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Why is marine insurance important in international trade?

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Answered 2012-05-06 02:09:36

Firstly, transporting commodities from one country to another over seas and oceans poses the consequent risks such as dakoits or damage. So, there's a need to insure both the vessels and the cargo to keep the sense of safety to do business favourably.

Secondly, we have many ways to do this insurance, but each has its disadvantages. One way is to avoid the risks, it means you do not do anything and so, do not gain anything. The second one is to prevent the risks by using precaution and damage reducing methods, this way also cannot stop accidental risks. The third way, you insure yourself (risk assumption) by save an amount of money to compensate for the loss if it happens, but not everyone have enough money.

Another way is to get the insure by an organization specializing in insuring so that by doing many cases of same business, they have enough money to compensate for your property loss. This organization is a marine insurance company. By marine insurance, businessmen can do their business favorably but not have to worry about the risks.

Therefore, marine insurance is the main objective demand of people offshore.

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