Describe marine cargo insurance and Marine hull insurance.

Marine cargo insurance

This insurance covers goods and commodities transported by the sea. It is a critical part of overseas sea trade, where the trade is financed through a bill of exchange, which is normally discounted by a bank. The bank does not discount the bill unless the goods mentioned in the Letter of Credit are insured against marine risks. Usually exporters, importers and their bankers prefer to obtain maximum possible coverage for goods-in-transit. The cost of insurance is a small fraction of the market value of the goods to make insurance policy attractive. It covers loss to cargo, due to the following perils: 

1. Storm or collision. 
2. Fire, explosion or lightning. 
3. Leakage in vessels. 
4. Sinking and capsizing. 
5. Jettisoning of cargo overboard when vessels run aground.
6. Stranding that is grounding arising due to wrong navigation. 
7. Washing overboard - where cargo is placed on deck and is subjected to rolling and pitching under conditions of stormy weather. 
8. Loss of package during loading or unloading at the ports. Theft, pilferage and non-delivery.

 The following are the exclusions in this policy:

1. Ordinary leakage, loss in weight or volume, wear and tear.
2. Caused by insufficient, unsuitable packing or preparation of goods.
3. Damage arising from use of weapon of war, by employing atomic or nuclear fission or fusion.

Marine hull insurance
Marine hull insurance involves insurance of ships, including vessel machinery. In this insurance, the insured is indemnified for losses by damage to the ship. It is always written with a deductible. It also has the condition that covers the owner‟s legal liability if the ship collides with another vessel. But, it does not cover legal liability arising due to injury or death to other persons, damage to piers and docks and damage of crew members.

The perils covered in this insurance include sinking, fire, stranding and collision, violent theft by persons from outside vessel, breakdown or accident to nuclear installation. It also covers all perils of the sea, earthquake, volcanic eruption or lightning. The hull insurance covers the construction risk, when the vessel is under construction.