What is Marine Cargo Insurance?
Marine Cargo Insurance is a policy that protects goods in transit against risks such as theft, loss, or damage while being transported via sea, air, or land. It ensures businesses, importers, exporters, and logistics companies are financially safeguarded from unforeseen perils.
In Kenya, Marine Cargo Insurance is regulated by the Insurance Act (Cap 487) and is mandatory for all imports, as per a directive by the Kenya Revenue Authority (KRA) and the Insurance Regulatory Authority (IRA).
Why is Marine Cargo Insurance Important?
- Legal Requirement: All imports to Kenya must be insured by a local insurance company.
- Financial Protection: Prevents losses due to damaged or lost goods during transit.
- Business Continuity: Ensures uninterrupted trade operations.
- Risk Mitigation: Protects goods from marine, air, and inland transit risks.
- Peace of Mind: Ensures compensation in case of accidents or losses.
Types of Marine Cargo Insurance
1. Open Cover Policy
- Suitable for businesses with frequent shipments.
- Covers all shipments within a specified period.
- Eliminates the need to insure each consignment separately.
2. Specific Voyage Policy
- Covers a single shipment from the origin to the destination.
- Ideal for one-time imports or exports.
3. Contingency Insurance
- Protects exporters in case the buyer fails to insure the goods properly.
- Ensures the exporter gets compensation even if the buyer’s insurance is inadequate.
What Does Marine Cargo Insurance Cover?
| Coverage Type |
Description |
| Loss or Damage to Goods |
Covers goods damaged during transit due to accidents, theft, fire, or natural disasters. |
| Theft & Piracy |
Protects against cargo theft, piracy, and hijacking. |
| Sinking or Collision of Vessel |
Covers goods lost due to shipwrecks or collisions. |
| Fire & Explosion |
Covers damage caused by fire or explosions during transit. |
| Weather-related Damage |
Protects goods from damage due to storms, hurricanes, and floods. |
| Loading & Unloading Risks |
Covers damages that occur during loading and unloading. |
Marine Cargo Insurance Exclusions
Marine Cargo Insurance does not cover:
- Willful misconduct or fraud by the insured.
- Inherent defects in the goods (e.g., perishable goods decaying naturally).
- Delay-related losses (e.g., market depreciation due to shipment delays).
- War and nuclear risks, unless specifically covered.
- Inadequate packaging leading to cargo damage.
- Customs confiscation or government intervention.
Cost of Marine Cargo Insurance in Kenya
The cost of Marine Cargo Insurance is determined by:
- Nature of Goods – Fragile and high-value goods attract higher premiums.
- Mode of Transport – Airfreight is less risky than sea freight.
- Route & Destination – High-risk regions (e.g., piracy-prone areas) have higher premiums.
- Coverage Type – All-risk policies are more expensive than named-peril policies.
How to Get Marine Cargo Insurance in Kenya
- Choose a Licensed Insurer – Ensure the provider is registered with the Insurance Regulatory Authority (IRA).
- Assess Your Needs – Decide between a one-time policy (Specific Voyage) or continuous cover (Open Policy).
- Provide Shipment Details – Include invoice value, nature of goods, route, and transportation mode.
- Obtain a Quote & Compare – Compare rates from different insurers to get the best deal.
- Purchase & Receive Cover Certificate – Required for customs clearance by the Kenya Revenue Authority (KRA).
Marine Cargo Insurance is essential for businesses engaged in import and export. It ensures compliance with Kenyan laws, provides financial protection, and minimizes risks associated with goods in transit.
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