Opinion

Marine transit insurance is not just essential for boats

Insurance-column---issue-25-2020

Insurance is said to have been around since the Romans and Greeks in the form of what was called a “Mutuum Loan”. It is believed that the Roman and Greek villagers used to pool their money (or goods) to enable them to pay for burials of their deceased family members, among other things which included the goods they traded by sea.

Basically, they all put money (goods) into a “pot” and if you needed some money (or goods), you took some out of the pot and paid for the burial.

Marine insurance had been around since those times, albeit in a very primitive form, until the late 1680’s, when a Coffee House was opened on Tower St in London. This Coffee House was named Lloyds Coffee House after the owner Edward Lloyd.

Due to its location it soon became a popular meeting place for ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. The coffee shop was where groups of traders, shipowners, brokers and investors would meet to discuss and negotiate with each other for each shipment of goods.

Each investor would assume a portion of the cost of the goods and the ship itself if it was lost at sea, in return each investor would be provided a portion of the traded goods sometimes in lieu of money. From this little coffee shop in the middle of London grew the largest diverse insurance market place in the world, now known as Lloyds of London.

In modern times Marine Insurance has become very much more sophisticated, but the basic premise of sharing the risk among many, remains the same.

Today Marine insurance has evolved and covers various different types of risk, which includes Marine Transit of which most transport operators would be more familiar with.

Marine Transit insurance has differing types of cover, so it is important that you understand the differences between each type of Marine Insurance.

Below we have provided a brief generalised description of just some of the types of Marine Insurance that are most related to the road transport industry within Australia.

After you have read what each of the below types of marine insurance cover, check your own marine policy and if you are still not confident of what you have, speak with your broker, before it is too late.

Marine Hull: that’s the one you need for your tinny, ski boat, yacht or ship, etc.

Annual Marine Cargo: usually for the larger manufacturers/suppliers of goods that are carried by others via sea, air and land.

Single Marine Cargo: for importers and exporters or suppliers of goods to import/export goods and can include the land transit leg of the journey in Australia.

Single Marine Transit: for “one off” movement of goods within Australia

Home Removals: an individual one-off policy for a house removalist, usually taken out for each individual removal job.

Own Goods in Transit: usually for farmers, smaller manufacturers, and wholesalers etc who carry/deliver their own goods.

Carriers Goods in Transit: for road transport operators whom carry goods for others. (It does not cover you for goods owned by yourself)

Couriers Transit: for “couriers” who usually deliver smaller individual packages. Many large courier companies have their own employee/contractor schemes for the couriers that work for them, however it may not cover the courier should they also do work outside of the company.

Cargo Carriers Liability: For carriers operating under approved consignment notes or other contracts to protect themselves against liability. This policy also extends to cover delay, loss of market or consequential loss caused solely by loss or damage to the insured goods.

Beneficial should you wish to defend a claim against you using your Terms & Conditions as a defence under you consignment note.

It is also important to also understand that marine policies offer either Comprehensive or Defined Events cover.

Generally speaking the main differences between the two, is that Comprehensive will cover “Accidental Damage” automatically, whereas Defined Events will only provide limited cover and only cover for the “Events” that you have selected to be covered for.

Be careful of the type of cover you select and make sure you understand the policy you are paying for, as always, cheapest is not always best.

Important: All answers and information contained within this article should be considered as General Advice Only. This advice should only be considered as General in Nature and its intent is only to prompt the readers to investigate their own individual insurances. It has been prepared without taking into account the readers own individual objectives, financial situation or needs.

Because of that, before acting on the above advice, the client or any persons should consider its appropriateness (having regard to their objectives, needs and financial situation) and seek further independent advice from their own financial advisor.

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