10 Common Myths About Marine Insurance Debunked

Let’s face it—most businesses don’t think twice about marine insurance until a shipment goes missing, gets delayed or worse, sinks in the middle of a storm.

These assumptions can be dangerous in the fast-moving world of trade and logistics. A single mistake in cargo protection can cost lakhs or even crores overnight. What’s worse? Many of these losses stem from myths that continue to float around boardrooms, warehouses, and even among experienced exporters.

Whether you are a seasoned trader or a small-scale seller shipping your goods for the first time, marine insurance is probably more relevant to your business than you think.

In this blog, we will bust the 10 most common myths about marine insurance—the kind that can quietly cost your business big.

Ready to separate fact from fiction? Let’s dive right into this marine myth buster!

Marine Insurance: Not Just for Large Shipping Companies or Exporters/Importers

Marine insurance is not exclusive to giant shipping corporations or multinational exporters. Today, even a small business selling handcrafted goods online, a local manufacturer supplying raw materials across the state or a D2C (Direct-to-Consumer) brand fulfilling orders via courier can benefit from a marine insurance policy.

In fact, many domestic claims in India come from inland transits—goods damaged in a warehouse fire, pilfered during road transport or lost in a train derailment. Regardless of size, if your business moves goods from point A to point B, you need marine cargo insurance coverage.

Here are two real-world examples of domestic claims in India that illustrate how marine insurance supports even small-scale companies:

A. Textile Manufacturer in Surat

A small textile exporter in Surat insured a consignment of sarees being transported to a retailer in Kolkata. During transit, the truck met with an accident due to poor road conditions, leading to significant water damage to the cargo.

Thanks to the marine transit insurance policy, the manufacturer recovered the insured value of the damaged goods. Thus, the inland transit insurance policy helped him avoid a heavy financial loss and fulfil the replacement order quickly.

B. D2C Kitchenware Brand in Bengaluru

A D2C kitchenware brand based in Bengaluru routinely ships ceramic cookware to customers across India. One consignment to a distributor in Hyderabad was partially stolen during an overnight halt.

With marine insurance in place, the company filed a marine insurance claim and recovered the value of the stolen goods. Thus, marine insurance allowed them to replace the inventory without impacting customer deliveries or cash flow.

Marine Insurance Only Covers Losses at Sea

Not true—and here’s where the term “marine” gets a bit misleading.

Marine cargo insurance covers a wide variety of transit modes, not just sea. Think road, rail, air, and even courier services. In India, marine inland transit insurance covers domestic transits, including the “first mile” and “last mile” legs of your delivery route.

For example, if your goods get damaged while being transported by truck from your factory to the port, that’s still covered—if you have chosen the right marine insurance policy.

Also, read: Top 5 Myths About CGL Insurance in the Indian Market

Goods in Transit Are Automatically Covered Under General Business Insurance

Marine insurance myth again!

General business insurance—like property or fire insurance—protects assets within your premises. It may not extend to goods once they are on the move. So, if your delivery van catches fire on the highway or cargo is stolen during transport, your business insurance won’t help.

In contrast, marine cargo insurance specifically covers such in-transit risks, including fire, theft and accidents, ensuring comprehensive protection beyond the premises. Thus, marine cargo insurance bridges this gap by protecting goods in transit. Don’t wait for a logistics disaster to find out you are underinsured.

The Transporter Is Liable for Any Damage or Loss During Shipment

Sounds logical, but unfortunately, not how it works. It’s another marine insurance myth.

Transporters in India typically operate under limited liability. Most consignment notes include disclaimers stating they are not responsible for “acts of God,” theft or damage unless negligence is proven. That’s a legal and logistical headache you don’t want to deal with mid-crisis.

Bottom line:Relying solely on the transporter’s liability is risky. Marine inland transit insurance ensures you are in control, not at the mercy of legal fine print.

Suggested read: 6 Types of Business Insurance Policies

Marine Insurance Claims Rarely Get Settled — It’s Not Worth It

This marine insurance myth scares a lot of businesses. But it’s outdated.

