Marine insurance has been around since Edward Lloyd famously opened his coffee house in 1686. Despite being the oldest form of insurance, it still seems to be one of the most  misunderstood forms of insurance.  

Marine insurance has a reputation for being technical and full of specialised terminology; Incoterms, general average, salvage charges, deviation, and warehouse-to-warehouse cover, to name a few.  

De-bunk the myths

There are many myths surrounding marine insurance. Here’s a few I’ve come across over the years and a brief explanation to help minimise the misinformation:  

All losses are covered automatically - Actually cover depends on the type purchased. “All Risks” covers a wide range whilst “Named Perils” covers explicit events like fire or sinking of the vessel.  

Shipping companies pay for any losses - The reality is that shipping companies are not insurers and only offer limited liability cover and will not automatically cover the full value of lost or damaged goods and only when they are only at fault. A marine insurance policy provides more comprehensive protection against loss or damage to your cargo.

Insurance is only for sea shipments - Marine policies can cover goods from “end to end” which can be on land and sea.

It’s too expensive for small businesses - The cost is based on multiple factors such as the cargo value, the cargo type, the shipping route, and the type of packing. In addition, the client can decide on what level of cover they want which also impacts on price.

Marine insurance is complex and intimidating - Honestly it’s not inherently difficult, it does require general knowledge and common sense. Once the core principles are explained clearly and connected to real-world examples, it should become easily understandable  

Opportunity for growth

Many clients’ need marine insurance and this is where the broker can add real value, but they must consider the following before stepping into the marine insurance arena:

Definitely the most important is a responsive underwriting team. Answering the phone and responding to emails are vital business skills. You will thrive when you know they can easily  access informed guidance, backed up with years of marine insurance experience. A strong support structure will encourage you to explore marine insurance without fear.

Hands-on support is invaluable. When underwriters partner with brokers, reviewing risks, interpreting documents, or assisting with claims becomes far less stressful.  

Short, practical educational training sessions will help to demystify marine insurance. Workshops, webinars, and case-based learning can also assist. When you can see how easily goods can be damaged, delayed, or misrouted the value and relevance of marine insurance is quickly understood.