India is among the world’s top trading nations, with exports crossing $770 billion in 2024. Every day, millions of tonnes of goods are transported by sea, air, road, and rail. Yet, marine insurance—which covers losses and damages during transit—remains surprisingly undersold.
In 2025, despite digital platforms and IRDAI’s push, marine insurance penetration in India is still below 20% of total cargo movement. Let’s explore why this vital protection hasn’t yet reached its full potential.
What Is Marine Insurance?
Marine insurance protects against risks to goods in transit, including:
- Fire, explosion, or accidents during shipment.
- Theft, pilferage, or non-delivery.
- Natural disasters like storms, floods, or cyclones.
- Port accidents or container damage.
👉 Example: An exporter shipping textiles from Mumbai to Dubai faces cargo damage due to rough seas. Marine insurance compensates for the loss.
Why Marine Insurance Is Undersold in India
1. Lack of Awareness Among SMEs
- Small traders often believe “nothing will happen” and avoid insurance.
- Many don’t know premiums are as low as 0.1–0.2% of cargo value.
2. Dependence on Freight Forwarders
- Exporters/importers assume logistics providers insure goods.
- In reality, freight liability is limited and does not cover full losses.
3. Complex Policy Jargon
- Policies include terms like “Institute Cargo Clauses (A/B/C)” which confuse small business owners.
4. Focus on Cost-Cutting
- Traders prioritize low freight costs, ignoring risk transfer.
- Many only consider insurance after suffering losses.
5. Limited Digital Push (Until Recently)
- Marine insurance sales remained offline and paperwork-heavy.
- Digital platforms are only now simplifying instant policy issuance.
IRDAI & Industry Push in 2025
- Digital Marine Policies: Now available on insurer apps within minutes.
- Awareness Drives: Export promotion councils educating SMEs.
- Bundled Products: Banks offering marine cover with export financing.
- Faster Claims: IRDAI circulars mandate 15-day settlement for small claims.
Who Should Definitely Buy Marine Insurance?
- Exporters & Importers: For all international cargo.
- E-commerce Sellers: Shipping goods via couriers to global markets.
- Logistics & Transport Companies: Protecting themselves and clients.
- SMEs in Agriculture, Textile, Pharma: High-value goods prone to damage.
Case Study: Undersold Insurance Costs Crores
In 2024, an SME exporter from Surat lost a ₹2 crore shipment of garments in a fire at a Middle East port. With no marine cover, the entire loss was borne by the company, forcing closure.
By contrast, a Chennai-based pharma exporter with marine insurance recovered losses within 20 days and resumed business.
Why This Matters
India’s export growth depends not just on production but also on safe delivery. Without marine insurance, businesses face catastrophic risks.
In 2025, IRDAI’s reforms and digital platforms are making marine insurance easier to access—but adoption still depends on awareness.
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