In reality, most genuine marine cargo insurance claims are settled efficiently and fairly, especially when proper documentation is submitted. The key lies in understanding the process, maintaining clean records (like invoices, lorry receipts and packing lists) and choosing the right inland transit insurance provider or advisor.

Insurers today are also going digital, offering quick marine insurance claim filing and tracking tools.

Tip: Work with a knowledgeable insurance advisor or platform such as Onsurity, which can guide you through a marine insurance claim with minimal friction.

Once the Goods Leave Your Warehouse, It’s Out of Your Hands

Not if you have got the right marine cargo insurance coverage.

Marine insurance policies often include “warehouse-to-warehouse” clauses, which means your goods are covered from the moment they leave your facility until they reach the customer’s doorstep. This includes intermediate storage, port handling and even transhipment delays.

But remember—coverage gaps can sneak in if marine inland transit insurance policies are not properly worded. Always confirm with your insurer or advisor whether your inland transit insurance policy covers temporary storage or cross-docking risks.

Recommended read: Business Insurance for Tech Startups

Marine Insurance Is Expensive and Not Worth It for Low-Value Shipments

This is one of the most common (and dangerous) myths.

Marine insurance policy premiums are generally affordable and flexible, especially when compared to potential losses. For example, insuring a ₹1 lakh shipment might cost as little as ₹300–₹500. That’s less than the cost of a nice lunch, but could save you from a major financial hit.

Even low-value shipments can face damage or delays. Don’t gamble your goods on assumptions.

Declaring Full Cargo Value Can Lead to Higher Premiums — Better to Under-Declare

Please, don’t do this!

Under-declaring cargo value may slightly reduce your marine cargo insurance premium, but it comes with a hidden trap called the “average clause.” This clause allows insurers to reduce marine insurance proportionally claim payouts if the declared value is lower than the actual value.

Here’s an example: If your shipment is worth ₹10 lakh, but you declared only ₹5 lakh, and you suffer a loss of ₹2 lakh, your insurer may only pay ₹1 lakh, citing a proportional payout.

This shows that short-term savings are not worth the long-term risk.

Quick read: A Guide to Commercial General Liability Insurance

Marine Insurance Is a One-Size-Fits-All Product

Absolutely not! It’s another marine insurance myth.

Marine inland transit insurance can be highly customisable. You can tailor your marine cargo insurance policy based on:

• Type of goods (perishables, electronics, chemicals)
• Mode of transport (road, rail, sea, air)
• Packaging and storage needs
• Transit duration and routes

SMEs should work with insurers or advisors to draft specific inland transit insurance policies. Even simple tools like risk checklists or transit history can help fine-tune your inland transit insurance coverage.

Remember, smart customisation = better protection at a lower cost.

Marine Insurance Covers Product Liability or Damage After Delivery

Let’s clarify this.

Marine insurance covers only the transit risk, from the point of dispatch to delivery. Once the goods reach the buyer or the destination warehouse, the marine cargo insurance coverage ends.

If your product can cause harm after delivery or breaks down during use, you will need Product Liability Insurance or a Commercial General Liability (CGL) policy.

To stay truly protected, many businesses choose to bundle both covers—marine insurance for transport, and CGL for post-delivery usage.

Also read: Asset Insurance to Safeguard Your Business Investments

Conclusion

Marine insurance is often misunderstood, but that doesn’t make it any less important.

In a world where supply chains are complex and disruptions are common, relying on myths and assumptions can cost your business dearly. The truth is, marine inland transit insurance is accessible, affordable and highly adaptable to your needs—whether you are a small trader or a growing enterprise.

Remember, the right guidance could save you more than just money—it could save your business from disaster. Don’t let myths sink your shipments. Get the right marine cargo insurance and stay protected, every step of the way.

Still unsure? Talk to the widely trusted team of Onsurity today.

At Onsurity, we recognise the distinct challenges Indian businesses encounter in logistics and supply chain operations. Whether you are a manufacturer dispatching goods daily or an SME relying on third-party transporters, our smart, tailored marine insurance solutions—including inland transit insurance cover—are designed to suit your routes, cargo types and business scale.

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