The Earth is seventy percent water and thirty percent land. As massive areas of the Earth is covered in water, any kinds of goods that travel from one country to the other has to happen over the sea. The sea is, hence, a major mode of transportation. Therefore, the oceans that surround the countries witness a lot of navigational activities. Some seas which surround commercial hubs are intensely busy throughout the year with a lot of freight movement happening.
With freight movements increasing, business going global with each passing year and seas getting increasingly busier, it is but natural that the number of accidents on seas would increase. In commercial areas, a lot of overseas trade take place, as goods are imported and exported globally. This makes the sea the only means of transit. However, accidents are likely to happen due to collision between ships or between a ship and any hard object, stranding of a ship, fire or explosion and even sinking. It is the fishing vessels that encounter maximum number of accidents, followed by the cargo ships. Hence marine cargo insurance is a necessity.
To maintain marine safety, it is very important that there is some sort of financial support for the cargo that may be lost or damaged while on transit on the sea. This financial support system would be marine cargo insurance. This is a clause under the Marine Insurance Act of 1906, which insures loss or damage of ships, cargo, terminals, and also the cargo that maybe transferred as an acquired property. To maintain marine safety, marine insurance has been one of the most well developed insurances and originated with the Greek and Roman maritime loan.
Insuring the goods carrier:
While it is important to insure the cargo that is being carried, it is equally important to insure the carrier or liner that is carrying the cargo. If the carrier gets damaged and the cargo is lost in the sea, it would be next to impossible to retrieve it.
Damage to the carrier is most likely to happen when there is a collision with another ship or there is a collision with an object in the harbor. This is termed as “running down”. Apart from this, the carrier may be wrecked in the sea or can also sink. Another threat to the safety of the carrier is pirate attacks. Thus, it is of grave importance to ensure the safety of the goods carriers and also insure the risk posed to them.