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What are the Perils Covered in A or B Marine Insurance Policy?

Posted on 29 August, 2022

We live in a risk society subjected to perils or risks of various nature. Perils refer to a potential event, incident, or factor that could cause a loss, like a fire burning down the house. Knowing that human life and possessions are subjected to potential risk most times, insurance is the shield we use to defend ourselves.

For instance, professionals working on construction sites, oil rigs, or ships are subjected to many risks in their day-to-day tasks. They power through knowing they have good health, property, and on-site accident insurance.

Although used synonymously, risks and peril carry different weights, especially from an insurance perspective. Risk signifies the possibility of loss, whereas peril indicates the cause of loss itself. For example, perils of the sea under marine insurance policy imply damages caused to the ship during the voyage due to an act of God without human interventions.

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The kind informs the extent of peril coverage of policy one opts for. Let’s understand the kind of perils to enlighten your understanding of this.

What Are Different Types of Perils?

Perils are of different types, and they vary depending on the type of insurance. For instance, the marine insurance policy would list different perils compared to house insurance. Fire or theft would be considered perils in the case of house insurance. Similarly, marine insurance would cover ship wreckage, collision, and fire.

Although perils covered are informed by the type of insurance, two types of perils are present- named perils and comprehensive perils comprise most insurance policies. Let’s dive in and understand the difference between these two.

1. All Risk Perils or Comprehensive Policy

All risk is a comprehensive insurance policy covering all perils not particularly excluded from the list. For instance, setting out on a voyage or sending cargo out without insurance is a huge gamble. As they say, anything could go wrong at sea. An all-risk marine insurance policy acts as a savior in such situations.

The perils of the sea covered under all-risk perils include the following:

  • Sinking

  • Burning

  • Vessel management fault

  • Explosion

  • Heavy weather

  • Breakage or leakage

  • Latent hull defects

  • Improper stowage

  • Stranding

  • Collision

  • Boilers bursting

  • Water damage

  • Condensation

  • Non-delivery

  • Theft

Contrary to the suggested name, the all-risk policy doesn’t cover all situations. Some of the perils excluded from the all-risk marine insurance include:

  • Intention damage or inherent vice

  • Strikes, wars, or civil riots

  • Vessel management fault

  • Sprigging a leak

  • Death of animals onboard due to natural perils

  • Death of animals onboard due to natural perils

  • Loss by rats

  • Wear and Tear

2. Named Perils

The coverage offered by named perils is relatively less compressive than all-risk perils. Named perils offer coverage for those perils “named” in the policy, limiting the extent of insurance coverage. The insurance type would dictate the named perils. In the case of a named marine insurance, mainly four named perils are covered- burning, sinking, collision, and stranding for ocean conveyance.

However, when it comes to house insurance, some of the named perils may include the following:

  • Fire or lightning

  • Riots or civil commotion

  • Vessel management fault

  • Vandalism

  • Volcanic Eruptions

  • Accidental power surges

  • Falling objects

  • Vehicles

  • Windstorm or hail

  • Smoke

  • Theft

  • Accidental cracking, bulging, or burning of home system

  • Aircraft

  • Weight ice, snow, or sheet

In reality, your home insurance may only cover some of these perils like fire, vandalism, theft, or wind damage. If the loss you incur is not listed in the named perils, you would bear the repair charges.

If you are wondering which insurance to opt for? Then the answer is as simple as it depends on your situation, budget, geography, climatic condition, and the object/ property you aim to protect (i.e., ship, car, home, business, or property). From a marine insurance policy perspective, all risk peril policy seems more appropriate if your cargo(s) sets out for long voyages. On the other hand, for house insurance, the named peril policy may seem like a better option if you pick the most anticipated and prominent perils that impact your property, like vandalism, fire, or theft.

Conclusion

Picking an insurance policy, be it marine insurance, car, or house insurance, is highly dependent on knowing what you need protection against? What is most likely to go wrong? Which high-risk are you running? It’s mostly asking yourself the right questions and knowing what your insurance could cover. Intricately paying attention to the insurance details, including coverage, procedure to avails insurance, percentage of the amount covered by insurance, time period of the process the request, and customer satisfaction level is very important when it comes to picking your insurance.

  • Marine Insurance
  • Product Code: 2005
  • Product UIN: IRDAN115P0011V01200102

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This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). customersupport@iciclombard.com. www.icicilombard.com. (Workman Compensation, 4010 , IRDAN115P0010V01200607)