Page 300 - DMGT303_BANKING_AND_INSURANCE

Unit 14: Marine and Motor Insurance

14.4 Kinds of Marine Insurance Policies Notes

Though commonly in one form, marine policies are known by different names according to
their manner of execution and the nature of risks covered. The following are the various kinds
of marine insurance policies as contained in the Marine Insurance Act 1963.
1. Voyage Policy: As the name suggests this policy covers a voyage. This is a policy in which
the limits of the risks are determined by place of particular voyage. For example, Madras
to Singapore; Madras to London. Such policies are always used for goods insurance,
sometimes for freight insurance, but only rarely nowadays for hull insurance.
2. Time Policy: This policy is designed to give cover for some specified period of time, say,
for example 1st Jan, 2003 to noon, 1st Jan, 2004. Time policies are usual in the case of hull
insurance, though there may be cases where an owner prefers to insure his vessel for each
separate voyage under voyage policy.
3. Voyage and Time Policy or Mixed Policy: It is a combination of Voyage and Time Policy.
It is a policy, which covers the risk during a particular voyage for a specified period. For
example, a ship may be insured for voyages between Madras to London for a period of
one year.
4. Valued Policy: This policy specifies the agreed value of the subject matter insured, which
is not necessarily the actual value. Such agreed value is referred to as the insured value. A
policy may be, say, for Rs. 10000 on Hull and Machinery etc.
Figure 14.2: Types of Marine Insurance Policies

Types of Marine Insurance Policies

Voyage Policy

Floating Policy
Time Policy

Wagering Policy (or) PPI Policy
Voyage and Time Policy (or) Mixed Policy

Construction (or) Builders Risk Policy
Valued Policy
Open Cover Policy

Unvalued Policy (or) Open Policy

Port Risk Policy

5. Unvalued Policy/Open Policy: In the case of an Unvalued Policy, the value of the subject
matter insured is not specified at the time of effecting insurance. It is taken for a specified
amount and the insurable value is ascertained in the case of loss. Here the insurer is liable

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