11 KINDS OR TYPES OF MARINE INSURANCE POLICIES

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A marine insurance policy is a policy where the insurance company agrees to insure the insured against losses or damages arising from the transportation of goods by sea.

A marine policy must be signed by or on behalf of the insurer for it to be valid.

There are 11 different kinds or types of marine insurance policy, including port policy, voyage policy, composite policy, fleet policy, valued policy, unvalued policy, floating policy, block policy, time policy, single vessel policy and composite policy.

1. Voyage policy: This is a marine insurance policy where the contract is to insure the subject matter from one location to another.

Simply stated, a voyage policy covers only one voyage (a voyage is a journey by a ship).

So, a voyage policy covers risk from the point of departure to the port of arrival. 

A voyage policy expires when the ship arrives at the port of arrival, and the insured must buy a new policy for the subsequent voyage.

2. Time policy: This is a marine insurance policy where the contract is to insure the subject matter for a set amount of time, typically a year.

After the period, the insured is expected to buy a new policy if he wants to continue enjoying insurance coverage.

One important feature of time policy is that the ship is covered for a particular period, regardless of how many voyages it makes.

3. Mixed policy: This is a combination of both time and voyage policy in that a ship is covered for a specific period and a specific route.

It is an type of marine insurance policy under which the insurance provider protects against loss or damage to the ship for a particular voyage during a specified period.

For example, a ship may be insured from Lagos to Southampton for one year.

So, instead of protecting a ship for only one voyage or only a specific period, a mixed policy protects a ship for a specific voyage and specific period.

4. Valued policy: This is a marine insurance policy where the value of the policy predetermined at the time of purchasing the policy.

In the event of loss to the cargo or consignment, the value of the reimbursement will be paid.

The valued policy ensures that there will be no disagreement over the value of the compensation because it is already determined in advance.

5. Unvalued policy: This is a marine policy where the value of the policy is not decided in advance at the time of purchasing the policy.

The unvalued policy is the opposite of a valued policy. Unvalued policy is also called open policy.

In the event of loss of cargo or consignment, the value of the lost cargo or consignment will have to be measured and ascertained before reimbursement can be made.

6. Floating policy: This is a marine insurance policy where only the claim amount is specified at the time of taking the policy.

Other information is withheld until after the ship sets off on a voyage.

The floating policy covers multiple shipments, which are declared later, along with relevant information.

Floating policy is best suited for exporters who frequently transport cargo through water because because it save them the headache of needing to get a separate policy for each shipment.

7. Block policy: This is a very broad insurance policy that protects the cargo owner against damage or loss of cargo in all modes of transportation.

In essence, a block policy protects the insured against any monetary losses that may arise from shipping his cargo by road, rail, and sea.

8. Composite policy: This is a policy that is underwritten by multiple underwriters

Each underwriter will give the insured separate indemnification in the event of a loss if there is no indication of fraud.

9. Port policy: This is an insurance policy taken to protect a ship while it is stationed in the port.

10. Single vessel policy: Just as its name seems to suggest, a single-vessel policy covers only one vessel of the insured.

11. Fleet policy: This is a marine insurance policy where all the ships of the insured are covered under one policy.

A fleet policy allows a shipping company to protect its fleet of ships under one policy.

Because of its nature, most fleet policies are usually time-based, rather than voyage-based, as they only last for a limited period, typically one year.

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