How Marine Insurance Works in Logistics

 How Marine Insurance Works in Logistics

Understanding how marine insurance works in logistics is essential for managing risk in the global supply chain. Marine insurance provides financial protection for goods transported over water, covering loss or damage due to perils of the sea and related hazards.

What is Marine Insurance in Logistics?

Marine insurance in logistics refers to a coverage policy that protects cargo, vessels, and related interests during maritime transportation. It is a contractual agreement that reimburses the insured in case of loss or damage.

Types of Marine Insurance in Logistics

Type of Insurance

What It Covers

Cargo Insurance

Damage or loss of goods during transit

Hull Insurance

Damage to the ship or vessel

Freight Insurance

Loss of freight revenue due to cargo issues

Liability Insurance

Legal liabilities for third-party damage or injury

Process: How Marine Insurance Works in Logistics

  1. Risk Assessment: Evaluate cargo, route, and conditions.

  2. Policy Issuance: Choose coverage type and sign contract.

  3. Premium Payment: Based on risk profile.

  4. Transit Monitoring: Real-time tracking.

  5. Claims Filing: In case of damage or loss.

  6. Claim Settlement: Investigation and reimbursement.

Importance in Logistics

  • Reduces financial exposure.

  • Enhances trust in cross-border trade.

  • Ensures supply chain continuity.

  • Complies with international trade regulations.

Key Data Points

  • Marine cargo insurance market expected to reach $33.5 billion by 2026.

  • Over 90% of global trade is carried by sea, increasing demand for marine insurance.

(Reference: https://unctad.org)

FAQs

Q1: Is marine insurance mandatory for logistics companies? A1: While not legally required, it is strongly recommended and often contractually obligated.

Q2: How are marine insurance premiums calculated? A2: Based on cargo value, risk assessment, shipping route, and vessel age.

Q3: What documents are needed to file a marine insurance claim? A3: Bill of lading, insurance policy, survey report, and damage photos.

Conclusion

Understanding how marine insurance works in logistics is key for risk mitigation and uninterrupted trade operations. Logistics players must prioritize insurance to secure cargo value and maintain operational stability. Always review how marine insurance works in logistics to make informed choices.

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