It is generally observed that most of the marine policies issued are defective. The areas where the mistakes are being committed are in attaching the clauses.
In the following paragraphs, an attempt has been made to understand and issue the policies correctly. The same may not be exhaustive and may require changes depending on the policy format item wise as reflected in the policy schedule.
(1) The first section of the policy deals with Agency/Cover note/policy no. and Name & Address of the Insured. These are self-explanatory and do not need any elaboration.
(2) VESSEL/CONVEYANCE: In this column, the name of the ship (if sea voyage is involved) or Truck Number or Name of Transport Company should be mentioned. In case the same is not available than the words “TO BE DECLARED” should be written. In case of open policy also the words “TO BE DECLARED” should be mentioned. Further, the mode of transit should also be specified, i.e.
i) If cargo is coming by sea and after discharge at the port is to be taken to interior destination and cover granted up to interior destination then the following should be used :
ii) If coming by Air & then by road/rail to the final destination :
iii) If only Inland transit is involved then by Road / Rail
iv) If FOB Cover is granted in conjunction with Inland transit for export cargo and loading of cargo is to be done at Midstream by Barge then the following should be mentioned :
(3) Voyage/Period of Insurance:
i) In case of open policy/sp. declaration policy the period of Insurance should be clearly stated.
ii) In all policies including open policy/sp. declaration the exact voyage should be described.
i) For open/sp. declaration policy: From Junagadh to Anywhere in India.
ii) Specific policy :
(a) where Inland transit is only involved. From Mumbai to Junagadh.
(b) Where Import Cargo is covered up to Interior destination (involving sea/road/rail transit).
From South Africa Port to Mumbai Port and thence to Junagadh.
(c) Where export cargo is covered :
From Veraval to London via Mumbai Port.
(d) Where F.O.B. cover is granted :
From Dhoraji to Bedi Port and thence to Steamer “Harshavardhan”
N.B. : If the name of the vessel is not available then the same need not be given.
4) B/L NO./Consignment Note No. & Date :
a) B/L No.: Bill of lading number available in case of sea transit.
b) A.W.B.: Airway Bill No. in case of Air Transit.
c) Consignment note number: This can be either Lorry receipt No. or Goods consignment note or Railway receipt.
If the above details are available in case of the specific policy then the same should be typed. If not available in the open policy. The words “TO BE DECLARED” should be written.
5) Subject matter insured: In this column, the details of the cargo insured should be given. This should include the quantity, type of cargo and how they are packed should be clearly shown.
1. 500 MT of cement packed in 10000 HDPE bags of 50 kg. Each.
2. One no. Skoda makes diesel generating set with spare packed in – Three wooden cases.
3. 100 bales of piece goods stuffed in a container no. “ABC 6703”
4. 5000 MT. of coal in bulk.
6) Sum insured :
a) In the case of all import cargo and inland transit, the sum insured should be given in Rupees only.
b) In the case of all export cargo, the sum insured should be mentioned in the currency proposed by the insured. Sum insured should not be shown in two currencies i.e. say Dollars and Indian rupees or Pounds and Indian rupees.
7) Basis of Valuation :
The Insured should specify in his proposal how he has arrived at the Sum Insured. Being an agreed value policy, this column has a lot of importance. The basis of arriving at the Sum Insured should show in the column. The various basis could be CIF + 10% OR CIF only OR Invoice value OR Market Value. Etc.
8) Premium (only in rupees) :
The rate of premium risk wise should be typed out in these columns including the amount of Service Tax applicable (In case of export policies – are exempted from payment of service tax.
9) Clauses :
This forms the most important part of the policy. The terms of coverage of the policy are based on the clauses which are attached. Broadly the three distinct modes of transit are being taken to show the clauses which would be applicable.
There are Sea Transit (either up to port or up to in interior destination), Air Transat (Both International and Indian and either up to Airport or interior destinations) and Inland transit (either by Rail/Road).
Depending on the coverages appropriate clauses are to be attached on the face of the policy, affixing the policy stamps as per the schedule and sealed.
By Mr. Nandkishor Vaishnav, Junagadh, Published in The Insurance Times, May 2005