TYPES OF MARINE INSURANCE POLICIES

 

TYPES OF MARINE INSURANCE POLICIES

 

1. FLOATING POLICY (BY SHIP OR SHIPS) 
    

• A TYPE OF INSURANCE IN WHICH THE VALUE OF THE  GOODS BEING INSURED CANNOT BE CALCULATED EXACTLY, SO THE PAYMENT FOR INSURING THEM CAN BE CHANGED AFTER A PERIOD OF TIME.
• LARGE EXPORTERS MAY OPT FOR AN OPEN POLICY, ALSO KNOWN AS A BLANKET POLICY, INSTEAD OF TAKING INSURANCE SEPARATELY FOR EACH SHIPMENT.
• AN OPEN POLICY IS A ONE-TIME INSURANCE THAT PROVIDES INSURANCE COVER AGAINST ALL SHIPMENTS MADE DURING THE AGREED PERIOD, OFTEN A YEAR.
• THE EXPORTER MAY NEED TO DECLARE PERIODICALLY (SAY, ONCE A MONTH) THE DETAIL OF ALL SHIPMENTS MADE DURING THE PERIOD, TYPE OF GOODS, MODES OF TRANSPORT, DESTINATIONS, ETC.
• A FLOATING POLICY IS A POLICY WHICH DESCRIBES THE INSURANCE IN GENERAL TERMS, AND LEAVES THE NAME OR NAMES OF THE SHIP OR SHIPS AND OTHER PARTICULARS TO BE DEFINED BY SUBSEQUENT DECLARATION.
• THE SUBSEQUENT DECLARATION OR DECLARATIONS MAY BE MADE BY ENDORSEMENT ON THE POLICY, OR IN OTHER CUSTOMARY MANNER.
• UNLESS THE POLICY OTHERWISE PROVIDES, THE DECLARATIONS MUST BE MADE IN THE ORDER OF DISPATCH OR SHIPMENT. THEY MUST, IN THE CASE OF GOODS, INCLUDE ALL CONSIGNMENTS WITHIN THE TERMS OF THE POLICY AND THE VALUE OF THE GOODS OR OTHER PROPERTY MUST BE HONESTLY STATED, BUT AN OMISSION OR ERRONEOUS DECLARATION MAY BE RECTIFIED EVEN AFTER LOSS OR ARRIVAL, PROVIDED THE OMISSION OR DECLARATION WAS MADE IN GOOD FAITH.
• UNLESS THE POLICY OTHERWISE PROVIDES, WHERE A DECLARATION OF VALUE IS NOT MADE UNTIL AFTER NOTICE OF LOSS OR ARRIVAL, THE POLICY MUST BE TREATED AS AN UNVALUED POLICY AS REGARDS THE SUBJECT-MATTER OF THAT DECLARATION.

 

2. VOYAGE POLICY

 

• A VOYAGE POLICY IS MARINE INSURANCE COVERAGE FOR RISKS TO A SHIP'S CARGO DURING A SPECIFIC VOYAGE.
• UNLIKE MOST INSURANCE POLICIES IT IS NOT TIME-BASED BUT EXPIRES WHEN THE SHIP ARRIVES AT ITS DESTINATION.
• IT COVERS ONLY THE CARGO, NOT THE SHIP THAT CARRIES IT.
• A VOYAGE POLICY IS IN EFFECT ONLY WHILE THE SHIP IS AT SEA; ADDITIONAL INSURANCE IS NEEDED TO COVER LOSSES DURING LOADING AND UNLOADING OF CARGO.
• A VOYAGE POLICY COVERS UNFORESEEN RISKS BUT NOT PREVENTABLE RISKS. FOR A VOYAGE POLICY TO BE VALID, THE VESSEL TRANSPORTING THE CARGO MUST BE IN GOOD CONDITION AND CAPABLE OF MAKING THE JOURNEY, AND THE VESSEL'S CREW MUST BE COMPETENT.

 

 

3. TIME POLICY 

• TIME POLICY IN MARINE INSURANCE IS GENERALLY ISSUED FOR A YEAR’S PERIOD.
• THE SHIP IS INSURED FOR A FIXED PERIOD IRRESPECTIVE OF VOYAGES.
• TIME POLICIES MAY SOMETIMES BE ISSUED FOR MORE THAN A YEAR OR THEY MAY BE EXTENDED BEYOND A YEAR TO ENABLE A SHIP TO COMPLETE A VOYAGE.
•  IN INDIA, A TIME POLICY IS NOT ISSUED FOR MORE THAN A YEAR.

