Businesses earn money by selling their goods or services. Whether you are exporter or importer, you are investing in your business every time you send your cargo. However, it’s surprising to see the number of businesses who don’t safeguard their investment with a comprehensive marine insurance policy and pay heavily for it when the loss occurs.
Whether importing or exporting through road, rail or air, marine insurance is a necessity which covers losses and damages caused to cargo while it is still in transit.
Many people try to save their money by ignoring marine insurance, but here are some of the reasons, why it can be a bad idea. When you don’t purchase a marine insurance policy, you are stalling the business growth.
- Coverage for financial loss
If you are an exporter who has not received the entire payment for the goods at the time of shipment or an importer who has made the entire payment in advance, you always run the risks of suffering a major financial loss if the goods are damaged or stolen during transit.
- Contractual requirement
As per your sales contract, you may be obligated to provide marine insurance to safeguard the buyer’s interest or their bank’s interest. Failure to do so can entail a financial loss in case loss or damage happens to the goods, however, non-compliance with the terms and conditions of your policy contract with the buyer can give rise to legal issues.
- More control over the insuring terms
Though relying on a buyer’s or seller’s insurance terms may be a viable option, you need to be satisfied that the marine insurance has been bought and different terms, valuations and limits specified by each insurer are apt as per your different requirements. Further, if a claim arises which includes dealing with a foreign insurance company, you might have to face issues due to different languages. It can be both time-consuming and frustrating.
- Facilitates global trade
The volume of export and import has increased in recent times and so are the risks of loss as well. Here, marine insurance policy plays a crucial role in facilitating overseas trade by curtailing the risks thereof.
- Gives peace of mind
A marine insurance policy gives peace of mind to businessmen by meeting their financial losses which may arise from marine risks. The policy helps in reducing tension and anxiety and takes away fear from people who are in the foreign business. As a result, they are able to concentrate on their business without worrying about the safe transit of goods.
- Improves quality of life
A marine insurance policy plays a crucial role in controlling losses which may arise from different marine risks. As a result, more people are encouraged towards engaging in global business. It means, there are more investments, more production, more job and more income. All these help in improving quality of life.
- Expedite the cargo release
You may need to sign a bond and post a cash deposit in order to release your cargo following a general average, even when loss or damage caused to your goods. By buying marine insurance, the insurer will assume the responsibility and help in expediting the release of your cargo. General average is a globally accepted principle, where if certain losses or damages happen to the vessel, all parties will equally share the losses.
- Gives social benefits
A marine insurance policy helps companies in recovering their funds after a loss. It keeps the business going and goods are continuing to be sold in the society. The social benefit which people get here is that as people do not lose their jobs and their income remains intact. It helps in boosting the growth of the economy.
You are doing business to earn profits, and therefore, don’t let any unfortunate event derail its growth. Buy a marine insurance policy to get complete protection against a myriad of risks and damages.
