Marine Insurance: Coverage Options
Marine insurance for complete sets of electrical components is purchased based on specific coverage types: Free from Particular Average (FPA—basic coverage), With Particular Average (WPA—includes partial loss), and All Risks (comprehensive coverage); War Risk and Strike Risk insurance can also be added. Industry experts note that the choice of insurance depends on cargo value and risk: high-value electrical equipment should be covered by “All Risks” (covering losses during loading/unloading and transport); insurance amounts are based on cargo value (CIF price + 10%);
and policies can be purchased through insurance companies or freight forwarders. In the event of a loss, claims are filed using the Bill of Lading and the insurance policy.
Coverage Types and Purchasing
- Free from Particular Average (FPA): Basic coverage (total loss, general average);
low premium; - With Particular Average (WPA): FPA coverage plus partial loss (due to natural disasters); mid-range coverage;
- All Risks: Comprehensive coverage (includes general losses); recommended for electrical equipment;
- Additional Coverage: War Risk/Strike Risk (added for high-risk shipping routes);
- Insured Amount: Based on cargo value (CIF price + 10% markup); full-value insurance;
- Channels: Direct purchase from insurance companies or via freight forwarders (insured at the time of customs declaration); policy travels with the cargo.
Key Points for Insurance
First, matching the coverage type.
Purchase “All Risks” for high-value electrical equipment (full coverage for loading/unloading and transport) and “WPA” for lower-value items.
Second, ensure full-value insurance. Insure based on CIF price + 10%;
under-insurance results in reduced claim payouts.
Third, handling claims in the event of loss or damage.
In the event of a loss, claims must be filed within the applicable time limit using the bill of lading, insurance policy, and proof of cargo damage (inspection report).
Fourth, confirm the deductible terms—specifically the deductible amount or rate—and note that minor losses are typically borne by the insured.
Pitfalls to Avoid
First, “under-insurance”: insufficient coverage leads to reduced claim payouts;
ensure coverage matches the full value.
Second, “inadequate policy type”: basic “Free from Particular Average” (FPA) policies do not cover partial losses;
opt for “All Risks” coverage for high-value goods.
Third, “delayed reporting”: failure to notify the insurer promptly after a loss occurs can lead to claim rejection;
always file claims within the required timeframe.
Trends and Reminders
Marine insurance is moving toward digitalization: online platforms simplify policy purchasing and claims processing, while insurance data (such as route-specific risks) drives pricing.
Exporters are advised to secure “All Risks” coverage for high-value goods, ensure full-value insurance, and report any losses promptly.
Choosing the right insurance keeps risks under control.
