Do's and Don'ts for Purchasing Marine Cargo Insurance in India

Do’s (Things You Must Do)

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1. Assess the Type of Cover Needed

Marine cargo insurance isn’t “one-size-fits-all.”

• For domestic movement, opt for Inland Transit Policies covering road/rail/air/river transport.

• For imports and exports, go for Specific Voyage Policies or Open Covers if you ship frequently.

• Select the right Institute Cargo Clauses (A, B, or C):
  • Clause A: All-risk cover (broadest protection).

  • Clause B: Named perils like fire, earthquake, and lightning.

  • Clause C: Basic protection against major perils like collision or capsizing.

Tip: For fragile or high-value goods, Clause A is advisable despite the higher premium.

2. Declare Accurate Cargo Details

Always provide complete and truthful details of:

• Nature of goods (chemicals, machinery, perishables, etc.).

• Packaging (cartons, containers, bulk, drums).

• Mode of transport (air, sea, rail, road).

• Transit route (direct or via high-risk areas).

Why? Mis-declaration can result in claim repudiation. For example, not disclosing that goods are temperature-sensitive may void coverage if spoilage occurs.

3. Opt for Adequate Sum Insured

The sum insured should reflect the actual total value of goods in transit, not just the invoice cost. Insurers recommend:

• Invoice value + freight charges + customs duty + 10% margin (to cover incidental costs like survey fees, reshipment, etc.).

Why? If you insure for less, the Average Clause applies, and you'll receive only proportionate claim amounts.

4. Check Policy Wording Carefully

Study inclusions, exclusions, and terms. Look for:

• Included risks: Fire, theft, piracy, collision, natural calamities.