Procedure for taking Marine Insurance Policy :
The following steps are involved in taking a Marine Insurance Policy:
Submission of form
Quotation from the Insurance Company
Payment of Premium
Issue of cover note/Policy
A. Submission of form -
The form will have the following information:
a. Name of the shipper or consignor (the insured).
b. Full description of goods to be insured: The nature of the commodity to be insured is important for rating and underwriting. Different types of commodities are susceptible for different types of damage during transit- sugar, cement, etc are easily damaged by seawater; cotton is liable to catch fire; liquid cargoes are susceptible to the risk of leakage and crockery, glassware to breakage; electronic items are exposed to the risk of theft, and so on.
c. Method and type of packing: The possibility of loss or damage depends on this factor. Generally, goods are packed in bales or bags, cases or bundles, crates, drums or barrels, loose packing, paper or cardboard cartons, or in bulk etc.
d. Voyage and Mode of Transit: Information will be required on the following points :
- the name of the place from where transit will commence and the name of the place where it is to terminate
- mode of conveyance to be used in transporting goods, (i.e.) whether by rail, lorry, air, etc., or a combination of two or more of these. The name of the vessel is to be given when an overseas voyage is involved. In land transit by rail, lorry or air, the number of the consignment note and the date thereof should be furnished. The postal receipt number and date thereof is required in case of goods sent by registered post
- If a voyage is likely to involve a trans-shipment it enhances the risk. This fact should be informed while seeking insurance. Trans-shipment means the change of carrier during the voyage.
e. Risk Cover required: The risks against which insurance cover is required should be stated. The details of risks are discussed subsequently in this chapter.
B. Quotation by insurance company :
Based on the information provided as above, the insurance company will quote the premium rate. In nutshell, the rates of premium depend upon:
- Nature of commodity
- Method of packing
- The Vessel
- Type of insurance policy
C. Payment of premium :
On accepting the premium rates, the concerned person will make the payment to the insurance company. The payment can be made on the consignment basis.
D. Issue of cover note /Policy document :
a. Cover Note : A cover note is a document granting cover provisionally pending the issue of a regular policy. It happens frequently that all the details required for the purpose of issuing a policy are not available. For instance, the name of the steamer, the number and date of the railway receipt, the number of packages involved in transit, etc., may not be known.
b. Marine Policy : This is a document which is an evidence of the contract of marine insurance. It contains the individual details such as name of the insured, details of goods etc. These have been identified earlier. The policy makes specific reference to the risks covered.
