The government has approved a Bharat Marine Insurance Pool with a sovereign guarantee fund worth Rs 12,980 crore to support marine insurance amid the turmoil caused by the conflict in the Middle East, Union Minister Ashwini Vaishnao announced on Saturday.The program aims to address rising insurance premiums and more stringent approvals for freight cover, which are currently granted on a case-by-case basis.
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The pool will cover key marine risks including ship hulls, machinery, cargo, protection and compensation (P&I) and war risks.Coverage will apply to ships flying the Indian flag, ships controlled by India, and ships with India as the origin or destination.The proposed framework will last for 10 years, with the possibility of an extension of up to 15 years.The proposed Bharat Marine Insurance Park is expected to ensure uninterrupted insurance coverage for Indian shipping while reducing dependence on foreign insurance companies. According to details provided by the government, the mechanism will also help facilitate mutual insurance coverage from other non-IG clubs. Another stated benefit is lower foreign exchange through reduced spending on insurance premiums abroad.