Marine insurance is the type of insurance that covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination.
Types of marine insurance
There are three types of marine insurance which are;
- Freight insurance,
- Ship or hull insurance, and
- Cargo protection.
Why is it important?
- Marine insurance is very important in facilitating global trade by reducing uncertainty and optimizing the traders’ operations.
- Marine insurance enables businesses to undertake international transactions with assurance, reducing uncertainty taking into consideration the number of factors that can lead to severe casualties.
Disadvantages
- High Cost: premiums for marine insurance can be relatively high, especially if the insured vessels or cargo operate in high-risk areas, or if there’s a history of claims.
- Complex Policies: may include various conditions, exclusions, and deductibles.