A offers comprehensive coverage against all risks except for specific exclusions.
IITC B provides limited coverage for damage caused by fire, collision, derailment, overturning, or other accidental events.
Applies to goods transported internationally by sea or air. It will not cover losses due to war, strikes, riots, or wilful misconduct.
ICC A offers the broadest coverage for overseas shipments, protecting against all risks unless specifically excluded.
ICC B offers restricted cover and applies only to losses from incidents like fire, explosion, sinking or stranding.
In both types of coverage, there are specific exclusions that are not covered by the policy, such as losses due to war, strikes, riots, or wilful misconduct.
For international marine cargo insurance, coverage is categorised under Institute Cargo Clauses (A, B and C), each offering a different level of protection:
ICC (A), known as All Risks cover, offers the broadest protection, covering all accidental losses or damages unless specifically excluded.
ICC (B) offers medium-level coverage, including everything in ICC (C) plus losses due to earthquakes, volcanic eruptions, lightning, water ingress and packages lost overboard.
ICC (C) provides basic protection, covering losses caused by fire, explosion, vessel grounding or capsizing, land vehicle overturning, collisions, discharge at port of distress, jettison and general average sacrifice.
These marine insurance clauses help businesses select appropriate coverage based on the nature, value and transit risks of their cargo. The broader the clause (A > B > C), the higher the premium and the greater the risk protection.
Please Note: Requirements may vary based on the nature of cargo and business operations. It’s advisable to consult a THE PURE POLICY representative for personalised guidance before you buy marine insurance.
The premium for marine cargo insurance is calculated based on a percentage of the total insured value, which includes the cost of goods, freight charges and applicable duties or taxes. This base rate is then adjusted depending on:
Insurers may also consider historical claim data and risk mitigation measures before finalising the premium. THE PURE POLICY offers easy online marine insurance calculation. Just enter your cargo and transit details to get started.
Type of insurance cover (All Risk vs Specific Risk)
Nature and value of goods
Mode and route of transport.
Type and age of the vessel (for water transport)
Trading limits (maximum amount of coverage provided for the goods)
Add-on covers opted for
The assured and their agents should do what they can to prevent or lessen any damage or loss to their goods. They should also make sure to use their legal rights against anyone responsible for any problems.
Given below are the documents needed to file a claim under marine insurance:
Original policy or marine insurance certificate
Original Bill of Lading and/or another contract of carriage.
Original copy of shipping invoices, with the packing list and/or weighment notes.
Landing remarks/account and weighment notes at the final destination
The survey report and other documentary evidence, if available, show the extent of the loss or damage.
Correspondence exchanged with the carriers and other parties regarding their liability for the loss or damage.
To enable claims to be dealt with promptly, the assured or their agents are advised to submit all the supporting documents without delay, including the items mentioned above.