Last Updated on Monday, September 27, 2021 by ProsCons
There are many types of insurance policies around the world. Among them, Marine insurance is probably used mostly by people or companies related to ships or cargo. Marine insurance covers losses mainly through cargo losses, ship damages, vessels damages, and other marine-related jobs. It covers damages through natural causes as well as accidental situations.
About one-third of our planet is covered by the sea. And naturally, there are many ships, vessels, or cargo floating in those waters. Marine insurance is basically getting your boats or ships insured for any unintended damage or loss.
Weather and situations in oceans and seas are always unpredictable. There is the majority of trade goes through the sea. So, it is important to keep the cargo safe. And, if an accident does happen then losses can be big and difficult to cover. So, marine insurance help to cover those losses to keep the trade among the sea continues swiftly.
Here, we will be stating some of the advantages of marine insurance. We will be including some disadvantages too.
Pros of Marine Insurance:
1. Maintain Global trade:
Maximum trade around the globe goes through the sea. Basically, we are talking about billions of dollars every day. But months in the sea make the cargo within the ship vulnerable. And there is always the risk of something going wrong. And if something goes wrong during the transportation then the financial loss is huge both to importer and exporter. So, marine insurance help to minimize the financial risk to the companies involved and keep global trade running.
2. Covers the financial cost for damaged goods:
Transportation by sea takes time. The journey is not always smooth sailing. Among tons of cargos on the ship, there is always some portion of the goods damaged during the delivery. In such conditions, marine insurance will cover the expense for any damaged pieces of goods.
3. Covers human casualty onboard during transportation:
Marine insurance also covers human casualty during transportation. It covers for human injury or death of any transporter on board the ship. So, it is a bonus point for those involved.
4. Financial stability for parties involved:
Cargo shipping is big business. Even a small container contains goods that are of great value and costs. If some accidents do occur then the financial impact caused is huge. But marine insurance helps those parties involved to maintain financial stability. As a result, continue their business.
Cons of Marine Insurance:
1. Full amount cannot be claimed:
In the situation of claim in insurance, there is a certain amount is deducted. The amount differs among insurance companies. In short, the people or company involved will not get the full amount.
2. Increase in cost:
Insurance costs will always be added to the expense. Those expenses are later added on to the cargo and goods. By the time it reaches the consumer people the cost is increased for them.
These days Marine insurance is a must for all. Most buyers will not buy cargo goods without insurance. Also, the pros of insurance far outweigh the cons. Those businesses having to deal with the import and export of goods need this insurance. But of course, it is always advised to read all the terms and conditions properly beforehand. Otherwise, the risk is increased rather than decreasing.