Types of Marine Insurance Policy?


Meaning: -Marine Insurance gives protection against losses caused due to the dangers of the sea. Marine Insurance is very useful for foreign trade i.e. for exporters and importers. It has become mandatory for exporters and importers to insure their goods. It also covers the loss or damage to the passengers in cruise during journey on the sea. Marine Insurance covers the dangers of the sea such as sinking of the ship, storm, fire, explosion in the ship, crashing with icebergs, pirates, etc.

Definition: - according to Marine Insurance Act, 1963 "An agreement whereby the insurer undertakes to indemnity the assured, in the manner and to the extent thereby agreed, against losses incidental to marine adventure. It may cover loss or damage to vessels, cargo or freight."

Types of Marine Insurance Policies:

1.       Voyage Policy: - It is a policy in which the subject matter is insured for a particular voyage irrespective of the time involved in it. In this case, the risk begins only when the ship starts on voyage. E.g. voyage from Mumbai to New York.

2.       Time Policy: -Time policy is one in which subject matter is insured for a definite period of time against the perils/dangers at sea. A time policy cannot be for a period exceeding one year, but it may contain continuation clause. The continuation clause means that if the voyage is not completed within the specified time, the risk shall be covered until the voyage is completed or till the arrival of the ship at the port.

3.       Mixed Policy: -This Policy is the combination of time and voyage policy. It therefore, covers the risk for both, particular voyage and for a specified period of time. E.g. A policy can be taken from Mumbai to New York for 40 days voyage starting from 1st February 2012.

4.       Valued Policy: -Under this policy, goods are insured for an agreed value between the insurer and insured. This is applicable, when it becomes difficult for the insurer to assess the value of the goods. In case of cargo this value means the cost of goods plus freight and shipping chargers plus 10% to 15% margin for anticipated profits. This agreed value is more than the actual value of goods.

5.       Floating Policy: -Floating Policy is taken for a large sum covering several shipments. This policy is mostly taken by exporters in order to avoid trouble of taking out a separate policy for every shipment. This policy covers several shipments till the amount insured is exhausted.

6.       Blanket Policy: -Under blanket policy, the maximum limit of the required amount of protection is estimated which is purchased in lump sum. The amount of premium is usually paid in advance. This policy describes the nature of goods insured, specific route, ports and places of voyages and covers all the risks accordingly.

7.       Port Risk Policy:- Port risk policy covers all the risks of a vessel while it is anchored at the port for a particular period of time. This policy is applicable till the departure of the vessel from the port.

8.       Composite Policy: -This type of policy is purchased from more than one insurer. The liability of each insurer is separate and distinct. This policy is taken when the amount of insurance is very high.

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