Marine insurance – Voyage Policy
- As the name implies, a specific voyage insurance policy covers a specific single transit only. It offers coverage to goods, freights and other interests against various losses or damages, like fire, collision, earthquake, lightning, etc.; Specific voyage insurance policy will not pay anything if losses or damages happen due to war, terrorist activity, nuclear fusion, etc. Further, if goods are damaged during loading/unloading or while in storage, it won’t be covered under a specific voyage insurance policy, unless stated specifically.
- The specific voyage insurance cover comes to an end as soon as the cargo arrives at the destination. The policy would be issued before the inception of the voyage. At the time of taking a specific voyage insurance policy, it is essential to give the complete details of the risk along with complete information about the bill of lading, vessel name, etc.
- Specific voyage insurance policies suit to those businesses who do not often need marine insurance policies in the course of their business. In those businesses where the frequency of voyages is high, specific voyage policy may not be apt as it becomes challenging to get a separate marine insurance policy each time you decide to transfer your goods.
- A specific voyage policy covers transportation of goods through inland transport, import and export. It is feasible to extend the specific voyage insurance policy and gets extra cover against perils like a strike, riot, civil commotion, etc.
- While choosing the sum insured for specific voyage insurance policy, you can consider the type of the contract. The total quantity of your goods would be defined in your insurance contract. To calculate the sum insured, make sure to consider the contract value and add 10%-15% to it to find out the incidental cost.
Voyage insurance policy in simple terms
– Under this policy the subject matter is insured against the risk of a particular voyage. The risk commences from the departure of ship from its port of loading and terminates as the ship reaches its arrival port. This policy is for the cargo alone hence the policy is taken by the cargo owner.
– The policy covers the subject matter during voyage only.
– Therefore it may be constrained when the ship breaks down during voyage or deviates route resulting in elongation of time. In such cases suitable clauses might have to be provided to extend the coverage.
– This policy is suitable for the ships regularly operating in a particular route or voyage & for liner shipping. This policy is used mostly in case of cargo insurance. The Policy expires on completion of voyage.
– policy doesn’t cover the port stay, loading and discharging.
Voyage insurance policy – Real case
- A fashion company ‘X’ ventured into export recently. The company bagged a huge contract of exporting fashion apparels to a buyer situated in Dubai.
- Considering the risks that could arise during transit, the company decided to purchase a specific voyage insurance policy. As it was only one export, the company purchased specific voyage insurance policy only. The policy meant to cover only a single contract and would come to an end once the goods delivered to the buyer in Dubai.
- When the ship started its journey, it was a clear sky, however, after a few hours, it started raining heavily. Though goods were packed in a proper manner; it got damaged due to water. When the consignment reached the destination, the buyer refused to take the delivery of 20 boxes out of 90 boxes.
- As company ‘X’ had a specific voyage insurance policy, it approached the insurer for the claim settlement. Here, the insurer appointed a surveyor to inspect the situation and found that losses happened due to rain which was an insured peril.
- The insurer found the claim as legitimate and agreed to cover it. In this case, the insurance company only covered one voyage which was from India to Dubai. As the losses happened during that voyage, the insurer agreed to cover it. As soon as goods were delivered, the specific voyage insurance policy came to an end.