Marine insurance covers the losses or damages caused to ships, terminals and any transport or cargo by which goods are transferred, acquired, or held between different points of origin and final destination. The term may also apply to inland marine but it is usually used in the context of ocean marine insurance. Marine insurance is a haven for transporters and shipping corporations because it helps to lower the aspect of financial loss due to cargo loss.
Insurance is a crucial aspect because through this policy, shipowners and other transporters can be sure of claiming damages in case of a mishap. Sometimes, it happens that despite following all the safety regulations, losses or damages arise. Along with natural hazards which have the potential to disrupt the cargo and vessel, there are other incidents and attributes which could also cause a major financial loss to the transporter. For instance, incidents like piracy and possibilities of cross-border shootouts are more prevalent when it entails water transportation and therefore, to avoid any such loss or damage, it is in the interest of the transporter to buy a marine insurance.