What is Marine Cargo Insurance?

Marine cargo insurance in Kenya is a type of insurance that provides coverage for goods and merchandise during their transportation by sea. This insurance is designed to protect the financial interests of businesses or individuals involved in importing or exporting goods through maritime trade.

marine cargo insurance coverage

Types of Marine Cargo Insurance

Marine cargo insurance coverage comes in different types, each offering varying levels of coverage based on the needs of the insured party. The two main types of marine cargo insurance policy are:

Voyage Policy

A voyage policy provides coverage for a single shipment from one point to another. Once the shipment reaches its destination, the coverage ceases. It is suitable for businesses that engage in occasional or irregular shipping activities.

Open Policy

Continuous Coverage: An open marine and cargo insurance policy provides continuous coverage for multiple shipments over a specified period, often a year. It eliminates the need to obtain separate insurance for each shipment. Convenient for Regular Shippers, businesses involved in frequent or ongoing import/export activities often find open policies more convenient and cost-effective.

Additionally, within these broad categories, there are two primary forms of coverage:

All Risks Coverage:

This type of marine insurance policy offers broad coverage for a wide range of risks. It typically includes coverage for most perils, except for those specifically excluded in the policy. All risks coverage provides a high level of protection and is suitable for valuable or sensitive cargo.

Named Perils Coverage:

This policy covers only the risks explicitly listed in the insurance contract. Common perils include fire, theft, sinking, collision, and other specified events. Named perils marine cargo insurance coverage may be more cost-effective but offers a more limited scope of protection compared to all risks

Benefits of Marine Cargo Insurance

Marine cargo insurance in Kenya, like in other countries, offers several benefits to businesses involved in international trade and shipping. Here are some key advantages:

  • Protection Against Loss or Damage: Marine cargo insurance provides financial protection in the event of loss, damage, or theft of goods during transit. This helps businesses mitigate the risks associated with the unpredictable nature of maritime shipping.
  • Contractual Requirement: Many trade contracts, especially those involving international shipments, require the buyer or seller to have marine cargo insurance. Having insurance helps businesses comply with contractual obligations and reduces disputes.
  • Financial Reimbursement: In the event of covered losses, the marine and cargo insurance policy reimburses the insured for the value of the lost or damaged cargo. This financial security ensures that businesses do not suffer significant financial losses due to unforeseen events.
  • Coverage Across Borders: Marine cargo insurance provides coverage for goods during their entire journey, whether transported by sea, air, or land. This global coverage is essential for businesses engaged in international trade.