On 20th May 2021, a cargo ship named X-Press Pearl caught fire off the coast of Colombo, Sri Lanka. It was carrying a consignment of chemicals and raw materials for cosmetics from Gujarat to Colombo.
Deemed Sri Lanka’s Worst Marine Ecological Disaster, this accident caused large quantities of fuel and hazardous nitric acid to be released into the ocean which led to the death of over 130 marine animals.
In December 2021, the ship’s Singapore-based operators decided to remove the wreckage of the ship from the ocean floor along with any debris and pollutants around it.
But no amount of salvaging will bring back the lost cargo.
For this reason, traders, contractors and shipping companies purchase a Marine Cargo Insurance policy to cover their losses in the event of unexpected maritime disasters.
Marine Cargo Insurance covers loss or damage to the insured merchandise while it is in transit by sea, rail, air, or even road. Through this policy, a ship’s cargo can be protected against risks like :
- Fire, explosion, lightning
- Capsizing, sinking, or grounding of the ship,
- Collisions, washing overboard, and jettisoning
- Piracy, or deliberate damage
- Water damage, theft, pilferage, and much more.
This kind of insurance is often necessary for exporters and importers to purchase and is integral to a seller’s agreement.
What’s more, any damage to the physical body of the ship can also be covered with the help of another insurance policy known as Marine Hull and Machinery Insurance. This policy covers loss or damage to the body of the insured vessel and the equipment attached to it.
While Marine Insurance may have helped cover the financial losses of the X-Press Pearl disaster, no such policy can help the ship operators with the serious legal action taken against them.
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