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How much does marine cargo insurance cost

How much does marine cargo insurance cost
How much does marine cargo insurance cost

Having the right forms of insurance can be the difference between a stable business with continued growth, and a bankrupt one. Guaranteeing company longevity is essential to its success, particularly within heavy-duty industries with unique requirements like logistics and maritime transport. Working with providers experienced in this niche field helps simplify the complicated arena of marine insurance, directing you straight to the specific forms of coverage needed for your particular line of business.The following guide details everything you need to know about marine cargo logistics insurance in Perth, from costs and coverage, to benefits and exclusions to look out for.

What is marine cargo insurance?

The transportation of shipped goods requires particular forms of insurance to cover the particular risks involved. This branch of protection is known as logistics insurance, and includes the movement of goods via air, land, and sea, covering lost or damaged items up to the designated limits.Marine cargo insurance covers freights and marine vehicles transporting property; ocean marine looks after sea shipments, and inland marine insurance covers land shipments. With plenty of variations of storage and transportation options being used to move goods in, out, and across Australia, there are many forms of logistics insurance in Perth available to suit different needs.

The Australian maritime industry

As the world’s largest stand-alone country, with no land borders connecting to other countries, Australia relies heavily on the import and export of goods via the expansive local maritime industry. Several factors have evolved to boost our use of marine cargo, including our diverse industries, expansive amounts of raw materials ready for export, inimitable oil and gas industries, and of course, the never-ending coastline. Operating as one the country’s most lucrative and relied-upon industries also makes it a heavily regulated one, making quality marine and logistics insurance essential for safe operations, and long term success within the field.

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Coverage details

The right marine cargo coverage for you depends on which mode of transport - or combination of vehicles - as well as whether you’re shipping internationally or domestically.

What it covers

Reliable marine cargo insurance covers the cost of any damage done to your freight, minus the deductible. However, the event that caused the damages needs to be covered by your insurance premium; typical causes include:

  • Theft or piracy
  • Accident with another vehicle
  • Rejection from customs
  • Abandonment of cargo
  • Natural disasters
  • Events resulting from war

It is worth noting that in more recent times, fires on container vessels are becoming more common. In 2017, 94 vessels were declared at a loss, of which 6 were caused by fire, according to the Allianz 2018 Safety and Shipping Review. Fire was the third most common cause of total losses from 2008 to 2017. To make sure you are covered in all instances, including the risk of fire and explosion, talk to a marine cargo insurance expert.

What it doesn’t cover

It's imperative to remember standard cargo insurance doesn’t cover carrier liability. This makes additional carrier liability insurance essential for those responsible for ensuring the shipment arrives at its destination.Most freight and marine insurance policies also include specific exclusions, where coverage does not apply when certain instances are at play. This takes key accidents or incidents into account, removing responsibility from the insurer should the fault lie with the carrier, cargo, or other. Common exclusions include:

  • Dangerous cargo - forms of hazardous materials, some electronics, and any freights classified as dangerous can be excluded.
  • Faulty goods - should it be shown products included in the cargo caused the damage or accident, the carrier and insurer are not responsible.
  • Defective packaging - should the damage to your shipment be caused by incompetent packaging, the responsibility lies with you.
  • Forms of transport - certain insurance policies exclude trucks, or other forms of cargo vehicles.

The many and varied forms of marine cargo insurance - each with its own set of inclusions and exclusions - makes it a tricky area to navigate successfully. To guarantee complete coverage, and a secure safety net should an unfortunate incident occur, the safest route is working with experts in logistics insurance who can ensure complete coverage for your niche requirements.

Determining insurance costs

The cost of marine insurance revolves around the shipment in question; the value of it, or its value plus shipping costs are analysed, with a value percentage presented as the cost of insurance - typical percentages average around 60%.Should your cargo become damaged, the carrier involved is only responsible for the amount lost and is not liable for resulting costs such as lost income.Accurately calculating costs to determine your company’s freight insurance requires the evaluation of key details:

  • Classification of freight - transporting goods by air, land, or sea, results in differing insurance costs for each freight type.
  • Cargo contents - riskier forms of cargo such as flammable goods will increase insurance premiums.
  • Shipping route - different sea routes hold varying levels of risk for marine transport companies, such as theft, piracy, or political instability.
  • History of loss - prior losses are looked at to determine how risky your business is, and whether your premium should increase because of it.
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Benefits of quality freight insurance

Finding the right form of marine insurance for your company is imperative, to make sure all goods shipped are covered in the event of an accident. Whether you work as an importer or exporter, operate, or own a vessel, or own a marine operations company, having the correct insurance policy is a must.Working with insurance specialists in the marine and logistics industry means getting in-depth knowledge and professional experience, helping you find the right policy for your needs. Key benefits of reliable marine insurance include:

  • Coverage should your cargo go missing.
  • Cover if your goods are damaged.
  • Financial loss protection, to prevent knock-on effects from loss of profit.
  • Serious risk reduction.
  • The peace of mind to operate your business efficiently, without the risk of a damaging event derailing your operations.

Get a quote on WA’s best marine cargo insurance

As long standing leaders in comprehensive logistics insurance in Perth to a wide range of transport industries, and specific areas within marine logistics, we’re best placed to advise and provide the right insurance for your needs.Request a quote online today and be prepared for whatever tomorrow brings.

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