MARINE FAQs
1. What is the scope of Smart Marine Policy?
There are two types coverage available under Marine Portfolio:
All Risks Policy: All Risks physical loss or damage to the subject matter from any external cause except those specifically excluded under the General Exclusion Clause of the Policy.
Named Perils Policy or Basic Policy: The Policy only covers physical loss or damage to the cargo from any external cause against specified perils named in the Policy.
2. What is the different classification of the transportation?
Transportation of goods can be broadly classified into three categories:
- Inland Transport
- Import
- Export
The types of policies issued to cover these transits are:
For Inland Transit
- Specific Policy - For covering a specific single transit
- Open Policy -For covering transit of regular consignments over the same route .The policy can be taken for any calculated amount and premium paid has to be paid in advance. As each consignment is dispatched, a declaration giving details of the dispatch including GR/RR No. is to be sent to the insurer and the sum insured gets reduced by the amount of the declared dispatch. The sum insured can be increased any number of times during the policy period of one year; but care should be taken to ensure that adequate sum insured is available to cover the consignment to be dispatched.
- Open Declaration Policy - For covering inland transit of goods. Premium for the estimated annual turnover [i.e. the estimated value of goods likely to be transported during the year] has to be paid in advance.
- Multi-transit Policy - For covering multiple transits of the same consignment including intermediate storage. For e.g. covering goods from raw material supplier's warehouse to final distributor’s godown of final product.
For Import/Export
- Specific Policy - For covering a specific import/export consignment.
- Open cover - This policy which is issued for a policy period of one year indicates the rates, terms and conditions agreed upon by the insured and insurer to cover the consignments to be imported or exported. A declaration is to be made to the insurance company as and when a consignment is to be sent along with the premium at the agreed rate. The insurance co. will then issue a certificate covering the declared consignment.
- Custom duty cover - This policy covers loss of custom duty paid in case goods arrive in damaged condition. This policy can be taken even if the overseas transit has been covered by an insurance company abroad, but it has to be taken before the goods arrive in India.
3. What are the add on covers available under the policy?
Inland transit policies can be extended to cover the following perils on payment of additional premium :
- SRCC - Strike, riot and civil commotion (including terrorist act)
- FOB - Where the inland transit is required to be extended to cover the goods till they are loaded on board the vessel , this extension can be taken.
Export /Import policies can be extended to cover War and /or SRCC perils on payment of an additional premium.
4. Who can take the Smart Marine policy?
The contract of sale would determine who buys the policy. The most common contracts are :
- FOB (Free on Board)
- C & F (Cost & Freight)
- CIF (Cost, Insurance & Freight)
In FOB and C&F contracts, the buyer is responsible for insurance. Whereas in CIF contracts the seller is responsible for insurance from his own premises to that of the purchaser.
5. Can I cover the incidental cost under the policy?
Yes, addition to the contract value 10/15% is added to take care of incidental cost.
