In international transactions due to nature of business, the risk of loss or damage to goods is relatively high. If the loss or damage does occur, profitability will be lost unless the insurance company covers the goods.

Cargo insurance is the best way to minimize the risks of loss associated with the transportation of goods via Sea, Air or Land between exporters and importers.

The terms and services relating to marine insurance are the same in all over the world with some exception.

Cargo

Based on the nature of the goods and mode of transportation there is a bundle of different clauses in use today. For example, there are special trade clauses for shipments of, Container, coal, oil, rubber, timber, frozen food and meat, as well as a variety of special extension clauses.

There is important factors in a shipment that effect the premium such as mode of transportation, type of goods, packing, size/weight/value, duration, economic, social and political environment.

The standard policy represents the general information regard; shipment date, Conveyance, insured value, place of origin, final destination, description of the goods and consignee. The important portion of the insurance agreement is the clauses, which are incorporated by attachment to the policy, that are the essence of the contract. But the policy may contain, specific wordings which extend or restrict the basic cover. For example, special conditions(war, strike, riot) , a deductible or an excess.

The main clauses in cargo insurance are:

• Institute Cargo Clauses which consist of:
• Institute Cargo Clauses (A)
• Institute Cargo Clauses (B)
• Institute Cargo Clauses (C)
• Institute Cargo Clauses (Air)
• Institute War Clauses
• Institute Strikes Clauses
• Institute Trade Clauses
• Additional Clauses
• Additional Terms

HULL

Hull includes the whole package of the ship, including stores, nets, ropes, equipment, bunkers etc.

Today the term has been widened to Hull and Machinery. The term Hull is also provides a range of protection for liabilities, which is a major interest of vessel owners.

The coverage is "Disbursements and Collision Liability". Disbursements include the ship's stores, bunker fuels and freight-earnings capacity up to an aggregate amount of money or a percentage of the total value for Hull and Machinery. The second, Running down Collision liability, provides cover to the ship-owner for ¾ of liability to other ships in the event of collision.