 

4. MIXED POLICY

• THIS POLICY IS A MIXTURE OF TIME AND VOYAGE POLICIES.
• A SHIP MAY BE INSURED DURING A PARTICULAR VOYAGE FOR A PERIOD, E.G., A SHIP MAY BE INSURED BETWEEN BOMBAY AND LONDON FOR ONE YEAR. THESE POLICIES ARE ISSUED TO SHIPS OPERATING ON A PARTICULAR ROUTE.

 

5. NAMED POLICY

• NAMED POLICY IS ONE OF THE MOST POPULAR POLICIES IN MARINE INSURANCE POLICY. THE NAME OF THE SHIP IS MENTIONED IN THE INSURANCE DOCUMENT, STATING THE POLICY ISSUED IS IN THE NAME OF THE SHIP.

 

6. PORT RISK POLICY

• IT IS A POLICY TAKEN TO ENSURE THE SAFETY OF THE SHIP WHEN IT IS STATIONED IN A PORT.

 

7. FLEET POLICY

• A POLICY MAY BE TAKEN UP FOR ONE SHIP OR FOR THE WHOLE FLEET.
• IF IT IS TAKEN FOR EACH SHIP, IT IS CALLED A SINGLE VESSEL POLICY.
• WHEN A COMPANY PURCHASES ONE POLICY FOR ALL ITS SHIPS, IT IS CALLED A FLEET POLICY.
• THE INSURED HAS AN ADVANTAGE OF COVERING EVEN OLD SHIPS AT AN AVERAGE RATE OF PREMIUM.
• THIS POLICY IS GENERALLY A TIME POLICY.

 

8. SINGLE VESSEL POLICY

• IN SINGLE VESSEL POLICY ONLY ONE VESSEL IS COVERED UNDER MARINE INSURANCE POLICY.

 

9. BLANKET POLICY

• MARINE INSURANCE BLANKET POLICY, ALSO SOMETIMES REFERRED TO AS MARINE OPEN COVER, IS ONE OF THE MOST COMMON AND COMPREHENSIVE TYPES OF INSURANCE AVAILABLE TO THE INSURED.
• THIS POLICY IS TAKEN TO COVER DAMAGES OR LOSSES WITHIN A SPECIFIC PERIOD.

 

10. BLOCK POLICY

• SOMETIMES A POLICY IS ISSUED TO COVER BOTH LAND AND SEA RISKS.
• IF THE GOODS ARE SENT BY RAIL OR BY TRUCK TO THE DEPARTURE, THEN IT WILL INVOLVE RISK ON LAND ALSO.
• ONE SINGLE POLICY CAN BE ISSUED TO COVER RISKS FROM THE POINT OF DESPATCH TO THE POINT OF ULTIMATE ARRIVAL.
• THIS POLICY IS CALLED A BLOCK POLICY.

 

11. VALUED POLICY 
    
    

• UNDER THIS POLICY THE VALUE OF THE POLICY IS DECIDED AT THE TIME OF CONTRACT.
• THE VALUE IS WRITTEN ON THE FACE OF THE POLICY.
• IN CASE OF LOSS, THE AGREED AMOUNT WILL BE PAID.
• THERE IS NO DISPUTE LATER ON FOR DETERMINING THE VALUE OF COMPENSATION.
• THE VALUE OF GOODS INCLUDES COST, FREIGHT, INSURANCE CHARGES, SOME MARGIN OF PROFIT AND OTHER INCIDENTAL EXPENSES.
• THE SHIPS ARE INSURED IN THIS MANNER.

 

12. UNVALUED POLICY

• WHEN THE VALUE OF INSURANCE POLICY IS NOT DECIDED AT THE TIME OF TAKING UP A POLICY, IT IS CALLED UNVALUED POLICY.
• THE AMOUNT OF LOSS IS ASCERTAINED WHEN A LOSS OCCURS.
• AT THE TIME OF LOSS OR DAMAGE THE VALUE OF THE SUBJECT-MATTER IS DETERMINED.
• IN FINDING OUT THE VALUE OF GOODS, FREIGHT, INSURANCE CHARGES AND SOME MARGIN OF PROFIT IS ALLOWED TO THE POLICY IN COMMON USE.