With the increase in intercontinental trade, it is unwise and makes no business sense to opt out of bringing in goods from another continent where they are far cheaper than in your locality. This, after all, guarantees a healthy profit margin. Marine transport is currently the leading choice for hauling bulky cargo across continents. Though this is typically a very safe means of transport, several things can go wrong and affect your entire shipment and consequently, the profits you stand to make.
Freight demurrage and defense insurance is one of the key forms of insurance all marine charterers and ship owners should get. This is a discretionary insurance category that will cover your assets and interests and help you recover compensation in the event of any form of loss. Moreover, it covers your legal costs for defending you against any legal claims brought against you by different parties. This form of marine insurance and others might seem inconsequential and an unnecessary expense against issues you can cover with your standard business and personal insurance covers. The following characteristics distinguish marine insurance from other forms of insurance.
It Is Available At ‘Market Value’ And ‘Agreed Value.’
When buying marine insurance, you can opt to insure the vessel for its market value. The value of your vessel will depreciate over time. You might, therefore, be compensated for less than its worth when taking the policy under market value should anything happen to it.
With the agreed value, you and the insurer agree on an amount upfront. Should anything happen to your vessel afterwards, you will be compensated as per this agreed value that will not factor in depreciation.
You Can Assign It
Unless explicitly prohibited before or after your loss, you can assign your marine insurance policy. In this instance, however, you only transfer your insurable interest in the consignment and cannot transfer your entire interest in the insurance policy. Moreover, you cannot transfer your rights in the insurance policy unless you explicitly mention this during your transfer.
It Is Offered As an Unvalued Product
An unvalued insurance policy does not mention the price of the item or cargo to be insured. The policy leaves this sum to be calculated according to agreed-upon methods during the buying of the policy. You and the insurer will decide on the method of calculation and explicitly include it in your policy.
Your Policy Comes With a Warranty
The warranty of your marine insurance policy is a significant agreement between you and the insurance company. In this instance, it means the voyage will be conducted properly. The warranty also guarantees that all conditions, content or objects attached to your marine insurance policy are legal.
The above elements of a marine insurance policy make it virtually impossible to replace with a regular insurance policy. While several insurers have come up over time, they will not all be appropriate for sea transportation. The ideal choice to give you peace of mind when investing in marine insurance is an insurer dedicated to this insurance field. With this alternative, you are guaranteed a customized product that will suit the issues you are exposed to in marine transportation.