Maritime Insurance

Maritime insurance, also known as marine insurance, is a financial protection mechanism that safeguards against potential losses or damages to vessels, cargo, terminals, and other maritime-related assets.

This specialized form of insurance provides coverage for risks associated with sea transport, offering compensation in the event of accidents, natural disasters, theft, or other perils that may occur during shipping.

Types of Marine Insurance

Marine insurance encompasses various specialized forms tailored to mitigate risks associated with sea transport:

1. Hull Insurance: Safeguards vessels against physical damage and machinery issues caused by collisions or accidents.
2. Cargo Insurance: Protects goods during transit against potential damages, theft, or loss.
3. Freight Insurance: Covers financial losses due to non-delivery of cargo as a result of specified perils.
4. Liability Insurance: Shields against third-party liabilities arising from maritime activities, including bodily injury, property damage, and environmental impact.
5. Protection and Indemnity (P&I) Insurance: Offers comprehensive coverage for shipowners, operators, and charterers, addressing liability, third-party property damage, and pollution risks.
6. Demurrage Insurance: Protects against financial losses due to delays in loading or unloading.
7. War Risk Insurance: Covers damages resulting from war-related perils, civil unrest, or terrorism.
8. Kidnap and Ransom (K&R) Insurance: Addresses piracy and kidnapping risks, covering ransom payments and associated expenses.

While global marine insurance isn't mandatory for shipping operations, two incoterms: Cost, Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP)—require the seller to provide marine insurance for the buyer.