Understanding Your Marine Cargo Insurance Plan

Wednesday, February 2, 2011

Have you ever wondered what happens if your goods in transit through cargo holds of large ships which carry containers, get damaged while handling? Well, you do not pay a cent for recovering the cost of the damaged goods because your marine cargo insurance does it for you.

Marine cargo insurance is an important concept to understand especially if you frequently transit your goods through carrier vessels. Such insurance is usually provided by all those companies that transport large quantities of cargo. Since there are always chances that the goods being carried could get damaged because of the weather conditions or poor handling by the people involved in the transit, it is always better to opt for insurance.

Due to the increased volumes of the goods that are always kept in transit throughout the world, marine cargo insurance has become a highly specialized as well as a regulated industry. You may not get a government approved insurance plan for your boat, but be certain that you will get the most excellent options for your marine cargo insurance.

There are basically three kinds of marine cargo insurance plans. The first and the most common of all insurance is the open cover insurance. This insurance is drawn to cover a number of consignments that are being shipped. This kind of policy can be for a specified amount and lapses when the amount of insurance covered is claimed, or can provide an open cover for a specific period of time. People who have large volumes of goods in transit usually prefer this kind of insurance plan.

The second type of marine cargo insurance is the specific voyage policy. This is not a usual norm in this insurance sector. However, this policy is usually used when you want to make a one time or a specific insurance policy for a particular consignment.

The third kind of insurance is the contingency insurance which is taken on consignments only as a contingency plan in an event that the buyer has not already taken an insurance policy on the consignment and may later refuse to claim any damaged goods. In such a case, the exporter may turn to the court of law or use the contingent insurance to cover any losses.

There are many freight forwarders and specialized marine cargo insurance companies that offer such insurance plans. Some banks may also offer such insurances to those who want to protect their consignments.