Marine Insurance Policy in India – Coverage, Types & Benefits (2025 Guide)

Marine trade has been the backbone of India’s import–export industry for decades. Every day, goods worth thousands of crores move across oceans, rivers, and roads as part of the marine transit ecosystem. With such large-scale movement of cargo comes the risk of loss, damage, theft, and unforeseen maritime accidents. This is where a Marine Insurance Policy becomes not just important but essential for businesses, exporters, importers, transporters, and logistics companies.

In this complete 2025 guide, we explain what marine insurance is, how it works, its types, coverage, benefits, and why every business involved in cargo movement should invest in it.

What Is Marine Insurance?

A Marine Insurance Policy protects goods, vessels, and cargo from risks and damages occurring during transit—whether by sea, air, rail, road, or inland waterways. It also provides coverage for liabilities arising from unexpected events such as accidents, piracy, natural calamities, and cargo handling issues.

The primary purpose of marine insurance is to safeguard financial losses that businesses may face during the transportation of goods. In India, marine insurance is governed by the Marine Insurance Act, 1963, and regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

Why Is Marine Insurance Important in India?

India is one of the fastest-growing trading nations, and a significant portion of international trade depends on marine routes. With increasing volumes of cargo, the risk of loss or damage is also rising due to:

• Extreme weather events
• Ship collisions
• Fire or explosion
• Theft, pilferage, or piracy
• Container mishandling
• Natural disasters
• Operational delays

A single event can lead to heavy financial losses. Marine insurance helps businesses stay financially protected, maintain supply chain continuity, and ensure smooth trading operations.

Who Should Buy Marine Insurance?

Marine insurance is ideal for anyone involved in the movement of goods. This includes:

• Importers and exporters
• Manufacturers
• Traders and wholesalers
• Transporters
• Logistics companies
• Shipping companies
• Freight forwarders
• E-commerce businesses
• Small business owners sending goods frequently

If your business involves shipping goods from one location to another, a marine insurance policy is essential.

Types of Marine Insurance Policies in India

Marine insurance can be broadly categorised into Hull Insurance and Cargo Insurance, with several specific policies under each category.

1. Marine Cargo Insurance

This is the most common type of marine insurance. It covers loss or damage to goods during transit by air, sea, rail, road, or courier.

Types of Cargo Insurance:

a) Marine Specific Voyage Policy

This policy is valid for a specific journey from one location to another. Ideal for exporters who ship goods occasionally.

b) Marine Open Policy

Designed for businesses involved in regular shipments. It covers all shipments within a specific period (usually one year).

c) Marine Inland Transit Policy

Covers the movement of cargo within India through rail, road, or inland waterways.

d) Marine Export & Import Policy

Covers international shipments (export or import) by sea or air.

e) Marine Sales Turnover Policy (STOP)

Covers the entire turnover of a company, including multiple sales, purchases, and stock movements.

2. Marine Hull Insurance

Hull insurance covers the vessel or ship itself, including machinery, tools, and equipment.

It includes:

• Hull & Machinery (H&M) Insurance
• Increased Value (IV) Insurance
• Collision Liability (Running Down Clause)
• Protection & Indemnity (P&I) Cover

This insurance is ideal for ship owners, fishing boat operators, commercial vessel owners, and marine contractors.

Marine Insurance Coverage: What’s Included?

A standard marine insurance policy in India offers protection from a wide variety of risks:

·      Damage to Goods

Covers damage due to storm, rain, accident, seawater exposure, and rough handling.

·      Theft or Pilferage

Compensates for partial or complete theft during transit or storage.

·      Fire or Explosion

Protects goods and carriers from fire-related damages.

·      Natural Disasters

Covers events like cyclones, earthquakes, floods, and lightning.

·      Collision or Overturning

Protection against accidents involving vehicles, ships, or aircraft.

·      Loading & Unloading Risks

Covers damage during cargo loading/unloading at ports or warehouses.

·      General Average Loss

If cargo is sacrificed to save the vessel, losses are shared by stakeholders—covered under marine insurance.

·      Transit Delays (Optional)

Covers losses arising due to delayed cargo delivery.

·      War & Strikes (Add-on)

Protection from war, riots, strikes, or civil unrest.

Exclusions Under Marine Insurance

Marine insurance does not cover everything. Common exclusions include:

• Ordinary wear and tear
• Leakage due to poor packaging
• Losses due to delay (unless add-on chosen)
• Insolvency of ship operators
• Willful misconduct of the insured
• Losses occurring outside the agreed route

Understanding exclusions helps you purchase the right add-ons.

Benefits of Marine Insurance for Businesses

Marine insurance offers valuable protection to businesses of all sizes. Key benefits include:

1. Financial Protection Against Losses

Accidents and unexpected events during transit can result in severe financial losses. Marine insurance ensures you get compensated for such losses.

2. Smooth Business Operations

When goods are insured, businesses can maintain delivery schedules and customer commitments without financial pressure.

3. Proects Global Trade Activities

For exporters and importers, marine insurance is mandatory in many cases and essential for international business security.

4. Coverage Across All Modes of Transport

Whether your goods move by ship, truck, air, or rail, marine insurance provides end-to-end coverage across the entire transit journey.

5. Customisable Policies

Businesses can choose from various policies and add-ons depending on cargo type, frequency of shipment, and risk exposure.

6. Enhances Business Credibility

Insured shipments build trust with clients, partners, and investors.

How to Buy a Marine Insurance Policy in India?

Buying marine insurance is simple and can be done online or through an insurer. Follow these steps:

1. Assess Your Cargo Needs – Identify type, value, route, and mode of transport.
2. Choose the Right Policy – Voyage, open, inland, or turnover-based.
3. Compare Plans – Evaluate coverage, premium, and exclusions.
4. Submit Required Documents – Invoice, packing list, bill of lading, etc.
5. Pay the Premium – Policy is issued instantly.

For regular shipments, an Open Marine Policy offers maximum convenience and cost savings.

Conclusion

Marine insurance is one of the most crucial tools for safeguarding goods and assets during transit. Whether you're an exporter, importer, transporter, or manufacturer, a marine insurance policy ensures peace of mind, reduces financial risk, and helps your business operate smoothly. With flexible coverage options, affordable premiums, and comprehensive protection, marine insurance is an essential investment in today’s fast-paced trade environment.

Frequently Asked Questions

Q.1. What is a Marine Insurance Policy?
A Marine Insurance Policy protects goods, cargo, ships, and other assets during transit by sea, air, rail, road, or inland waterways. It compensates for losses due to accidents, theft, natural disasters, fire, or handling issues during transportation.

Q.2. Who should buy marine insurance in India?
Marine insurance is essential for importers, exporters, manufacturers, traders, logistics companies, transporters, e-commerce businesses, and anyone involved in shipping goods domestically or internationally.

Q.3. What does marine insurance cover?
Marine insurance covers damage to goods, theft, pilferage, fire, explosion, natural calamities, accidents, container handling issues, collisions, general average loss, and transit-related risks. Optional add-ons include war risk, strike risk, and delayed transit coverage.

Q.4. What are the different types of marine insurance policies?
The main types include:

• Marine Cargo Insurance (Specific Voyage Policy, Open Policy, Inland Transit, IMP/EXP policy)
• Marine Hull Insurance (covers the ship, machinery, and liabilities)
• Marine Sales Turnover Policy (STOP) for businesses with high shipment volumes

Q.5. Is marine insurance mandatory in India?
Marine insurance is not legally mandatory for all shipments, but it is highly recommended for import–export consignments. Many international trade agreements and contracts require marine insurance for smooth business operations.