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Marine Insurance FAQ

 
Business today knows no boundaries. We have an access to products and services across borders as countries continue to globalize. However, the farther our goods travel the more risk they are exposed to. That's why Bajaj Allianz brings to you the Marine Cargo Insurance cover, which compensates losses of goods in transit.
 
What Is The Scope Of Cover ?
What all does Transit Policy Cover?
What Are The Types Of Coverage Offered?
What Is Open Cover?
What Is Duty Policy?
What About Premiums?
What Is Open Policy?
What Is Term Policy?
What Is Special Declaration?
What is the "valuation" or "sum insured?"  
Steps and documents required at time of claim
 
 
What Is The Scope Of Cover?  
The policy covers goods, freight and other interests against loss or damage to goods whilst being transported by:-
By Sea (All ocean voyages and inland water ways.)
Send by post or parcels
By Rail / Road / Air
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What all does Transit Policy Cover?  
It covers transit of goods by Sea (All ocean voyages and inland rail/ road/courier/Registered Post parcels.)
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What Are The Types Of Coverage Offered?  
The following are the type of covers available for all Overseas Transits subject to various Institute Cargo Clauses, the comparison are appended below:-
Risks Institute Cargo Clauses
  A
(All Risk Cover)
B
(Wider Risk Cover)
C
(Basic Risk Cover)
Stranding, Grounding, Sinking or Capsizing YES YES YES
Overturning or Derailment of Land Conveyance YES YES YES
Contact of Ship, Craft or Conveyance with anything other than Ship or Craft (excludes Water but not Ice) YES YES YES
Discharge of Cargo at Port of Distress YES YES YES
Loss over board during Loading / Discharge (total loss only) N/A YES NO
Fire of Explosion YES YES YES
Malicious Damage YES * NO * NO
Theft / Pilferage YES NO NO
General Average Sacrifice YES YES YES
Jettison YES YES YES
Washing Overboard (deck cargo) YES YES NO
War Risks *NO *NO *NO
Seawater entering Ship, Craft, Hold Conveyance Container Lift Van or Place of Storage. YES YES NO
River or Lake Water entering same YES YES NO
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What Is Open Cover?  
It is a memorandum of agreement by which the insured will set out the terms of cover and rates of premium for one-year transaction of Marine Dispatches. The open cover is not a Policy and it is not negotiable. A Certificate of insurance is issued for each declaration duly stamped for appropriate value and the Certificate will be negotiable.
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What Is duty Policy?  
This covers loss of Custom duty paid on the consignment due to loss of cargo. The coverage commences only after discharge of cargo land and the cover is granted for import consignments only.
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What About Premiums?  
This is a Non-Tariff business and insure chares rate depending upon he nature of goods, the mode of transit, type of package, the voyage route and the past claims experience. Inland transit policies can be extended to cover the following perils on payment of additional premium :

i. SRCC - Strike, riot and civil commotion (including terrorist act)
ii. 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.
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What Is Open Policy?  
For covering transit of regular consignments over the same route .The policy can be taken for an amount equivalent to three months dispatches and premium 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.
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What Is Term Policy?  
Annual Policy,
If a business involves regular dispatch of goods throughout the year, and the quantity can be reasonably estimated advance, an annual policy can be obtained on the basis of estimated annual dispatches. Premiums are paid in advance to the Insurance company and premium be adjusted at the end of the year on actual dispatched during the policy period.
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What Is Special Declaration?  
If sum insured is more than Rs.2 crores, a special declaration policy can be taken for which volume discount in premium is considered by the insurance. The annual dispatches should be reasonably estimated and the policy be taken accordingly and adjustment be made at the end of the year. There is savings on account of Stamp duty being paid on specific transit policy.
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What is the "valuation" or "sum insured?"
This is the amount of insurance for which the shipment is to be insured.

1. For International Shipments, this should be equal to the value of the commodity being shipped at: Invoice Cost plus Freight Charges to Destination plus 10%.

2. For Domestic Shipments this should be equal to the actual invoice cost to the insured party together with any additional costs and charges that have been incurred. Pre-sold goods are valued at the amount of the Insured's selling invoice, including prepaid freight.
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Steps and documents required at time of claim:
The following steps should be taken in event of a loss or damage to goods insured :
  1. Take immediate steps to minimize loss.
  2. Inform nearest office of the insurance company or claim settling agent mentioned on the policy.
  3. In case of damage to goods whilst on ship or port, arrange for joint ship survey or port survey.
  4. Lodge monetary claim with carrier within stipulated time period.
  5. Submit duly assigned insurance policy/certificate along with the original invoice and other documents required to substantiate the claim such as :
    1. Bill of Lading / AWB/GR
    2. Packing list
    3. Copies of correspondence exchanged with carriers.
    4. Copy of notice served on carriers along with acknowledgment/receipt.
    5. Shortage/Damage Certificate issued by carriers.
  6. Survey fees is to be paid to the surveyor appointed by the insurance company. This fees will be reimbursed along with the claim if the claim is otherwise admissible.
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