Articles Junction: Types of Marine Insurance Policies - Importance, Conditions of Marine Insurance policies

Meaning of Marine Insurance

What is Marine Insurance? Define Marine Insurance is given in the diagram below.

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Marine insurance is the oldest form of insurance. It may be called as an origin of insurance business. Marine insurance is a contract of indemnity against the losses of account of perils of sea.

Marine Insurance is a contract between the marine insurance company and the insured or the shippers under which the insurance company undertakes to compensate the losses to the ship, the cargo or the freight due to particular marine peril, during sailing in exchange of a consideration of a certain amount of money (premium).

Definition of Marine Insurance

Definition of Marine Insurance is given in the diagram below.

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According to Marine Insurance Act 1963,

“An agreement whereby the insurer undertakes to indemnify 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

Different Types of Marine Insurance are given in the diagram below.

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Importance of Marine Insurance Policies are given below.

Voyage Policy
Time Policy
Mixed or Time and Voyage Policy
Valued Policy
Floating Policy
Blanket Policy
Port Risk Policy
Composite Policy

Principles, Conditions of Marine Insurance are follows:

1. Voyage Policy

What is Voyage Policy? Meaning of Voyage Policy are given in the diagram below.

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In marine insurance, specific voyage policy is an important policy. Under this scheme, the risk is covered for a particular voyage (transit) only. The insurance company undertakes to pay compensation for the loss occurred during that stated voyage. The voyage may require any period for completion. The insurance contract is for the transit between two ports. It is effective from the starting port, and it is completed on reaching the goods to the destination.

2. Time Policy

What is Time Policy? Meaning of Time Policy are given in the diagram below.

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In marine insurance, time Policy management is an important policy. Under this scheme, the risk is covered for a particular period only. The insurance company undertakes to pay for the loss occurred during the stated period. The goods may be shipped anywhere; the insurer carries the risk for the specified time. The time policy cannot be for more than the twelve-month period.

3. Mixed or Time and Voyage Policy

What is Mixed or Time and Voyage Policy? Meaning of Mixed or Time and Voyage Policy are given in the diagram below.

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In marine insurance, mixed or time and voyage policy is an important policy. Under this scheme, the contract is for a particular time and also for a particular voyage. This policy is a blend of time policy and voyage policy.

4. Valued Policy

What is Valued Policy? Meaning of Valued Policy are given in the diagram below.

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In marine insurance, valued policy is an important policy. Under this scheme, the value of the subject matter is agreed beforehand. The valuation is based on cost, freight, insurance premiums, loading charges, agreed percentage of profits, etc. The value is called “insured value.” This value is entered in the policy.

5. Floating Policy

What is Floating Policy? Meaning of Floating Policy are given in the diagram below.

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In marine insurance, floating policy is an important policy. Under this scheme, the particular ship is not mentioned. A lump-sum premium is paid for taking out such a policy. The insured informs the details about the shipments from time to time. The total round sum is first credited in the books of the insurer in insured's account. This amount is debited from time to time, as and when the insurance policies are taken for different ships. This type of policy is very convenient for the businessman or the shippers which are regularly engaged in voyages (export and import).

6. Blanket Policy

What is Blanket Policy? Meaning of Blanket Policy are given in the diagram below.

In marine insurance, blanket policy is an important policy. Under this policy, the maximum amount of protection which needed is assessed, which are procured in bulk. Under this policy, the maximum amount of protection which needed is assessed, which are procured in bulk. The total amount of the premium is paid in advance. This policy depicts the goods, ports specific routes and the places of the voyages according to this factors risks is covered.

7. Port Risk Policy

What is Port Risk Policy? Meaning of Port Risk Policy are given in the diagram below.

In marine insurance, port risk policy is an important policy. It covers all the risks of a vessel, although it is anchored at the port for an exact period of time. This policy is applicable from the starting point of the port to the departure of the vessel to the port.

8. Composite Policy

What is Composite Policy? Meaning of Composite Policy are given in the diagram below.

In marine insurance, composite policy is an important policy. Such kinds of policies are procured from more than one insurers. The financial obligation of each insurer is different and distinct.