Marine Insurance operates based on...

Marine insurance operates based on the concept of open peril coverage. This means that the policy covers all losses except for those specifically excluded in the policy documents. Open peril insurance provides a broader scope of protection than named peril policies, which only cover specific risks that are listed in the policy.

In the context of marine insurance, which includes coverage for ships, cargo, and freight, the open peril approach is particularly relevant given the various and unpredictable risks associated with maritime activities. The open peril nature of these policies allows for comprehensive protection against a wide range of potential hazards that can occur at sea, such as theft, shipwreck, or damage due to weather conditions, unless these risks are explicitly stated as exclusions. This is crucial in the marine sector, where unforeseen events can lead to significant losses.

Understanding that marine insurance operates with an open peril framework emphasizes the need for policyholders to be aware of their coverage limits and exclusions, ensuring they have adequate protection while engaging in transportation and trade via waterways.