Every type of business comes with risks, many of which can destroy a company or put a severe dent in profits. However, there are ways to reduce your exposure and protect yourself from the worst impact. To prevent significant losses, shipping companies and cargo transporters must take out maritime insurance covering various risks.
In addition to paying for damage to your ship and loss of your cargo, some policies will also cover a part of your profits, and you can get a payout if there is a liability issue. However, you’ll need to ensure that you followed all the regulations and were careful when packing your cargo, as problems caused by negligence aren’t usually covered. Let’s examine what insurance can do for you and where you can access it.
What Is Maritime Insurance?
Everyone who is transporting goods around the world will need to take out a special kind of insurance. Several different plans are available, and the various insurance companies will include other things in their policies. However, most will cover the damage caused to your ship and car when you encounter unexpected difficulties on your journey. An excellent policy will also payout for the markup value and cover any liability issues you might face.
Damage to Your Ship
The vessel you use to transport goods is at the heart of what you do, so you should maximize the protection it receives. Hull insurance will cover any physical damages to your ship, including a problem with the structure or internal machinery. As well as ships, it can also cover other types of vessels like oil rigs, tugboats, floating equipment, or barges.
Loss of Cargo
In addition to your ships and other water-bound vessels, you’ll need coverage for the goods transported. Cargo insurance will cover any issues with the items you transport from one place to another. Although it is mainly meant for physical damage, some policies will also pay for theft. Read the fine print and double-check that you have chosen the right policy for your needs before signing up.
Mark Up Value
The price you pay for your goods isn’t what you hope to get at the destination. There will be a mark-up, which is where you make your profit. While most policies cover the cost of the lost cargo, so you end up where you started, some will pay for a part of this markup.
Whether this type of insurance is worth, it depends on your business and how much risk you’re at. Policies that include mark-up value are usually more expensive, so you must decide if this is a good idea.
Liability insurance is a special kind of coverage you might want to take out if your business is prone to accidents, you’re likely to face issues with your staff, or there is a chance that you will damage someone else’s property. It covers you for these kinds of incidents and can pay you compensation for high medical bills, the damage you caused to property, and even a loss of life caused by your operations.
What Could Cause Such Damage?
Now you know what risks insurance covers, you might wonder whether getting insurance is worth it. How realistic is it that you’ll face these challenges, and how often do accidents happen? Unfortunately, the future isn’t predictable, so you don’t know whether your business will ever need to make a claim. Cargo usually arrives safely, but specific threats can put your operations at risk.
One of the main issues is natural disasters. With climate change, these are becoming increasingly common, which means that one of your vessels will likely get caught up in one at some point. What’s more, there are still pirates intent on stealing your goods. In certain regions, there might be cross-border conflicts that could also affect the route and safety of your ships.
When Are You Not Covered?
So far, we’ve discussed all the ways you’re covered by insurance. A few instances are excluded, no matter what policy you go with. If you don’t stick to the local and worldwide laws that govern maritime operations, you’re unlikely to be able to make a claim. Similarly, incidents that are caused by your negligence won’t be covered. For example, you might not receive compensation if you made a mistake while packing your goods.
Many policies also exclude contamination caused by radioactive rays and civil commotions, riots, and strikes. However, it would be best to read your policy closely to determine precisely what is included and what isn’t.
Which Policy Do I Need?
As mentioned, many different maritime insurance policies are available, and they are offered to you by many companies. Each one will be slightly different so they could be a good fit for some businesses but a bad one for others. The best way to discover which policy you need is to speak to a professional in the field. An independent insurance agency can help you find something that is suitable and not overpriced.
Using an agent has many advantages. Not only will they help you to consider all the options, including some that you might have missed on your own, but they will also save you a lot of time. Because they work in insurance daily, they can quickly quote you. If you were to do the same on your own, it might take you many hours of research.
Finding a Great Policy
Before sending you relevant quotes, your insurance agent will speak to you to learn more about your situation and what your business does. They will talk to you about the size of your vessels, the type of cargo you transport, and the areas you operate in. Moreover, they will ask you about your preferences and what risks you perceive in your business.
Then, they can find some insurance providers who might be a good fit. Together, you will go through the quotes and decide which is most advantageous for you. If you already have a policy, your agent can help you figure out whether it is optimized or whether there are areas of risk you haven’t considered.
Get the Coverage You Need
A great insurance agency can help you sort through the various companies and what they offer. They will work with you to determine which aspects are the most crucial and where you can get the maximum coverage for the least amount of money. Call or message us now at iInsure to speak to one of our experts in this field. Darryl Stidham and his team will be more than happy to review your situation and provide you with relevant quotes.