Marine Insurance – meaning, types and how it works


Insurance gives protection over a lot of possible risks. The range of cover is so extensive because anything could happen. Marine Insurance is one of the most important types of insurance. In this post, we’ll be breaking down Marine Insurance, what it means, the types of Marine Insurance and how it works. 

Meaning – what is marine Insurance?

Marine Insurance is a particular type of insurance that offers protection for risks involving marine trade; trade through the sea. Marine Insurance provides cover on the loss of cargo, or any damages that may happen to ships, cargo vessels, terminals, and any transport in which goods are gotten between their original location and where they are expected to arrive. 

Transportation by sea is hazardous. Even if all regulations and guidelines are followed strictly, there is little to be done by way of natural occurrences. These occurrences could be weather hazards like hurricanes or tsunamis, pirate attacks, and conflicts between countries. They can be very common, and they usually the damages incurred cost a lot in terms of financial loss. This is where marine Insurance comes in, protecting against these risks. 

What are the types of Marine Insurance? 

One thing about Marine Insurance is that because the risks vary, it is one of the most customisable types of insurance. This means buyers of Marine Insurance policies get to pick a policy that is best suited for them. This preference could be based on budget, nature of the business or any other factor. Ocean Marine Insurance has to deal with a lot of factors, and so the types of Marine Insurance are classified into three. They are; 

  • Hull Insurance – this type of Marine Insurance offers cover on physical damages to the boat or vessel. This includes the vessel’s operating equipment such as machinery. All water vessels are eligible for Hull Insurance, although it is limited to ships meant for commercial purposes. 
  • Cargo Insurance – this type of Marine Insurance offers protection for the cargo being transported by sea. This refers to any damage that could occur to the shipment. However, some policies cover theft and any other types of losses that are not classified under physical damage.
  • Marine Liability Insurance – this marine Insurance is also referred to as P&I, which stands for protection and indemnity. It offers coverage on third-party liabilities that could occur during shipments. These liabilities include coverage for injuries, illnesses, or loss of life that occur on the sea. It also includes medical expenses, any damages to other ships and cargo as well as other related expenses. 

How does Marine Insurance work?

Insurance policies are very strict contracts, and marine insurance is perhaps the strictest of them all. To claim on a marine insurance policy, you need to follow strict policy requirements, as any discrepancies mean a claim might be denied. There is also the need to understand which policy you’re opting for. The three major types of Marine Insurance policies are; 

  • Open Policy – this provides marine insurance for a specific period, usually a year.  The open policy offers inland marine insurance meaning goods shipped by land are protected, in the sense that they are being transported to a storage facility after they have arrived. 
  • Comprehensive Protection – this policy covers extensively; offering protection against various types of loss. The value of the goods are protected against total or partial loss, as well as any other expenses that arise during transit. 
  • Customisation – this is like an umbrella policy for businesses that have multiple needs.

What are the requirements for making a marine insurance claim? 

Claiming a marine insurance claim is easy if you meet all requirements. However, an insurance company cannot recognise your claim if:

  • Your loss is caused by willful negligence.
  • Your loss is caused by improper packaging of goods.
  • Contamination of your goods is as a result of radioactive rays due to lack of proper packaging.
  • Your loss is caused by a strike, riot, or any civil unrest.


Marine insurance policies provide comprehensive protection against losses at sea. A marine insurance policy is a decision you should invest in if your trade or business involves water operations,

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CIC Insurance

CIC insurance group is a giant financial institution based in Kenya Nairobi. Established far back in 1968, the CIC group has branches across different countries