Marine Insurance for Small Businesses: What to Consider

Buying marine insurance is essential if you work in import-export or commodity transit. Whether it is a giant company or a small and medium enterprise, investing in the right transit insurance is cardinal.

Marine insurance is a type of transit insurance that financially protects your commodity transport from unforeseen circumstances and sea perils. In this blog, we discuss what a small business should consider while choosing a marine insurance policy.

Types of Marine Business Insurance Policies to Choose From

• Marine Cargo Insurance

Marine cargo insurance offers financial aid when cargo is lost or damaged due to theft, accidents, natural disasters or other reasons. The policy is cargo-specific and does not include other marine assets related to transport.

• Import Insurance

As the name suggests, your import insurance will offer financial coverage against any mishap occurring during the transit of goods coming inwards. This means the policy will cover goods being transported from another country to your country. 

• Export Insurance

Export policy works similarly to import insurance but the other way around. The export insurance policy will protect your financial investment in the goods being transported from your country to another country.

• Inland Marine Insurance

Inland marine insurance offers coverage for goods being transported within the country, whether by land, air or inland waterway. The policy protects your cargo from multiple risks, such as theft, accidental damage and loss due to natural calamities.

• Freight Insurance

Freight insurance provisions financial assistance and other benefits to safeguard the freight charges paid by you, subject to declaration under the policy. The policy covers the loss of freight charges due to issues related to cargo like loss, damage or no delivery.

All of the above policies are categorised into two different plans: open policy and specific policy. The open policy offers coverage for a definite tenure up to a certain amount. The specific policy offers coverage for a specific shipment project.

Factors to Consider Before Buying Marine Business Insurance for Small Businesses

• Business Coverage Needs

Since your business needs and specific requirements lay the ground for the type of marine insurance you need, you must carefully assess these factors. Different businesses perform varied transit activities based on which you need to choose the type and category of policy.

For instance, if you deal with exporting commodities all year long, you must invest in an open export insurance policy. If the export is a one-time project, you can opt for a specific export insurance policy.

• Coverage Limits

You get a complete idea of the coverage your enterprise will require for your marine insurance. Ensure that you thoroughly analyse your cargo, hull, freight or any other insured asset to obtain the necessary cover limit.

Understand that choosing a policy with insufficient coverage will lead to substantial out-of-pocket expenses in the event of loss or damage. Excess coverage will lead to higher premium amounts. Hence, adequate is the only right option.

• Risk Assessment

Whether you cover the cargo or vessel or both, you need to understand the risks associated with all of these marine components. This is an important consideration while buying marine business insurance for your SME.

• Deductibles and Copayments

Always consider utilising the power of deductibles. Deductibles refer to the percentage or amount of money you will pay at the time of claim settlement. With voluntary deductibles, you can reduce your premium amount significantly. Efficient financial planning and management enable you to make the most out of this feature.

• Easy Claim Settlement

If you buy your marine insurance from an inattentive and unreliable insurer, chances are that the claim settlement process will become tedious for you. If you do not want to regret filing a claim even for the obvious losses, buy your policy from a policy provider who offers an easy-to-navigate claim settlement procedure.

Choose a reputable and reliable insurer, like TATA AIG, which offers online filing and great customer service.

Ending Note

Finding the perfect marine business insurance for your SME is vital because it lays the foundation for fortified financial health. It must include the right amount of sum insured, adequate coverage, inclusions, benefits, deductibles, affordable premiums and fulfilment of specific needs.

With all these components, you have a comprehensive policy that will help mitigate severe risks.