MARINE INSURANCE
POLICY
Goods in transit are subject to risks of loss of goods
arising due to fire on the ship, perils of sea, thefts etc. Marine insurance
protects losses incidental to voyages and in land transportation.
Marine Insurance Policy is one of the most important
document used as collateral security because it protects the interest of all
those who have insurable interest at the time of loss. The exporter is bound to
insure the goods in case of CIF quotation, but he can also insure the goods in
case of FOB contract, at the request of the importer, but the premium payment
will be made by the exporter.
There are different types of policies such as
Specific
Policy: This policy is taken to cover different risks
for a single shipment. For a regular exporter, this policy is not advisable as
he will have to take a separate policy every time the shipment is made, so this
policy is taken when exports are infrequent.
Floating
Policy: This policy is taken to cover all shipments for same
months. There is no time limit, but there is a limit on the value of goods and
once this value is crossed by several shipments, then it has to be renewed.
Open
Policy: This
policy remains in force until cancelled by either party, i.e. insurance company
or the exporter.
Open
Cover Policy: This policy is generally issued for 12 months period,
for all shipments to one or all destinations. The open cover may specify the
maximum value of consignment that may be sent pre ship and if the value
exceeded, the insurance company must be informed by the exporter.
Insurance
Premium: Differs
upon from product to product and a number of other such factors, such as,
distance of voyage, type and condition of packing etc. Premium for air
consignments are lower as compared to consignments by sea.
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