There are a number of marine insurance policies to cover varied risks. The important policies are discussed below:
1. Voyage Policy
IT covers the risk from the port of departure upto the port of destination. The policy ends when the ship reaches the port of arrival. This type of policy is purchased generally for cargo. The risk coverage starts when the ship leaves the port of departure.
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2. Time Policy
This policy is issued for a particular period. All the marine perils during that period are insured. This type of policy is suitable for full insurance. The ship is insured for a fixed period irrespective of voyages. The policy is generally issued for one year. 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.
3. 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 polices are issued to ships operating on a particular route.
4. 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.
5. 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.
6. Floating Policy
When a person ships goods regularly in a particular geographical area, he will have to purchase a marine policy every time. It involves a lot of time and formalities. He purchases a policy for a lump sum amount without mentioning the value of goods and name of the ship etc. When he sends the goods, a declaration is made about the particulars of goods and the name of the ship. The insurer will make an entry in the policy and the amount of policy will be reduced to that extent. This policy is called an open or a floating policy. The declaration by the insured is a must. When the total amount of policy is reduced, it is called ‘fully declared’ or turns off’. The underwriter will inform the insured who will take another policy. The premium is called on the basis of declarations made.
7. 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 dispatch to the point of ultimate arrival. This policy is called a Block Policy.
8. Wager Policy
This is a policy held by a person who does not have any insurable interest in the subject insured. He simply bets or gambles with the underwriter. The policy is not enforced by law. But still underwriters claim under this policy. The wager policy is also called ‘Honor Policy’ or ‘Policies Proof of Interest’.
9. Composite Policy
A policy may be undertaken by more than one underwriter. The obligation of each underwriter is distinctly fixed. This is called a composite policy.
10. 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 ahs an advantage of covering even old hips at an average rate of premium. This policy is generally a time policy.
11. Port Policy
It covers the risks when a ship is anchored in a port.