In relation to marine insurance:
i) Define the term “marine insurance”.
ii) Outline any four types of marine insurance policies.
Marine insurance is insurance that covers the loss or damage of ships, cargo, terminals, and any transport or cargo which property is transferred, acquired, or held between the points of origin and final destination.
ii) Four types of marine insurance policies.
The major types of marine insurance policies are:
- Time policy
A time policy is taken for definite period of time, usually not exceeding 12 months say from January 1, 1981 to December 31, 1981. This policy is most suitable for hull insurance.
- Voyage policy
Where the subject matter is insured for a specific voyage.
- Mixed policy
This policy is the combination of time and voyage policy. It, therefore, covers the risks for both particular voyage and for a stated period of time.
- Floating policy
Floating policy is taken for a relatively large sum the regular suppliers of goods. It covers several shipments which are declared afterwards along with other particulars. This policy is most situated to exporter in order to avoid trouble of taking out a separate policy for every shipment.
- Valued policy
Under its terms the agreed value of the subject matter of insurance is mentioned in the policy itself. In case of cargo this value means the cost of goods plus freight and shipping charges plus 10% to 15% margin for anticipated profit. The said value may be more than the actual value of goods.