The Government of India on Tuesday launched the $1.5-billion Bharat Maritime Insurance Pool, supported by a $1.4-billion sovereign guarantee (Rs 12,980 crore), to provide risk coverage for Indian vessels operating on international routes, including war zones. This initiative is expected to reduce shipping insurance premiums and ensure continuous coverage even when global insurers withdraw due to escalating risks.
Cabinet Approval and Background
The pool was approved by the Union Cabinet last month following a sharp increase in reinsurance premiums triggered by the West Asia conflict. The move aims to address the volatility in the global insurance market and protect Indian maritime interests.
Claim Settlement Mechanism
Financial Services Secretary M Nagaraju explained the claim process: "For claims up to $100 million, the pool will service the claim using its own capacity. Beyond that, the sovereign guarantee will be invoked as a last-resort backstop to pay claims." This structure ensures that the pool can handle large-scale risks without immediate government intervention.
Coverage Scope
The pool covers all vessels flagged in India or controlled by Indian entities, as well as those bound for or departing from Indian ports carrying Indian cargo. It encompasses a wide range of maritime risks, including:
- Hull and machinery
- Cargo
- Protection and indemnity
- War risk
This comprehensive coverage is designed to strengthen India's maritime sector and reduce dependence on foreign insurers, particularly in high-risk areas.
