Marine insurance

Marine Insurance - Goods in Transit

With the advancement of civilization and the evolution of international trade, the need for this type of insurance has significantly increased. The world today heavily relies on air, sea, and land transportation for all daily and business transactions, making the need for insurance during goods transportation crucial. Shipping any type of goods without the necessary coverage is unthinkable.

The Importance of Insurance in International Trade:
In banks, when opening any documentary letter of credit for importing or exporting goods, they usually require proof of insurance for the goods covered by the credit. Without insurance, the value of the goods in case of damage or loss becomes an unsecured debt, making the insurance policy an essential element in the world of international trade.

Types of Goods Transportation Insurance:

Land Transport:
Takaful Insurance Company covers the damage and/or loss of goods transported by land, resulting from the following risks:
- Risks of overturning accidents, collisions, or bridge collapses and underground tunnels.
- Railway and train accidents.
- Fire risks.
- Theft by force or violence.

Marine Transport
Takaful Insurance Company covers the damage and/or loss of goods transported by sea, resulting from the following risks:
- Sea-related risks such as sinking, collisions, and natural disasters like storms.
- Fire risks.
- Theft by force or violence (piracy).
- The disposal of goods by throwing them into the sea due to an emergency.
- Coverage of marine transport risks from the source warehouse to unloading at the importer’s warehouse, including:
  - Loading and unloading risks.
  - Risk of loss of freight charges.

Air Transport:
Takaful Insurance Company covers the damage and/or loss of goods transported by air, resulting from the following risks:
- Aviation risks such as aircraft crashes or collisions and natural disasters like storms.
- Fire risks.
- Theft by force or violence.
- Coverage of air transport risks for goods from the time they are received from the exporter’s warehouse until they are delivered to the importer, including:
  - Loading and unloading risks.
  - Risk of loss of freight charges.

Insurance Coverage Categories:
There are global terms for insuring goods during transit, divided into three main categories:
Category (A) – All Risks:
This category provides the widest coverage for goods transported by commercial ships, aircraft, and trucks. It covers all risks such as shortages, theft, breakage, bending, wetness, in addition to basic coverages like fire, explosion, and sinking. This category is the most comprehensive, covering all risks with certain exceptions.
Category (B) – Limited Risks:
This category covers risks like fire, explosion, ship sinking, and damage to transport vehicles such as ship grounding, aircraft crashes, truck overturns, and train accidents. It is less comprehensive than Category (A), but still covers essential risks.
Category (C) – Fewer Risks:
This category only covers risks specified in the policy, such as damage caused by accidents, fire, or explosion, but it does not cover some of the broader risks that may be included in the other categories.

Insurance Value:
Goods are usually insured based on:

The cost of the goods themselves, including shipping charges.
An additional percentage ranging between 10% to 20% of the insurance value to cover extra expenses.

Factors Determining Insurance Prices:

The insurance prices are determined based on several factors, including:

Type of Goods: The nature of the product being transported.
Packaging Method: How the goods are packed and the level of protection.
Mode of Transport: Whether it is by sea, air, land, or rail.
Shipping Method: Whether it is via container or individual shipment.
Journey: The distance and destination of the goods.
Ship Age: If transport is by sea, the ship’s age matters.
Country of Origin: The origin of the goods and the type of insurance coverage required.
Deductible Amount: If there is a specific amount deducted from the loss in the event of an incident.