Do’s and don’ts of ship insurance

If your business carries goods domestically or abroad, whether it’s inland or across the ocean, you need to realize that the moment those goods go out the door, they change hands many, many times, and you know not what could happen.

To protect your goods and your business, you must have marine insurance. But how do you choose the right one? Here are a few do’s and don’ts:


1. Do not confuse marine insurance with boat insurance. Boat insurance protects 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 cargo over water. It also protects cargo carried on dry land, in addition to protecting the ship carrying the cargo.

That’s why there is such a thing as “dry” sea shipping, for cargo over land, and “wet” sea shipping, for cargo carried on real ships.

2. Do not lie on your application form. Also, do not hide any relevant information. There’s a fine line between the two: lying on your form means you’re intentionally entering wrong information. Hiding information means that you were under no obligation to disclose the information, but you know that disclosing it would have adversely affected your policy.

However, if it is discovered that you have lied or concealed relevant information, it would most likely invalidate your policy and negate the purpose for which you took out the insurance in the first place.

3. Don’t break your warranty. In insurance law, a guarantee is of fundamental importance for the performance of the contract. If breached, the non-breaching party may terminate the contract in addition to claiming damages.

A common implicit guarantee in marine insurance is the seaworthiness (or trafficworthiness) of the ship.

Please note that if a warranty is breached, it will not help the insured to recover the warranty; the policy will in any case be declared null and void.

So before taking 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 do…


1. Read the fine print. While the fine print can be tedious 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 hits you on the head, and maybe don’t live to regret it.

The fact is, unless you’re a first-grader just learning to read, you won’t need 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 tells you the details of what you are paying for, what rights you may have that you may not have been informed about, and what terms are not covered by your policy, and what actions will void your policy. . For example, insufficiently packed cargo is usually not covered. Nor are dangerous items such as combustibles, firearms and chemicals. Others may not involve food, wood, and animals. There may also be navigation limits which, if exceeded, will invalidate your policy.

See also  Another article about car insurance

2. Compare policy offers. And don’t just rely on the price.

Perhaps the reason why that policy is so cheap is because it only covers the actual value, which is the value of your insured item at the time it was lost – and this includes depreciation, so you’re probably getting a lot less than what you got. expected.

On the other hand, that other policy may cost more, but it will insure your item for the amount you agreed on on paper (agreed value), so if the item is lost, you’ll be reimbursed the exact amount you expect, giving you the lost item immediately with a brand new one.

What about the causes of damage covered by the policy? Unregistered policies only cover specific types of loss and may not cover force majeure. On the other hand, 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 else you will lose money later.