Marine insurance

What is marine insurance?

Marine insurance is cover against loss or damage to goods while they are being transported, and to ships and the liabilities of shipowners. It is the oldest form of commercial insurance and has its own statute in India, the Marine Insurance Act, 1963, which codifies rules on insurable interest, warranties, proximate cause, total and partial loss, and subrogation. Despite the name, marine cargo cover in India also applies to inland journeys by road, rail and air.

The line has two main branches:

• Marine cargo protects the owner of goods (seller, buyer or both, depending on the sale contract) during transit.
• Marine hull covers the vessel itself, its machinery and, through protection and indemnity (P&I) cover, the owner's liabilities to third parties such as crew injury, pollution and wreck removal.

How marine insurance works in India

Cargo policies. Exporters and importers usually buy cover on the Institute Cargo Clauses: (A) is close to all risks, (B) and (C) cover a narrower list of named events. Domestic transits use the Inland Transit Clauses. Regular shippers take an open policy or open cover, which automatically insures every consignment declared during the year, instead of buying a policy per shipment. A sales turnover policy covers all transits linked to a firm's annual sales. War and strikes cover is added separately.

Who insures depends on the Incoterm. Under CIF terms the seller arranges insurance for the buyer's benefit; under FOB or EXW the buyer does. Getting this wrong is a common cause of uninsured losses.

Hull and P&I. Hull and machinery is written by Indian insurers and heavily reinsured abroad. P&I for ocean-going vessels has historically been placed with the International Group of P&I Clubs. The Directorate General of Shipping notes that P&I certification is required under the Merchant Shipping Act, 2025 for specified vessels, and that more than 95 per cent of Indian P&I demand depends on foreign clubs.

Claims. Cargo claims depend on survey at destination, a timely notice to the carrier and preservation of recovery rights. The insurer pays and then recovers from the carrier where possible. For sea carriage, the carrier's liability rules are now in the Carriage of Goods by Sea Act, 2025, which replaced the 1925 law.

The Bharat Maritime Insurance Pool

The Union Cabinet approved the Bharat Maritime Insurance Pool on 18 April 2026 with a sovereign guarantee of ₹12,980 crore, and the Department of Financial Services launched it on 12 May 2026. Indian member insurers issue hull and machinery, cargo, P&I and war risk policies for Indian-flagged or Indian-controlled ships and for cargo moving to or from India, with risks pooled among members. GIC Re acts as pool administrator. According to the Directorate General of Shipping, claims up to USD 100 million are met from pool resources and reinsurance, and the sovereign guarantee is a backstop for larger claims. The government's stated aim is to keep Indian trade insured when geopolitical conflict drives up war risk premiums or foreign insurers withdraw cover at short notice.

Key numbers

Per the IRDAI Annual Report 2024-25, marine premium written within India was ₹5,504 crore in 2024-25, up 8.10 per cent. Insurers retained about 70 per cent of cargo premium net but only about 28 per cent of hull premium, which shows how much hull risk is passed to reinsurers.

What marine insurance means for distribution

• Marine cargo is a relationship product. Open policies renew annually and are sticky once a freight forwarder, customs broker or exporter is set up with an insurer. Brokers and corporate agents attached to logistics firms, banks financing trade and export platforms are the natural channels.
• Declarations are the weak point. Open covers rely on the insured declaring every shipment. Missed declarations lead to claim rejection. Intermediaries who build simple monthly declaration routines, or integrate with the client's shipping data, cut this risk.
• Clause choice should match the cargo. Selling ICC (C) to save premium on fragile or high-value goods sets up a dispute. A good adviser matches clauses, packing and transit mode to the goods.
• The pool opens new placement routes. For war risk and P&I on Indian-linked voyages, brokers now have a domestic option alongside overseas markets. Distribution teams should understand pool eligibility, documentation and how pricing compares with international quotes.
• Claims support decides renewals. Exporters judge an insurer by how quickly surveys are appointed abroad and how recoveries are handled. Partners with strong survey and settling-agent networks win the renewals.