Marine insurance coverage by Red Cover Life Planning is provided to ships, boats and the cargo that is carried in them.
Through marine insurance coverage, ship owners and transporters can be sure of claiming damages especially considering the mode of transportation used.
The need for marine insurance coverage is highlighted by the fact that you have very little control over the safety of the cargo once it is handed over to the carrier for shipment.
Even if the carrier can be held liable for the safety of the goods, rates of compensation may cover only a portion of the value of the goods.
When it comes to ships, the stakes are higher as all variables are involved with the task, i.e. risk of losing valuable cargo or expansive ships, the danger of harm to nature due to oil pollution and risk of losing precious lives of seafarers due to accidents.
Reasons to have marine insurance coverage
Marine insurance has become most important insurance in the field of insurance. The importance of marine insurance coverage is described below in detail:
For the individual
- A person has to import goods from another country which is located on the other side of the sea for his business. While carrying goods from another side of sea businessman may have to face some damages on the goods because of the sinking of the ship into the water. So, the businessman has to experience economic loss.
- By the result of losing, the person may be discouraged to engage in business. But, when one insures his/ her property in marine insurance does not have to face the economic problem because marine insurance provides compensation to the insured against the loss of property.
For the government
- International trade has been increased due to the marine insurance. As international trade increases government also can receive economic profit.
- Government increases revenue by including extra income tax. So marine insurance is important for the government also.
- Freight insurance is also included under the marine insurance. Freight refers to the revenue that a cargo ship earns or the money which is paid to the shipowner for transportation of goods from one part to another.
- If the businessman does not pay the freight of his goods to the shipowner, the shipowner may have to experience economic loss. If such types of loss occur insurance company indemnifies the shipowner to marine insurance. So, marine insurance is very important for the freight.
- An expensive ship may be destroyed due to different types of risks on the marine venture.
- Shipowner may have to experience with larger amounts of loss due to the destruction of the ship.
- Marine insurance provides compensation of loss to the shipowner.
- So, marine insurance is important insurance for shipowner.
For cargo owner
- A businessman wants to be secured for his goods. Especially countries which are located on the other side of the sea, the businessman may have to use marine venture.
- Marine insurance coverage can keep them away from worry and fear or all responsibility of cargo owner is transferred to the hand of an insurance company that provides compensation to the cargo owner if a loss occurs.
The different types of marine insurance coverage
- Port Risk policy is a marine insurance coverage that guarantees the safety of the ship while it is stationed in a port.
- Liability Insurance is the type of marine insurance where compensation is sought to be provided on any liability that may occur such as the ship crashing or colliding with another vessel as well as other induced attacks.
- Freight Insurance offers and provides protection to merchant vessel corporations that are at risk of losing money in the form of freight. This would occur when the cargo is lost following an accident and solves the problem of companies losing money as a result of unprecedented events and accidents occurring.
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