AS | Ankit Sarawagi|Founder, CFOmatrix·August 2026·9 min read | Business Insurance |
Your inventory is worth the most at the exact moment you have the least control over it: sitting on a truck, in a container, or on a pallet at a courier hub. That is the gap marine and transit insurance is built to close.
Marine insurance, and the inland version usually called transit insurance, covers your goods while they are in movement, from dispatch to delivery. Despite the name it is not only for ships: it covers road and rail transit inside India, as well as imports and exports. For any startup that moves physical stock, it is often the cheapest cover to buy and the one buyers and logistics contracts most often insist on. This guide explains what it protects, specific versus open (annual) cover, who needs it, the ICC A/B/C clauses, and how a claim actually works.
- What it covers
- Physical loss or damage to goods in movement, from the point of dispatch to the point of delivery.
- Where
- Inland transit by road and rail, plus imports and exports by sea and air.
- Two ways to buy
- Specific policy (one shipment) or open cover (all shipments for a year).
- Who needs it
- D2C, e-commerce, manufacturers, importers and exporters moving stock of real value.
- Often required by
- Buyers and logistics or INCOTERMS contracts, not by investors.
1 What marine and transit insurance covers
Marine insurance covers physical loss of or damage to your goods while they are being transported. The word “marine” is historical: the same family of policies covers inland transit by road and rail within India, air cargo, and sea shipments, so a purely domestic D2C brand that never touches a port still buys under this heading, often called a transit or marine (inland) policy.
The cover responds to physical loss or damage in transit from causes such as:
- Road or rail accident, overturning or collision of the carrying vehicle.
- Fire and explosion during the journey.
- Theft, pilferage and non-delivery of the whole consignment or part of it.
- Breakage, denting and crushing of fragile goods.
- Water damage, including rain, sea water and flooding, on the wider clauses.
- Loading and unloading damage, and marine perils such as sinking or jettison on sea legs.
Cover runs on a warehouse-to-warehouse basis: it typically starts when the goods leave your premises and continues until they reach the consignee’s premises, including the ordinary road legs at each end. What it does not cover is ordinary leakage or loss in weight, inherent vice (goods that spoil by their own nature), poor packing, and deliberate acts, so packaging and documentation matter.
2 Specific vs open (annual) cover
There are two ways to buy this cover, and picking the right one is mostly about how often you ship.
| Type | How it works, and who it suits |
|---|---|
| Specific policy | Covers one named shipment for a single journey, bought each time you send goods. Suits occasional, one-off or unusually high-value consignments. The risk is that a busy team forgets to buy it, and that shipment travels uninsured. |
| Open policy (open cover / annual turnover) | Covers all your shipments over a year, up to an agreed per-sending limit and an overall annual turnover. You declare dispatches periodically instead of buying a fresh policy each time. Cheaper per shipment and nothing ships uninsured by mistake, so regular shippers almost always use this. |
For most startups that ship continuously, an open policy is the sensible default. You agree two numbers with the insurer: the maximum value on any single sending (so a large consignment is not left partly uncovered) and the estimated annual turnover in transit. You then declare your dispatches, and the premium adjusts to actual volume.
3 Who needs it, and who asks for it
The simple test is whether you move physical goods whose value you could not comfortably absorb if a truck were lost. In practice that is most product businesses:
- D2C and e-commerce brands moving inventory from factory to warehouse, between fulfilment centres, and out to customers.
- Manufacturers moving raw material inwards and finished goods outwards.
- Importers and exporters whose cargo crosses ports and airports and spends days in transit.
Just as important is who asks for it. Unlike D&O, which investors mandate, marine and transit cover is usually driven by customers and contracts. Two situations come up again and again:
- Buyers require proof of cover. Large retail or enterprise buyers, and marketplaces, often ask a supplier to insure goods in transit so a damaged consignment does not become a dispute.
- Logistics and INCOTERMS contracts require it. In export and import trade, the agreed INCOTERMS decide who insures the goods and up to what point. Under CIF and CIP the seller must arrange cargo insurance for the buyer; under other terms the risk, and the duty to insure, may sit with you for part of the journey. Read the term before you assume someone else is covering the cargo.
4 ICC A, B and C clauses
For import and export cargo, the level of cover is usually set by one of the Institute Cargo Clauses (ICC), a standard international wording. Think of them as three widths of cover, from broadest to most basic.
| Clause | What it covers |
|---|---|
| ICC (A) | The widest, an all-risks cover for physical loss or damage from any external cause, except the stated exclusions. The usual choice for fragile or high-value goods. |
| ICC (B) | Narrower: named perils such as fire, sinking, collision and derailment, plus water damage including sea water and river water entering the hold or container. |
| ICC (C) | The most basic: only major casualties such as fire, explosion, vessel sinking or stranding, and collision. It excludes most handling damage and water damage. |
Wider cover costs more, so the clause is matched to the cargo. Delicate, high-value or easily damaged goods point to ICC (A); rugged bulk goods with a low damage risk might sit on ICC (B) or (C). For inland road and rail movements within India, insurers use their own inland transit wordings that work on the same idea of wider versus basic cover.
5 How a claim works
A marine or transit claim is document-driven. Handle the first few hours well and the rest is largely paperwork.
Brewly Pvt Ltd, a D2C coffee brand, moves roasted coffee and glass cold-brew bottles from its Bengaluru roastery to fulfilment centres in Delhi and Mumbai. It ships several lorry-loads a week, so instead of buying a policy per truck it takes an open (annual) transit policy: a per-sending limit of ₹8 lakh (its largest single dispatch) and an estimated annual transit turnover of ₹2.5 crore. Every dispatch is now covered automatically, and Brewly simply declares volumes to the insurer.
One lorry carrying about ₹6 lakh of stock overturns near Nagpur; the glass bottles shatter and cartons are water-damaged. Brewly’s ops lead notes the damage on the lorry receipt, photographs the load, and informs the broker the same day. A surveyor assesses the loss, Brewly lodges a claim on the transporter to protect recovery, and files with the insurer using the invoice, packing list and lorry receipt. The claim settles on the insured value, and the insurer separately pursues the transporter. Without the policy, Brewly would have carried the full loss and been left arguing with a carrier whose liability was capped far below ₹6 lakh.
6 Your marine & transit checklist
- List where your goods move: inbound, between locations, outbound to customers, and any imports or exports.
- Estimate your largest single consignment value and your annual transit turnover.
- Choose open cover if you ship regularly, or a specific policy for occasional or one-off consignments.
- Set the per-sending limit to your largest realistic dispatch, not the average.
- Match the clause to the cargo: ICC (A) for fragile or high-value, a basic clause for rugged goods.
- Check your buyer and logistics contracts, and the INCOTERMS, for who must insure and up to what point.
- Pack for the transit, since poor packing is an exclusion on every clause.
- Fix a claims drill: note damage on the POD, photograph, inform the broker, and keep every shipping document.
- Buy through an IRDAI-registered broker, and keep the policy and declarations filed for diligence.
Not sure which covers your startup actually needs?
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Startup Insurance Need Checker (free tool) →
AS | Founder, CFOmatrix | Finance Strategy & Compliance CFOmatrix helps Indian startups build finance, tax and compliance functions that stand up to investor due diligence, from process and controls to the filings and the numbers behind them. |
Disclaimer: This article is general information as of August 2026 and is not insurance advice. Cover, exclusions, limits and pricing vary by insurer and policy wording, and any amounts mentioned are indicative only, not a quote or a guarantee of cover. Confirm your specific requirements with an IRDAI-registered insurance broker before buying any policy.