Marine Cargo Insurance

Marine cargo insurance is one of the oldest forms of commercial insurance and remains critical for India's trade-dependent economy. The policy covers physical loss or damage to goods during transit, including loading, unloading, and intermediate storage. Indian marine cargo policies are based on the Institute Cargo Clauses (ICC) developed by the Institute of London Underwriters, which are adopted by Indian insurers with IRDAI approval.

Three standard levels of cover exist: ICC (A) provides all-risks coverage, ICC (B) covers named perils including fire, explosion, vessel stranding, and discharge at a port of distress, and ICC (C) provides the most limited cover for major casualties only. Most Indian importers and exporters opt for ICC (A) to ensure comprehensive protection.

Under the Marine Insurance Act, 1963, the insured must have an insurable interest in the cargo at the time of loss. The policy can be issued as a specific policy for a single shipment or as an open cover or annual policy for businesses with regular consignments. Open covers are popular among Indian exporters in textiles, pharmaceuticals, and chemicals who ship multiple consignments monthly.

The sum insured is typically set at CIF (Cost, Insurance, and Freight) value plus 10% to cover incidental expenses and expected profit. For domestic transit, the value is usually the invoice value plus freight and a margin. Indian businesses must file claims promptly and obtain a survey report from an IRDAI-licensed surveyor within the prescribed timeframe. The Customs Act, 1962 and Foreign Trade Policy also interact with marine cargo insurance, particularly for import-export documentation and duty drawback claims.