Marine Insurance Exclusions: What Your Policy Might Not Cover

Marine insurance is essential for safeguarding goods, vessels, and logistics operations during transit by sea. While many assume a marine policy offers blanket protection, there are critical marine insurance exclusions that shippers and consignees must understand. Knowing what your policy does not cover is just as important as knowing what it does.

This blog breaks down common marine insurance exclusions, real-world implications, and tips to avoid coverage gaps when shipping internationally.

What Are Marine Insurance Exclusions?

Marine insurance exclusions are specific risks or scenarios that are not covered under a standard marine insurance policy. These exclusions define the boundaries of the insurer’s liability, protecting the insurer from losses caused by unavoidable, uninsurable, or self-induced risks.

Why Exclusions Matter in Marine Insurance

Importance	Explanation
Prevent Misinterpretation	Exclusions clarify the limitations of the policy.
Manage Risk Properly	Understanding exclusions helps you plan supplementary coverage.
Prevent Claims Denial	Filing claims for excluded risks leads to rejection.

Common Marine Insurance Exclusions

Exclusion Type	Description
War & Strikes	Damages from war, rebellion, or labor strikes are excluded unless a war risk add-on is purchased.
Inherent Vice	Damage due to a natural property of the cargo (e.g., rotting fruits, metal rust) not caused by external factors.
Willful Misconduct	Intentional acts or gross negligence by the insured, such as ignoring known issues.
Delay	Losses caused purely by delivery delays, even if they result in financial damage.
Nuclear Risks	Loss or damage due to radioactive contamination or nuclear events.
Unseaworthiness	Damage caused due to knowingly shipping goods on an unfit vessel.
Improper Packaging	Losses from goods packed improperly by the shipper.

Real-World Scenarios of Exclusions

Scenario	Covered?	Reason
Ship sinks due to cyclone	✅ Yes (if covered under named perils or all-risk)
Delay at customs causes spoilage	❌ No	Delay exclusion applies
War breaks out and ship is detained	❌ No	War risks are excluded unless added
Fresh produce rots mid-transit due to natural decay	❌ No	Inherent vice exclusion applies
Crew negligence causes collision	✅ Yes (unless gross negligence or willful misconduct)

Optional Add-Ons to Cover Exclusions

You can extend coverage for some excluded risks through policy endorsements or riders.

Add-On Coverage	Covers
War Risk Insurance	War, rebellion, terrorism
Strike Insurance	Labor strikes, civil unrest
Refrigerated Cargo Cover	Spoilage due to machinery failure
Delay Risk Cover	Financial losses due to shipment delays

Always check with your insurer or broker for what exclusions can be covered with optional add-ons.

2024 Marine Insurance Claims Data Snapshot

Category	Percentage of Rejected Claims
Delay-related	28%
Improper Packaging	22%
Inherent Vice	17%
War/Strike Events	12%
Documentation Errors	9%

(Source: International Union of Marine Insurers)

FAQs

Q1: Can I override marine insurance exclusions with custom terms?
A: In some cases, yes. Insurers may agree to modify exclusions or provide extensions based on the risk and premium adjustments.

Q2: Do exclusions vary across countries?
A: The core exclusions are standard, but some local regulations may affect the scope or enforcement of certain clauses.

Q3: Is theft always covered in marine insurance?
A: Theft is covered under all-risk policies but may be excluded under named perils unless specifically included.

Q4: What if damage is partly due to an excluded and a covered risk?
A: Insurers may evaluate the proximate cause of damage. If the main cause is excluded, the claim may be denied.

How to Minimize the Impact of Exclusions

• Read the policy thoroughly to identify exclusions before purchase.
  
  

• Use certified and approved packaging materials to prevent exclusion-based rejection.
  
  

• Work with experienced logistics partners who follow best practices.
  
  

• Purchase additional cover for risks relevant to your cargo type and route.
  
  

• Maintain a record of cargo conditions at loading and unloading points.
  
  

Comparison Table: Standard vs. Extended Marine Insurance

Risk Type	Standard Policy	With Add-On
War and Terrorism	❌ Not Covered	✅ Covered
Inherent Vice	❌ Not Covered	❌ Still Excluded
Delay Damages	❌ Not Covered	✅ Covered (with delay add-on)
Refrigeration Failure	❌ Not Covered	✅ Covered (refrigerated cargo extension)

Conclusion

A robust marine insurance policy can save your business from major losses, but it’s not foolproof. Understanding marine insurance exclusions empowers you to make informed decisions, add relevant endorsements, and prevent rejected claims. From war risks to spoilage and improper packaging, being aware of these limitations ensures you ship smarter and safer. Always take time to understand marine insurance exclusions before finalizing any policy.