Marine Cargo Insurance

Imports and exports are an integral part of our economy. We export a wide range of goods such as iron, coal, gas and wheat. In return we import finished goods such as motor vehicles, equipment and computers.

Marine cargo insurance is designed to cover such goods being transported by air, sea, rail, road, post or courier.

The cover provides physical loss or damage for goods being imported or exported from Australia. For goods transported throughout Australia, local transit cover may be sought.

There are generally two types of marine cargo coverage available for you in the market.

1. An Open or Annual Cover

This type of cover is used by people who regularly import into or export goods out of Australia during a period of insurance (generally 12 months).

An estimate of the total value of imports or exports is generally made by the insured to the insurer at the beginning of the policy period every renewal. The insurer will agree to cover these items taking into consideration a number of factors such as:

1. The type of goods being transported
2. Their destination
3. Method of transport
4. Packaging
5. How the goods will be valued
6. Average value of each shipment

At the end of the policy period each year the insurer may required a declaration being completed by the insured of the actual value of goods transported during the period of insurance. An adjustment to the premium paid may be applied by the insurer.

2. Singe Journey Cover

The coverage provided is for a single journey only. This is mainly purchased by individuals or small business for a one off shipment of goods.

A single insurance payment is made at the commencement of the journey and no further payments or adjustments are generally made.

Inland or Local Transit

Inland transit refers to goods being transported within Australia by rail, road, air or sea. In the same way Marine cargo has two types of covers, you can elect for an annual or single journey cover.

Some common shipping terms used:

Bill of lading
The document that shipping companies issue on receipt of cargo for shipment and as evidence for the contract of carriage. It sets out all the details for each shipment.

CIF (Cost Insurance Freight)
A term which means that the seller has the same obligations as under CFR (cost and freight) but with the addition that the seller has to obtain marine insurance for the cargo against the buyer’s risk of loss or damage to the goods during carriage.

FOB (Free on Board)
A term meaning the seller delivers the cargo when the goods pass the ship’s rail at the named port of loading. This means that the buyer has to bear all costs and risks of loss or damage to the goods from that point. The FOB term required the seller to clear the goods for export.