If your business involves shipping goods domestically or internationally, whether inland or across the ocean, you need to understand that the moment those goods leave the door، they change hands many, many times, and you never know what might happen.
To protect your goods and your business، you need marine insurance. But how to choose the right one? Here are some dos and don’ts:
1. Do not confuse marine insurance with ship insurance. Vessel insurance protects water vessels and their passengers. It’s like car insurance, except the car floats on water.
Marine insurance is a completely different banana. Despite its name, it is not limited to protecting water cargo. It also protects cargo transported on dry land, in addition to protecting the vessel carrying the cargo.
This is why there is such a thing as “dry” shipping, for cargo carried on land, as well as “wet” shipping, for cargo shipped via actual ships.
2. Don’t lie on your application form. Don’t hide relevant information either. There’s a fine line between the two: lying on your form means you’re intentionally putting in wrong information. Withholding information means that it was not mandatory for you to disclose the information، but you know that disclosing it would have affected your policy in an adverse manner.
Either way، if you’re found to have lied or withheld relevant information, it will most likely void your policy, defeating the purpose for which you took out the insurance in the first place.
3. Don’t break your warranty. In insurance law, the guarantee is essential for the execution of the contract. If breached, the non-breaching party may، in addition to claiming damages, terminate the contract.
A common implied warranty in marine insurance is the seaworthiness (or seaworthiness) of the vessel.
Note that if a warranty is breached, this will not help the insured to remedy the warranty; the policy will be void regardless.
So before you take out a policy, make sure you are aware of all the warranties included and make sure you don’t breach any of them. Which brings us to our first task…
1. Read the fine print. While the fine print can be tiresome to read, we all know—some through painful experience—ignoring it is like parking under a construction site: It’s only a matter of time before something hard and heavy hit you in the head, and you may not live to regret it.
The fact is, unless you’re a first grader just learning to read, it won’t take you five minutes to read the details of the contract you’re entering into. (Never mind if it feels like an hour—it really isn’t.)
The fine print will tell you the details of what you are paying for, what rights you may have that you may not be told about, and what conditions are not covered by your policy and what actions will invalidate your policy . For example, inadequately packed cargo is usually not covered. Neither are dangerous items such as fuels, firearms and chemicals. Others may not cover food, timber and animals. There may also be navigation limits that, if exceeded, will void your policy.
2. Compare policy offers. And don’t just rely on price.
Perhaps the reason that policy is so cheap is because it only covers present value, which is the value of your insured item at the time it was lost – and that includes depreciation, so you’ll probably end up getting a lot less than what you you are expected
On the other hand, that other policy may cost more, but it insures your item for the amount you’ve agreed to (agreed value), on paper, so when the item is lost, you’re compensated for the exact amount you expect . , which will allow you to immediately replace the lost item with a new one.
What about the causes of loss covered by the policy? Unclaimed policies cover only specific types of losses and may not cover acts of God. Then again, maybe they do.
Read the fine print to know exactly what you’re paying for. Just because it’s the cheapest marine insurance policy doesn’t mean it’s the best. And if you are in business, you should know that you should only invest in the best, or suffer losses later.