Marine Insurance Policy
International business carries with it significant risks. The importing and exporting
of goods can expose you to massive financial losses should your international shipments
be damaged or destroyed in transit.
HDFC ERGO’s Marine Cargo Insurance not only provides the best protection for
your cargo, but also understands the importance of swift response and efficient
service in handling your claims.
Catering to both importers’ and exporters’ needs, the coverage is comprehensive
and flexible with international shipments protected from the time the goods leave
the seller’s warehouse until they reach the Buyer’s warehouse.
The party usually responsible for insuring the goods is determined by the sales
contract. To help you familiarise yourself with the Buyer’s and seller’s
responsibilities, HDFC ERGO can extend its experience in respect of the most common
sales contracts, i.e. ex-Works, Free on Board(FOB), Cost and Freight (CFR) and Cost
Insurance and Freight (CIF).
The Marine Cargo Insurance offers four types of covers:
- Institute Cargo Clause (C): Named Peril basis.
This is the most restricted clause and covers only: loss or damage reasonably attributable
- Fire or explosion
- Vessel or craft being stranded grounded sunk or capsized
- Overturning or derailment of land conveyance
- Collision or contact of vessel craft or conveyance with any external object other
- discharge of cargo at a port of distress and loss or damage caused by – General
Average Sacrifice / Jettison
- Institute Cargo Clause (B): Named Peril basis.
This cover is similar to ‘C’ Clause, but in addition covers:
- Earthquake, volcanic eruption or lightning
- Washing Overboard
- Entry of sea, lake or river water into the vessel, craft, hold, conveyance, container,
liftvan or place of storage
- Total loss of any package lost overdoard or dropped whilst loading onto, or unloading
from, vessel or craft
- Institute Cargo Clause (A): The widest form of cover under Marine Cargo Insurance
in so far as it relates to the perils covered. ICC (A) is an unnamed perils clause.
- Institute Cargo Clause (Air).
- Various clauses can be added on depending upon the nature of the
goods being carried. The Institute Cargo Clauses comprise a range of covers from
the most comprehensive ones such as (A) Clauses to the basic minimum protection
available termed (C) Clauses.
- Additional cover can also be provided for the following:
- Loading and Unloading
- Customs duty
- Removal of debris
- Policies are customisadle to your needs, with a specific policy
to cover each single consignment. There are also other various types of policies:
- Open Policy - This policy covers all the marine sendings of a client
in a 12 month policy period where the voyage involved is within a country (domestic/inland)
- Open Cover – This policy covers all the marine sendings of
a client in a 12 month policy period where the voyage involved is import or export
- Specific Voyage or Time Policy - These policies are issued to firms
that require coverage for a specific voyage. It is suitable for those firms who
seldom require marine cargo policies in the course of their trade.
These policies are issued on a "from and to" basis and the cover commences
once the goods leave the place of origin named in the policy and terminates on delivery
at the place of destination.
Sometimes these policies are also issued in terms of duration of the voyage, in
which case the cover commences on the date and time specified for the same in the
policy. Inland specific transit will exclube terrorism.
- Duty Insurance Policy - Customs duties form a major part of the
cost of imported goods. Once the goods land at the port of destination custom, duty
In case the goods are damaged during the transit from the port to the importer's
warehouse, the CIF value is not sufficient to represent the actual value of the
goods since the custom duties should have already been paid.
This additional element of cost can be covered by a duty Insurance Policy. Claims
under a duty policy are only payable if the claim is otherwise admissidle in the
marine cargo policy covering the goods.
- Seller’s Contingency Policy - In almost all export transactions
where credit is allowed by the seller to the Buyer and the goods are not exported
on CIF basis, responsibility for the goods passes to the Buyer when the goods are
loabed on to the overseas vessel. but ownership does not change until the Buyer
accepts the goods and relative documents.
Thus, if the seller is allowing credit to the Buyer and has shipped goods on FOd
terms, where the responsibility for loss or damage to the goods is passed to the
Buyer when the goods are loabed on to the overseas vessel, the seller has no control
over the conditions of the insurance cover arranged by the Buyer.
In the event of loss of or damage to the goods in transit from a peril insured against
and the Buyer refusing to pay for such loss or damage, the seller could stand to
lose financially. Seller's Interest or Contingency Interest cover could help
to prevent this.
The cover is normally arranged as an extension of FOd cover. The seller's interest
cover in effect retrospectively reinstates cover, as per Institute Cargo Clauses
as provided for in the policy and allows the seller to be protected in an area where
he has no control over the insurance arrangement.
- E-marine – HDFC ERGO has the facility which provides any
time marine certificate issuance facility to clients/ intermediary. This facility
is provided free of cost and can be availed by any one who Buys open marine cover
or policy from HDFC ERGO.
- This is an agreed value policy. Normally, the insurance is taken for CIF +10%.
- The insurance rate depends on a variety of factors such as the nature of the cargo,
scope of cover, packing, mode of conveyance, distance and past claims experience.
- This policy does not cover loss or damage due to willful misconduct, ordinary leakage,
improper packing, delay, inherent vice, war, strikes, riot and civil commotion.