DIFFERENT TYPES OF MARINE

POLICIES
1) Specific Policy
2) Floating or Open Policy
3) Open cover
4) Special Declaration Policy
5) Annual Policy
6) Multi Transit Policy
7) Sellers Contingency Policy
8) Buyers Contingency Policy
9) Duty Policy
10)Increased Value Insurance Policy.
11)Tea Crop Policy
12)Sales Turn over Policy.

SPECIFIC POLICY
The specific Policy covers a particular consignment for
a specific voyage/transit against an individual proposal
submitted by the client. The complete details like
commodity, vessel particulars, B/L or R/R or AWB
number and date, sum insured, details of voyage,
terms of cover must be declared while effecting the
Insurance.
As per Marine Insurance Act, a policy must contain the
following particulars :
The name of the assured
The subject matter of insurance & risk insured against
The voyage
The sum or sums insured
The name of the insurer

FLOATING OR OPEN POLICY

Sec. 31 of the Marine Insurance Act, states that 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
Sec. 31(2) of Marine Insurance Act. 1963 states that the
subsequent declaration or declarations may be made by
endorsement on the policy, or in other customary manner.
An Open Policy is issued to clients having substantial turnover
with large number of dispatches through out the year.
An Open Policy is issued, duly stamped, on estimated annual
turnover declared by the assured against advance payment of
premium.
Under such policy the underwriters will accept all shipments
coming within the scope of the insurance contract without any
exception.
The basis of valuation under Open Policy shall be Invoice
value of the goods + freight + insurance + up to 10% incidental
expenses (Optional).

Open Cover
An Open Cover is issued for a particular period usually for one year
whereby the Insurer agrees to cover insurance of all shipments by sea/
Air from any port to any port.
Like an Open Policy, the Insured is bound to declare all shipments /
dispatches without any exception during the period of insurance.
The Open Cover is an unstamped documents but separate policies to be
issued against each & every dispatch.
The Policies issued under Open Cover shall be duly stamped and signed.
It is to be noted that when Certificate of Insurance and/or policy shall be
issued under the Open Cover against each & every dispatches ,all
terms, conditions warranties and excess as mentioned in the Open
Cover shall also be written in the Certificate of insurance / policies.

ANNUAL POLICY
The Annual Policy is issued only i.r.o.
goods belonging to the assured or held
in trust by him not under any sale or
purchase while in transit by road or rail
from specified depots/ processing
centre to other depots / processing
centre. The depots must be owned or
hired by the assured but the
processing units may not be owned or
hired by the Insured.
Contd. .

ANNUAL POLICY
The acceptance of the proposal is subject to the
following information :
a) The particulars of transit;
b) The total distance involved from one depot to
another depot and/or processing centre;
c) Description of the goods;
d) Estimated annual turn over;
e) Single carrying limit at any one time;
The minimum rate of premium is 30 times of the
chargeable rate.
The minimum premium for the Policy is Rs. 5000/- only.
The Policy shall be subject to Reinstatement clause and
condition of average.

MULTI TRANSIT POLICY

The Marine Policy generally covers goods during ordinary
course of transit from Warehouse to Warehouse.
Risk during storage at intermediate points shall be considered
as a separate non-marine risk.
To effect a continuous cover whilst in transit or in storage or
during processing of the goods, marine transit policy can be
extended to cover multi transit
risks and intermediate
storage cover if the consignment is stored in covered godowns.
The maximum storage period shall be mentioned in the
policy at all godowns put together. It would be in order to
grant cover against fire and allied perils and burglary risks
during the period of storage.

SALES TURNOVER POLICY (STOP)

Turnover constitutes :
All Incoming Raw Material Domestic Purchase/

Imports.
All Outgoing finished goods Domestic Sales/

Exports.
Inter Depot transfer of Material / Semi finished

goods for
job work.
Can include stores, spares and consumables in a

ADVANTAGES OF TURNOVER OVER POLICY

No transit wise declarations to be given;
All transits automatically covered incl. inter sales

depot
transits and imports though premium paid only
on sale of
final product;
Fixed rate covering all ports/ countries except

those
specifically excluded.

BROKER DRIVEN
These Policies are generally Broker Driven.
Hence, Demands come for :
Turnover declared for lower value than expiring
turnover;
Facility to increase Sum Insured at frequent intervals;
Installment premium facility in contravention of Rule
59 of Insurance Rules 1939.
Intermediate Storage for 365 days.
Undeclared storage areas.
Debris removal Clause
50-50 clause
Freight forwarding expenses
PLL several times PML
Buyers/ Sellers contingency
Concealed Damage Clause
Brokers seek advantages of Open Policy & Fire Policy under this Policy at rates
of Open Policy.

BASIS OF VALUATION
Basis of valuation should be specifically
mentioned as under :
Imports : Delivered Cost at final destination
including
duties and taxes incurred.
Exports : Invoice value including freight,
duties and
taxes incurred.
Inter Depot transfers : Value as per challan
including
freight paid.
If the basis of valuation is CIF + 10% the
premium

Warranties
Additional Premium for loading and unloading.
Excluding Overloading of Registered / Licensed

carrying capacity of the vehicle.

In case of concealed damage clause the period of
cover
should be restricted to maximum of 30 days.
Temporary storage not more than twice the normal
storage period.
Warranted adequate packing to withstand the
intended journey.
Appropriate clauses to be incorporated based on the
risk underwritten.
PLL should be twice of PBL limit.

SELLERS CONTINGENCY POLICY

Sellers Contingency shall be issued to the Exporters who

export the consignment under FOB or C & F terms and not

under confirmed L/C.
The Cover under Sellers Contingency will commence after

the consignment is safely placed on board the vessel and shall

continue until the Buyer accepts the goods and relative
documents.
The Insurance is issued to protect the Sellers interest due to

non payment of the invoice value.

The Policy is not assignable.
The Policy cannot be extended beyond the Port of Discharge.
Contd.

SELLERS CONTINGENCY POLICY

The

Sale Contract cannot be altered

subsequent to the operation of the Insured
Peril.
The Policy covers only physical loss or

damage to the goods by Insured Peril.

The Claim under the Policy shall only be

admitted if the subject loss is not covered

under Buyers Policy.
The Claim shall be settled in Indian rupee.

BUYERS CONTINGENCY
POLICY
The Insurance covers Buyers interest only in

respect of purchases under FOB or FAS or C & F

terms.
The Liability of the Insurers herein will commence
from the time of consignment leaves the Suppliers
factory / Warehouse/ Store.
The Insurance is not assignable except Bank
operating in India.
Warranted this insurance not to be deemed as
Double Insurance.
Warranted that the Insured shall safe guard
rights of recovery against carrier.
Claim shall be settled in INR.

DUTY POLICY
Duty Policy is issued to the Importer who has valid Import

Licence.
The Policy is issued

on Provisional Duty Value but

subsequently adjusted on actual assessed duty.
The Policy shall be one of pure indemnity.
The claim under Duty Policy is not admitted if loss is

detected prior to Custom Clearance.

The Policy is not freely assignable.
The Duty Claim, if any, shall be admissible if Cargo Claim is

admitted.