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What Does Perils of the Sea Mean in Marine Insurance?

Posted on 29 August, 2022
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If you’re involved in the shipping industry, you’re probably aware of the term “perils of the sea.” But what does it mean? Transporting goods via sea is complex and involves various natural and man-made risks.

In Marine Insurance, the term “perils of the sea” refers to any damage caused by the sea’s natural forces. It can include things like storms, waves, and even icebergs.

Hence, it is crucial to take an appropriate Marine Insurance to cover such risks while transporting goods by sea.

Marine Insurance

What Does the Law Say About Marine Insurance?

As defined under Section 3 of the Marine Insurance Act, 1963, with a Marine Insurance, an insurer is legally bound to indemnify the insured, in the manner agreed, against losses occurring at or due to travelling or sending goods via sea.

In India, Marine insurance is compulsory for all commercial vessels transporting goods or carrying workers, passengers, or cargo across international waters.

Against Which’ Perils of the Sea’ Does Marine Insurance Provide Coverage?

In the sea, Marine Insurance will cover these perils:

  • Damage to ships due to natural disasters, collisions, pirate attacks, crashing

  • Loss or damage of goods or cargo due to any mishap

  • Death of crew members or others on a ship

  • Ship going missing at sea

  • Vessel getting stranded - getting stuck in a shallow region after an accident

A Marine Transit Insurance policy will protect your goods in transit in all modes of transport in case of:

  • Collision between vehicles

  • Overturning of Vehicles

  • Derailment

  • Any accidents between the source and destination of the transport

Today, leading insurers may also let you extend the coverage to loss or damage of goods due to riots, theft, terrorism, strike, and other hostile human acts.

The Kinds of Cargo Covered Under Marine Insurance

Like every insurance product, the coverage depends on the risk involved. However, the following are the types of cargo that Marine Insurance protects from the ‘Perils of the Sea’:

  • General Cargo includes footwear, furniture, food items, electronic items, spare parts, textiles and more.

  • Metal Cargo, including iron and steel rolls and even plastic goods

  • Machinery

  • Liquid Bulk Cargo such as edible oil and crude oil

  • Dry Bulk Cargo like coal, grain, and ore

The Different Types of Marine Insurance

Several different marine insurance policies cover different types of perils. The following are a few offering protection against ‘Perils of the Sea’ at various capacities:

1. Marine Cargo Insurance

There is always the risk of damaging, losing, or misplacing cargo at the terminal and in transit. Any cargo owner who believes that his goods are more prone to such damages than other perils can opt for the Marine Cargo Insurance. Insurers also include third-party liability insurance within this policy to cover any damage to the port, ship, railway track, other cargo, or humans due to the insured cargo.

2. Freight Insurance

This policy provides cover if the freight is damaged or lost or the ship goes missing. The Insurer will indemnify the shipping company for the loss in such cases.

3. Hull and Machinery Insurance

This insurance policy protects the policyholder from damage to the ship or its operational machinery.

4. Liability Insurance

Several liabilities rest on the shoulders of the cargo owner or the ship-owner when they send valuable cargo via sea. Liability Insurance lifts the burden off the shoulders of the owners and indemnifies the third parties for their loss. These unforeseen incidents may include the ship crashing or colliding with another vessel. There may even be pirate attacks that put the people’s lives, including crew members, aboard the ship in danger..

Examples of Perils of the Sea and Marine Insurance with Simulated Scenarios


A vessel by Sanjana Shipping company was carrying a consignment of grains.

The incident

While in transit, the calm sea suddenly became violent. The crew members closed the ship’s ventilators so that the sea’s salty water could not enter and damage the grains. Soon, thunder and lightning started accompanying the already disturbed ocean.

While they successfully stopped the water from entering, the grains suffered severe damage from overheating inside the unventilated chambers.

What the Cargo Owner did

The Insurance Company scrutinised the claim and checked the relevant documents and records. The Insurer agreed that the crew members tried to prevent the damage by the perils of the sea. Thus showing good faith and no ulterior motive. The Insurer concluded that since the crew members closed the ventilators to prevent a ‘peril of the sea’, the loss would be attributed to the ‘perils of the sea’.


The Insurer settled the claim.

To Conclude

The perils of the sea are many and varied, from storms and huge waves to dangerous icebergs deceivingly floating slightly above the surface. For centuries, sailors have risked their lives to explore the world’s oceans, and many have met their end in these treacherous waters.

Today, with modern technology and safety equipment, we have a much better understanding of the dangers at sea. However, even with all of this knowledge, the perils of the sea remain a real and present danger for anyone who ventures out onto the water.

If you’re considering a sailing adventure, be sure to educate yourself on the perils of the sea and how to protect yourself with the appropriate Marine Insurance policy.

You may consult with ICICI Lombard, one of the leading Insurance companies in India, for all your insurance needs.

  • 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). (Workman Compensation, 4010 , IRDAN115P0010V01200607)